Seoul: The presidential office has determined that the recent Korea-U.S. tariff agreement does not necessitate ratification by the National Assembly, claiming that the memorandum of understanding (MOU) lacks legally binding force, thereby exempting it from constitutional requirements. This interpretation has been met with criticism.

According to Yonhap News Agency, Article 60 of the Constitution mandates that the National Assembly ratifies treaties that impose significant financial burdens on the state or its citizens. Labeling the agreement as an MOU to avoid this requirement is seen as mere wordplay. The agreement includes a plan for Korea to invest $350 billion in the United States over the next decade, comprising $200 billion in cash investments and $150 billion tied to a shipbuilding partnership, including the MASGA project. The cash portion is set to be disbursed gradually, with up to $20 billion per year, primarily funded by $15 billion in annual interest and dividend income from the Bank of Korea's foreign reserves, supplemented by overseas bond issuance by state-run banks.

Despite the limited short-term capital outflow risks, the scale of the investment is significant enough to affect fiscal and monetary policy, fitting the constitutional definition of a "significant financial burden." Previously, Prime Minister Kim Min-seok indicated that ratification would be necessary if a tariff deal were reached. The government's sudden position shift is attributed to concerns that seeking ratification could delay tariff reductions and negatively impact businesses, citing the Korea-U.S. Free Trade Agreement's extended ratification period due to political gridlock. However, advancing a massive overseas investment plan through a special law led by the ruling party, bypassing parliamentary approval, may provoke even greater political and economic backlash.

Under Article 13 of the Act on the Procedures for Conclusion of Trade Agreements, the government is required to submit financing plans and domestic industry safeguard measures when seeking ratification. While this process may be cumbersome, it is crucial for ensuring legitimacy and bipartisan support. Transparency remains a concern, as profit-sharing ratios, loss-allocation mechanisms, and project selection criteria have not been disclosed. U.S. President Donald Trump has publicly claimed that Korea could invest up to $950 billion, although the factsheet has not been made public.

For the sake of public trust, the entire agreement should be disclosed and submitted to the National Assembly for approval. The opposition party is urged to avoid exploiting ratification for political gain, instead focusing on a thorough scrutiny of the agreement to enable swift execution in the national interest.