Reuters Interview
"A Minimum Level of Rationality Will Be Maintained Between Blood Allies"
Trade Agreement Needed to "End This Unstable Situation Quickly"
President Lee Jaemyung has warned that the $350 billion investment fund in the United States, as demanded by the U.S., could trigger a severe financial crisis for the South Korean economy.
In an interview with Reuters conducted at the presidential office on the 19th and released on the 21st (local time), President Lee stated, "If we withdraw $350 billion in cash and invest it according to the method demanded by the United States, without a Korea-U.S. currency swap, South Korea will face a situation similar to the 1997 foreign exchange crisis."
The United States is currently demanding that South Korea accept a trade agreement similar to the one reached with Japan. In the case of Japan, it accepted terms for a $550 billion investment fund in the U.S., under which the authority to select investment targets was transferred to the U.S., and profits were split 90% to the U.S. and 10% to Japan. Although South Korea and the U.S. reached a trade agreement in July, the two countries have yet to finalize negotiations due to differences over how to implement the $350 billion investment fund.
President Lee emphasized the differences between South Korea and Japan, noting that Japan holds more than twice South Korea's foreign exchange reserves of $410 billion, and has established currency swap lines between the yen, an international currency, and the U.S. dollar.
He further stated, "Reaching a detailed agreement that guarantees commercial rationality is currently the most important task and the biggest obstacle," adding, "The proposals presented during working-level negotiations do not ensure commercial viability, making it difficult to narrow the gap." He also stressed, "I believe that at least a minimum level of rationality will be maintained between allied nations with a blood alliance," and emphasized the need to "end this unstable situation as soon as possible."
Regarding the recent incident in which U.S. immigration authorities raided Hyundai Motor and LG Energy Solution factories in Georgia and detained hundreds of Korean employees, President Lee warned that companies may become more cautious about investing in the United States. However, he said, "I do not believe this incident was intentional," noting that "the United States has apologized for the matter, agreed to seek reasonable measures, and is currently working on them," thereby dismissing concerns about negative impacts on Korea-U.S. relations.
This interview was released just before President Lee departs for New York on the 22nd to attend the United Nations (UN) General Assembly for the first time since taking office. He is scheduled to deliver a keynote speech on the 23rd and will become the first South Korean leader to preside over an open debate at the UN Security Council.
President Lee stated that his itinerary for this trip to the United States does not include a meeting with U.S. President Donald Trump or discussions related to a trade agreement. However, he noted that he held his first summit with President Trump at the White House last month, and while there was no joint statement or specific announcement, the two leaders formed a strong personal bond.
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