The ruling and opposition parties clashed in the National Assembly over next year's budget allocation for follow-up measures after the South Korea-U.S. tariff negotiations. Political wrangling over the 728 trillion won budget proposal for next year has begun in earnest.
The Strategy and Finance Committee of the National Assembly held a full session on the morning of the 17th and approved allocating 700 billion won for The Export-Import Bank of Korea's trade response program. During the process, ruling and opposition members of the committee were in a deadlock.
The People Power Party argued for holding off on the allocation. Park Sung-hoon of the People Power Party said, "To put in taxpayers' hard-earned money, a clear structure must come first, but it's 700 billion won for the Export-Import Bank, and if you add the Korea Development Bank and the Korea Trade Insurance Corporation (K-sure), it's 1.9 trillion won," noting, "There is no explanation at all as to through what form this money will be provided, how the support will be carried out, and who the beneficiaries are."
Park said, "The structure the government and ruling party initially had in mind seemed to be a format in which the Export-Import Bank would inject capital and provide support and guarantees through a leverage multiple, but after switching to a special law, there is no clear explanation of the structure," arguing it should be put on hold.
By contrast, Democratic Party of Korea lawmakers countered that there had been an oral agreement between the two parties in the Strategy and Finance Committee's Budget and Settlement Fund Review Subcommittee, so there was no issue. Jung Il-young of the Democratic Party of Korea, the subcommittee Chairperson, said, "(In the subcommittee) we approved it this morning following normal procedures," and countered, "As the tariff negotiations have wrapped up, we need to provide guarantees related to the $150 billion investment, and the government side also judged that it is necessary to include a 1.9 trillion won budget—700 billion won for the Export-Import Bank, 600 billion won for the Korea Development Bank, and 600 billion won for the trade insurer."
As the parties failed to unify their positions, the full session was briefly suspended. In the end, after discussions between the parties' secretaries, they decided to allocate the 700 billion won budget as in the government's original plan. Instead, because the law and the fund have not yet been established, they agreed to allocate 700 billion won as a reserve for contingencies and to conduct a comprehensive review together with the related bill later in the Special Committee on Budget & Accounts.
In the Budget Adjustment Subcommittee of the Special Committee on Budget & Accounts, which also began that day, the ruling and opposition parties clashed over several issues. As differences emerged over key projects such as the 150 trillion won National Growth Fund, one of Lee Jae-myung's state tasks, they decided to defer them in succession.
The Financial Services Commission (FSC) has allocated 1 trillion won in next year's budget proposal to create the National Growth Fund. On this, Kim Dae-sik of the People Power Party said, "A government-orchestrated fund premised on an increase in national debt is very dangerous," adding, "Because all key information on the National Growth Fund is absent, next year's budget should be cut entirely."
By contrast, Noh Jong-myeon of the Democratic Party said, "To do it according to the government's goal, next year's budget should instead be increased by 500 billion won." In the end, Han Byung-do of the Democratic Party, the subcommittee Chairperson, decided on "deferral."
Projects such as the national agriculture AX platform, which integrates private artificial intelligence (AI) technology into the agricultural sector, and the Ministry of Agriculture, Food and Rural Affairs' program to swiftly commercialize AI application products were also deferred as the ruling and opposition parties split on them.