The presidential office on the 13th said about the tariff negotiations centered on a "$350 billion U.S.-bound investment funds," "On our side, we presented a revised plan in September regarding a financial package, and there was some response from the U.S. side." It added that it is difficult to disclose specific proposals while negotiations between the two countries are underway. There was also talk that the U.S. side had presented a proposal "worth discussing" to our government. If a meeting between the Korean and U.S. finance chiefs takes place at the Group of 20 (G20) finance ministers' meeting and the International Monetary Fund (IMF) annual meeting scheduled for the 15th, the stalled negotiations could reach a turning point.
The presidential office sent a text notice to the press corps in the name of the spokespersons' group that day and stated this position regarding the "new alternative proposed by the U.S. side" mentioned at the National Assembly audit of the Ministry of Foreign Affairs. It also said, "We ask for your understanding that we cannot provide specifics at this stage."
Minister Cho Hyun of the Ministry of Foreign Affairs attended the parliamentary audit of the Ministry of Foreign Affairs at the National Assembly that day and, in response to questions about the status of the tariff negotiations, said, "The U.S. side has now come forward with a new alternative," adding, "(Our government) is in the stage of reviewing the contents." Cho said, "When the United States initially talked about $350 billion, it was a package that included not only direct investment but also loans and loan guarantees, but after that it suddenly changed to 'entirely direct investment,'" adding, "We hold the position that we cannot make $350 billion in direct investment, and such negotiations are continuing."
Earlier, unlike the existing negotiations, the U.S. side demanded a "$350 billion cash investment," to which our government counterproposed concluding an unlimited Korea-U.S. currency swap. If the U.S. demand were accepted, a sum equivalent to 84% of Korea's foreign exchange reserves would flow out, which could directly lead to a foreign exchange market crisis and economic shock. The minister said, "If we do it as direct investment as the United States demands, foreign exchange problems would arise, so there could be a serious impact on the economy."
The presidential office also convened a relay of meetings during the Chuseok holiday to address the issue. It was an emergency meeting attended by the three chiefs (chief of staff, policy chief, and national security adviser), Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol, and Minister of Trade, Industry and Energy Kim Jung-kwan. It is said that an "meaningful proposal" sent by the U.S. side was put on the table at the meeting. A senior official at the presidential office said, "There are things that are 'worth discussing.'"
The biggest point of disagreement between Korea and the United States regarding the investment funds is the ratio of direct equity investment. Initially, our government said most of the $350 billion would be loans and guarantees, with direct investment being a minority. However, the memorandum of understanding (MOU) sent by the U.S. side after the agreement in principle specified that most of it would be in the form of direct dollar investment.
Presidential Chief of Staff for Policy Kim Yong-beom said at a local briefing in New York last month, "In light of international investment practice, we expected that most (of the U.S.-bound investment funds) would be loans and guarantees, with some direct investment. We wrote this in our memorandum," adding, "But the MOU document the United States sent us was drastically different." He also said, "We could see that the 'cash flow' the United States argued for was, to a large extent, close to equity (direct equity investment)."