Korea proposed to the US "Make American Shipbuilding Great Again"

South Korean media: The South Korean government suggested the "MASGA" project to the US, and the US requested technology transfer and human resources support

The South Korean government proposed its trump card "MASGA (Make American Shipbuilding Great Again)" project during the South Korea-US tariff negotiations. The project aims to "make the American shipbuilding industry great again," and it is a large-scale shipbuilding cooperation plan worth tens of trillions of won.

According to the South Korean presidential office and relevant government departments on the 28th, South Korea's Minister of Trade, Industry and Energy, Kim Jeong-wan, proposed the suggestion during the tariff negotiation held at the residence of US Commerce Secretary Howard Lutnick in New York on the 25th (local time). The name "MASGA" was inspired by the US President Trump's iconic slogan "MAGA (Make America Great Again)."

The "MASGA" project covers investment by South Korean private shipbuilding companies in the US and financial support such as loans and guarantees. It is reported that the South Korean government has already proposed specific suggestions to the US, with an amount reaching hundreds of billions of dollars, equivalent to tens of trillions of won. After listening to Kim Jeong-wan's introduction about the MASGA project, US Commerce Secretary Howard Lutnick expressed satisfaction.

To provide necessary financial support for South Korean shipbuilding companies entering the US market, the South Korean government is considering involving public financial institutions such as the Korea Eximbank and the Korea Trade Insurance Corporation. A senior official from an export financial institution said, "Once the project details are finalized, we will actively support shipbuilding companies investing in the US."

American side not only required South Korean shipbuilding companies to invest in the US, but also put forward requirements for technology transfer and talent training. According to reports, the South Korean government is preparing talent projects including local seminars, certification courses, and vocational training together with domestic South Korean shipbuilding companies.

Rebuilding the shipbuilding industry is one of the main goals of the Trump administration. Since the 1980s, due to reduced subsidies and excessive industrial protection policies, the US shipbuilding industry has lost its competitiveness, and its market share in the global market has dropped to less than 1%. It is urgently needed to fully restore the entire industrial ecosystem, including equipment, infrastructure, components, and human resources.

Especially compared to the advanced warships such as nuclear-powered aircraft carriers and Aegis destroyers that barely maintain operations, the United States has actually lost the ability to build civilian merchant ships. Last year, a total of 1,910 ships were ordered globally, of which only 2 orders were received by US shipyards. Therefore, restoring the ability to build merchant ships has become an important issue for the US. Professor Lee Shin-hyung (音) from the Department of Naval Architecture and Ocean Engineering at Seoul National University said, "The US naval shipbuilding relies on government budgets, but the civilian shipbuilding sector has lost production capabilities due to high production costs and other issues. South Korean shipbuilding companies have advantages in cost optimization, so from the US perspective, South Korea is the best partner for the revival of the shipbuilding industry."

Shipbuilding cooperation as a bargaining chip may alleviate the pressure of investments to the US. Japan, which reached a tariff agreement with the US, promised to invest 55 billion USD in the US, while the EU (EU) pledged to invest 60 billion USD. The US currently requires South Korea to establish a 40 billion USD investment fund for the US. Professor Park Sung-hoon, emeritus professor at the Graduate School of International Studies at Korea University, said, "Considering the economic scale, it is difficult to meet the US' request for a 40 billion USD investment amount. The US hopes to restore shipbuilding capabilities, and if this is used as a bargaining chip, it may help reduce the investment amount and other effects."

However, some people believe that shipbuilding as a bargaining chip is still insufficient. A trade official said, "Reviving the shipbuilding industry is indeed a topic of concern for the US, and it may become a discussion topic, but in practical terms, shipbuilding cooperation will mainly benefit South Korean shipbuilding companies," "so the investment scale on our side is likely to be quite significant."

The expansion of US energy imports has also become an important bargaining chip. The EU offered to purchase 25 billion USD worth of US energy annually over three years, totaling 75 billion USD (about 1,038 trillion won), and reduced tariffs to 15%. South Korea imported 46.33 million tons of liquefied natural gas (LNG) last year, of which about 5.64 million tons came from the US, accounting for 12% of the total import volume. The US was the world's largest LNG exporter last year, while South Korea's import ratio is relatively low.

Chang Sang-jik (音), director of the Institute of International Trade and Commerce at the Korea Trade Association, said, "Considering the economic scale of the EU, we originally expected a larger investment plan to reach an agreement, but this time it seems that an agreement comparable to Japan was reached with the condition of purchasing a large amount of US energy. South Korea can also try to minimize the investment plan by strengthening cooperation in the shipbuilding and energy sectors."

Regarding sensitive issues such as opening up the agricultural and livestock product market and increasing defense spending, the South Korean government is coordinating the extent of concessions to the US. In response to a question about whether the tariff negotiations would lead to the possibility of opening the US agricultural and livestock product market, causing farmer opposition, Chief of Staff Yu Sang-ho of the Presidential Office said, "The pressure from the US side is indeed very strong, and it is true that they specifically requested the opening of agricultural products." However, he said, "The government is trying to minimize the concession scope to protect the domestic industry." The US government is increasing the pressure to expand the import of US rice and beef over 30 months old.

When asked whether "increasing the defense budget" and "purchasing US weapons" were also discussed simultaneously to achieve the tariff negotiations, Chief Secretary Yu said, "As far as I know, these issues are also on the negotiation list." The South Korean government has been pushing for comprehensive negotiations with the US on tariffs, non-tariff barriers, and security areas under the "Security and Trade Package."

Source: JoongAng Daily

Original: https://www.toutiao.com/article/1838960503972041/

Statement: This article represents the views of the author himself.