Seoul: A memorandum of understanding (MOU) concerning South Korea's planned $350 billion investment in the United States is nearing completion and will not require ratification by South Korea's National Assembly, stated Industry Minister Kim Jung-kwan on Tuesday. The minister clarified that the nonbinding nature of the MOU exempts it from the legislative process typically necessary for free trade agreements.
According to Yonhap News Agency, during a parliamentary industry committee meeting, Minister Kim confirmed that there is no intention to seek parliamentary ratification for the MOU. He emphasized that other economies with similar trade agreements with the U.S., such as Japan and the European Union, have not undergone parliamentary ratification processes for their deals. Kim warned that making the agreement legally binding could introduce complications, particularly amid ongoing uncertainties like the U.S. Supreme Court's review of the tariff scheme employed by the U.S. administration.
The South Korean government is working towards proposing a special bill to solidify its investment commitment to the U.S. following a finalized tariff agreement reached during a recent summit between President Lee Jae Myung and U.S. President Donald Trump. This meeting occurred on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju.
An agreement on Seoul's $350 billion investment pledge was finalized on October 29. The pledge involves $200 billion in cash installments, capped annually at $20 billion, alongside $150 billion designated for bilateral shipbuilding cooperation. The minister also noted that the MOU and a joint fact sheet on the deal are nearly finalized, although adjustments are being made regarding security-related details.
Furthermore, the minister confirmed that U.S. tariff reductions on Korean vehicles will be applied retroactively. These reductions will take effect from the month in which the South Korean government submits a special bill to the Assembly to establish a Korea-U.S. investment fund.