▲ Minister of Trade, Industry and Energy Kim Jeong-gwan, who visited the United States to wrap up negotiations on investments in the U.S., answers questions from reporters upon arriving through Terminal 2 of Incheon International Airport on the 13th. (Photo: Yonhap News)
Concerns are rising that negotiations between South Korean and U.S. trade authorities may be hitting a snag as the government's schedule to report on U.S. investment projects to the National Assembly has been abruptly postponed.
Minister of Trade, Industry and Energy Kim Jeong-gwan expressed his intent to make an announcement if negotiations were concluded this week, but contrary to plans, it appears difficult to quickly narrow differences with the United States.
According to the government and political circles on the 16th, the Ministry of Trade, Industry and Energy (MOTIE) requested a postponement of the National Assembly reporting schedule regarding U.S. investments, which had been scheduled for the 17th.
This upended expectations that the ministry would report the first U.S. investment project and its details to the National Assembly on this day, finally sign a memorandum of understanding (MOU) as early as the 18th, and officially announce it.
Minister Kim also stated upon returning home after making final negotiations with U.S. Commerce Secretary Howard Lutnick and others in the U.S. from the 10th to the 12th, saying, "I am thinking of making an attempt within this week," and "If [negotiations] are finalized, let's even make an announcement."
However, as an agreement has not been reached by this day, the signing and announcement of the MOU have also been delayed.
While the two countries are known to have agreed to push ahead with the construction of the Encinal combined-cycle gas turbine power plant in Texas and large-scale nuclear power plant construction projects after long negotiations over selecting U.S. investment projects, contentious issues still remain.
In particular, intense investment pressure and additional demands from the U.S. appear to be acting as a burden on the South Korean government.
The United States hopes South Korea will participate in the Alaska liquefied natural gas (LNG) development project, a key initiative pushed by President Donald Trump.
As this project has been evaluated as difficult to guarantee commercial rationality due to opaque profit securing, speculation suggests that rather than immediately finalizing investments, the two sides may include a level of wording in the MOU stating that they will "review it as an investment target."
In addition, the U.S. is reportedly proposed investments in a pyroprocessing project to handle spent nuclear fuel during the negotiation process.
The Ministry of Trade, Industry and Energy asserts that the scale of investment in strategic industrial sectors in the U.S. will not exceed the 200 billion dollars agreed upon by the two countries, but concerns are also raised that it could exceed the limit if additional U.S. demands continue.
Tug-of-war over equity investment in nuclear vendor Westinghouse is also continuing.
Previously, a plan for South Korea to secure 15 percent or more of Westinghouse shares was discussed, but the U.S. side is reportedly offering a lower level of 5 to 10 percent now.
In addition, as it is known that differences of opinion surfaced with the U.S. over profit-sharing structures through an umbrella investment special purpose vehicle (SPV), observations are mounting that "safety devices" meant to reduce South Korea's investment risks are being shaken.
With reports pouring in about excessive demands from the U.S. side, the room for maneuver for our trade authorities has narrowed further.
The Ministry of Trade, Industry and Energy maintains its stance that specific details regarding U.S. investments have not been finalized as of this day.
An official from the Ministry of Trade, Industry and Energy said, "We are in close consultations with the United States, and it is taking time to find common ground," adding, "We will do our utmost in negotiations until the end from the perspective of national interest."
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