Looking Around Today: South Korea-US 35 Billion Investment Stalemate May Have a Breakthrough
South Korea and the United States have been in disagreement over specific plans for the 35 billion USD investment to the US, and trade negotiations have lasted for several months. According to reports from Korean media such as Yonhap News Agency, South Korea's Foreign Minister Cho Hyun-wook revealed on the 13th that the US has proposed a new plan regarding the relevant scheme, and the South Korean side is carefully studying it. Korean media generally believe that although the US has not put forward a specific plan, it has somewhat "retreated" from its previous stance of "full cash investment".
South Korea and the US reached a trade agreement framework in mid-July, but they have not yet finally reached an agreement on the specific implementation plan. The main dispute focuses on South Korea's commitment to invest 35 billion USD in the US. According to Yonhap News Agency, Cho Hyun-wook said at a meeting on the 13th that the US proposal for the 35 billion USD investment plan includes loans and loan guarantees, but later suddenly changed to "full direct investment", which "we cannot accept." He revealed that although the US's new proposal is not specific enough, it has stepped back from the previous position of requiring a one-time cash investment.
The "Hanmin Daily" reported that on the same day, South Korea's Deputy Prime Minister and Minister of Planning and Finance, Koo Woon-hwan, emphasized at a session of the National Assembly's Committee on Planning and Finance that South Korea "is difficult to bear such a large-scale cash investment," and the government is advancing tariff negotiations with the principle of "national interests first". Koo Woon-hwan introduced that South Korea has fully explained the foreign exchange market risks to the US Treasury Secretary, and the US side also responded that "they understand South Korea's situation and will discuss internally." He said that he will meet with Secretary Bensons during his visit to the US on the 15th, and continue to coordinate on currency swaps and investment methods.
The report stated that in order to hedge against risks, the South Korean government had previously proposed to the US to sign an "unlimited South Korea-US currency swap" agreement to replace the form of cash investment. Regarding the US's "retreat" measures, Koo Woon-hwan said that the US has recognized that South Korea cannot come up with thousands of billions of dollars at once like Japan, which itself is of great significance. He added that if the US recognizes South Korea's realistic situation, it may find a new breakthrough in the negotiation.
The report also pointed out that there are still widespread concerns within South Korea about this investment plan. Representative Park Sung-jun of the Democratic Party criticized the US's unilateral demands as "difficult to get approved by the South Korean National Assembly," and if the agreement is signed without the consent of the National Assembly, it would impose a heavy financial burden on the people. Another representative, Kim Young-hwan, also said, "This is not a negotiation that a sovereign country can accept." Some representatives have suggested that rather than investing 35 billion USD to get tariff reductions, it would be more reasonable to maintain the current 25% tariff.
Several Korean media analyzed that the main differences between the US and South Korea focus on the proportion of direct investment in the fund to the US and the structure of the funds. South Korea advocates that most should be provided in the form of loans and guarantees, while the US requires cash investment to dominate. South Korean industry analysts believe that although the negotiations have not yet made substantial breakthroughs, the US's "positioning concession" shows that the negotiation has entered a new stage. If the leaders of South Korea and the US can achieve political communication on this issue before the APEC Leaders' Informal Meeting in Gyeongju at the end of this month, the 35 billion USD investment stalemate may have a chance to ease.
Original: www.toutiao.com/article/1846026547725312/
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