OVERNIGHT MONEY: South Korean Trade

Valerie Jarrett, a senior adviser at the White House, said Wednesday that passing the Korea free-trade agreement the Obama administration renegotiated in December would be the administration’s first legislative priority in this Congress. The renegotiation won the approval of the Michigan delegation and the U.S. auto industry, but irritated Sen. Max Baucus (D-Mont.), the Finance Committee chairman, who was pressing for full access to all cuts of U.S. beef into the Korean market. 

The administration wants to use trade to build bridges both to the G.O.P. and to the business community, both of which have been pushing for congressional passage of the stalled free trade agreements with South Korea, Panama and Colombia since they were first finalized by the Bush administration in 2007. President Bush had attempted to submit the Colombia agreement to Congress in 2008, but the House speaker at the time, Rep. Nancy Pelosi (D-Calif.), engineered a change of the House rules to keep it from coming to a vote automatically under fast-track procedures. 

The trade agenda has been considered largely “stalled” by the business community ever since.

What to Also Watch for:

The Build-up for Hu: Building on a Wednesday address by Treasury Secretary Timothy Geithner, Gary Locke, the Commerce secretary, will deliver a speech on the U.S. commercial relationship with China, at an event held by the U.S.-China Business Council on Thursday. Locke can be expected to echo Geithner’s cautious approach to the China trading relationship as the Obama administration builds up to President Hu Jintao’s Jan. 19 state visit, although he might touch on problems such as rampant piracy in China of U.S. goods.

Dodd-Frank, Cont’d: The Commodity Futures Trading Commission will be holding (yet) another meeting Thursday to discuss proposing rules implementing the Dodd-Frank financial reform law. But this time, the get-together comes on the heels of some public pressure from lawmakers who want to see strict rules put in place preventing excessive speculation in the oil and commodities markets. Dodd-Frank authorizes the CFTC to implement “position limits” that would aim to prevent excessive speculation, which some economists argue have been the culprit of extreme price swings in some consumer products.

On Wednesday, eight senators — seven Democrats, one independent — told the CFTC to reject industry lobbyists seeking looser regulations and instead to quickly act to put in place strong rules to “to rein in Wall Street excesses and prevent another speculative bubble that threatens to drive up gas and food prices even further for working Americans.”

It remains to be seen how the CFTC might address those lawmakers’ concerns.

Busy Day: Kirk and Locke are also set to make an appearance at the U.S. Chamber of Commerce, as the Export-Import Bank announces a new initiative that aims to boost the number of small businesses exporting goods made by American workers. 

Obstacle to Capital: Ben Bernanke, the chairman of the Federal Reserve; Sen. Mark Warner (D-Va.); and Sheila Bair, the head of the FDIC, are among those expected to discuss making loans more accessible to small businesses at an FDIC forum. 

Economic Indicators:

— The Commerce Department is set to drop November data on international trade in goods and services.

— The Labor Department has a pair of releases scheduled: a weekly report on first-time unemployment claims and producer price index statistics for December.

— And Freddie Mac is expected to release weekly mortgage rate figures.

Breaking Wednesday:

“Human Rights Violators”: That’s what the United Automobile Workers union will label foreign carmakers that continue to not allow their American workers to organize, The New York Times reports. 

Slowly, but Surely?: The Chinese yuan likely won’t be fully convertible in international markets any time soon. But The Wall Street Journal says the decision by the state-controlled Bank of China to allow American trading in the yuan is definitely a step in that direction. 

Speaking of China: Geithner said Wednesday that China’s rise and its economic policies were a concern, but that Americans essentially control their own economic destiny. 

“We need to understand that our strength as a nation will depend not on choices made by China’s leaders, but on the choices we make here at home,” said the Treasury secretary, who also broached the need for tax reform and tighter government spending. 

Buzzer-Beater: Gov. Pat Quinn of Illinois, a Democrat, on Wednesday defended tax raises on both individuals and businesses that the state’s legislature approved early Wednesday morning, the Chicago Tribune reports. “Our fiscal house was burning,” Quinn said, when asked about the changes passed shortly before a new crop of state lawmakers were to be sworn in. 

What You Might Have Missed:

On the Money’s Wednesday:

• Americans are not convinced about raising the debt ceiling. 
• The S.E.C. dings a government website manager for excessive perks.  
• The Fed reports the economy continues to improve gradually; the Treasury Department reports $80 billion more in debt. 
• Valerie Jarrett says be patient on tax reform. 
• A taxpayer watchdog gives Capitol Hill some suggested spending cuts. 
• And a full recovery for the housing market? Think two years. 

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