Seeking a Breakthrough in Stalled Tariff Negotiations
Deputy Prime Minister Koo Expected to Advocate for Currency Swap to Facilitate US Investment Commitment
Koo Yoonchul, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance, will meet with Scott Besant, United States Secretary of the Treasury, in New York on the 24th (local time) to seek a breakthrough in the stalled Korea-US tariff negotiations.
Koo Yoonchul, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance Photo by Yonhap News
On the 23rd, a senior government official told reporters, "Deputy Prime Minister Koo and Secretary Besant will meet at an undisclosed location in New York the following day to discuss key issues."
During this meeting, both sides are expected to focus on the conclusion of a Korea-US unlimited currency swap and the establishment of a 350 billion dollar investment fund for the United States. The United States is demanding that Korea significantly increase the share of direct investment out of the 350 billion dollars that Korea has agreed to invest in the US, in exchange for reducing mutual tariffs and automobile tariffs to 15 percent. However, the Korean government believes that raising 350 billion dollars in cash in a short period would inevitably cause a major shock to the foreign exchange market. As a result, Deputy Prime Minister Koo is expected to explain the burden this would place on the Korean economy and persuade the US of the need to conclude a Korea-US currency swap to fulfill the investment commitment.
President Lee Jaemyung has also made it clear that under the current negotiation terms, a shock on the scale of a financial crisis is expected, and that Korea cannot fully accept the US conditions as they are.
In an interview with Reuters published on the 21st, prior to his departure for New York, he expressed concern, stating, "If Korea withdraws and invests 350 billion dollars in cash as the US demands, without a Korea-US currency swap, the country will face a situation similar to the 1997 foreign exchange crisis." While Korean government officials have previously raised the need for a Korea-US currency swap, this was the first time President Lee publicly addressed the issue. President Lee stated, "Reaching a detailed agreement that guarantees commercial rationality is currently the most important task and the greatest obstacle," adding, "I believe that, as allies, we can maintain at least a minimum level of rationality. We must end this unstable situation as soon as possible."
Meanwhile, Deputy Prime Minister Koo was originally scheduled to meet Secretary Besant on the day of the "Korea Investment Summit," a national investor relations event held during President Lee's visit. However, due to Secretary Besant's scheduling conflict, the meeting was moved up by one day. Accordingly, Deputy Prime Minister Koo also advanced his departure from Korea by one day, leaving for New York on the evening of the 23rd instead of the originally planned 24th.
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