As trade talks between the Korean and U.S. governments have concluded, expectations for the MASGA (Make America Shipbuilding Great Again) project are rising further. Korea and the United States have confirmed major direction, including the creation of a $150 billion (about 213 trillion won) fund. However, regulations need to be lifted to build commercial ships and U.S. military vessels. The industry expects the MASGA project to become more concrete after the Korea-U.S. Security Consultative Meeting (SCM) next month.
According to the military and the defense industry on the 30th, the MASGA fund agreed upon by the Korean and U.S. governments is expected to be used to train shipbuilding personnel in the United States and rebuild the equipment supply chain. This applies to both commercial ships and warships, with Korean shipbuilders improving the U.S. shipbuilding infrastructure (base facilities). Because there are restrictions on foreign shipbuilders for warships, construction is expected to start with commercial vessels.
There are calls that, for the MASGA project to operate smoothly, regulations restricting overseas shipbuilders from building in the United States must be lifted. The United States has the Jones Act and the Byrnes-Tollefson Act, which allow only domestic corporations to build commercial ships and warships. An industry official said, "There are ship equipment items that cannot be procured within the United States, and it takes a very long time to establish a supply chain," and added, "We need provisions to resolve or bypass the regulations."
The industry's initial concept for launching the MASGA project was to secure maintenance, repair and overhaul (MRO) volumes for U.S. naval vessels. MRO volumes are necessary to enable stable dock (dock, shipyard) operations and overseas investment. After that, the companies' plan was to work with U.S. shipbuilders to build non-combat ships together and create conditions to build the latest combat ships.
To circumvent various U.S. regulations, Korea proposed producing block modules (parts of a ship) in Korea and shipping them to the United States for assembly, as well as sending equipment that cannot be procured in the United States from Korea.
The Defense Acquisition Program Administration held a working-level meeting with the U.S. Department of the Navy on the 16th of last month (local time) to discuss easing regulations related to MASGA and mentioned these points, and it was also reported to have raised the need to conclude a Reciprocal Defense Procurement Agreement (RDP-A) between the two countries. If this agreement is concluded, Korean-built vessels will be recognized as "allied nation products," allowing domestic corporations to participate in U.S. government procurement programs. The U.S. side was said to have responded, "We will consider it positively."
With the direction set by the Korea-U.S. summit the previous day, detailed matters such as ways to ease regulations are expected to be discussed at the meeting between the defense ministers of the two countries. Ahn Gyu-baek, Minister of National Defense, and Pete Hegseth, U.S. Department of War (Department of Defense) Minister, will chair the SCM to be held in Seoul on the 4th of next month. The Ministry of National Defense has selected defense cooperation items such as shipbuilding and MRO, in addition to the transfer of wartime operational control and defense cost-sharing.
An official at the Defense Acquisition Program Administration said, "Several more working-level meetings are scheduled to discuss the details of the MASGA project," and added, "We are coordinating the schedule with the United States."