SEOUL: South Korea’s parliament passed a special Bill on Thursday (Mar 12) to pave the way for Seoul’s US$350 billion investment commitments in strategic US industries under a trade deal struck last year.
The law implements a trade agreement signed in November under which South Korea agreed to invest US$200 billion in US strategic industries and US$150 billion in shipbuilding-related cooperation in return for more favourable tariff terms.
The National Assembly passed it with bipartisan support in a plenary session on Thursday.
Due to come into force after about three months, the legislation will serve as a basis to create a state-backed investment corporation with 2 trillion won (US$1.4 billion) in capital and a strategic investment fund.
The Bill names shipbuilding, semiconductors, pharmaceuticals, critical minerals, energy, artificial intelligence and quantum computing as priority investment sectors, while additional sectors can be added by presidential decree.
A central provision requires US investments to meet the principle of “commercial feasibility”, meaning they must generate sufficient cash flow to cover principal and interest over their lifespan.
Exceptions are permitted when national security or supply chain stability are at stake, provided relevant South Korean parliamentary committees approve them.
South Korea’s Industry Minister will lead a joint US-South Korea committee to assess proposed projects, while a Finance Minister-led committee will decide whether to advance them to a US panel headed by the Secretary of Commerce, which can also propose projects.
https://www.channelnewsasia.com/east-asia/south-korea-us-bill-350-billion-investment-trade-deal-5988141
