Kim Yongbeom: "'Commercial Reasonableness' Stipulated in Article 1 of Korea-U.S. Tariff MOU... No Uncertain Investments"

"Fact Sheet Expected to Be Released Within This Week"

Kim Yongbeom, Chief of Policy at the Presidential Office, announced on November 6 that, as part of the Korea-U.S. tariff negotiations, a "commercial reasonableness" clause was included in Article 1 of the Korea-U.S. Memorandum of Understanding (MOU) to ensure that even if Korea invests up to 20 billion dollars annually in the United States, there would be no loss of principal and interest.

Kim Yongbeom, Chief of Staff to the President, is responding to questions from committee members during the National Assembly Steering Committee's audit of the Presidential Secretariat, National Security Office, and Presidential Security Service held on the 6th at the National Assembly in Yeouido, Seoul. Photo by Yonhap News Agency

During the National Assembly Steering Committee's audit of the Presidential Office on this day, Kim Yongbeom responded to concerns raised by Democratic Party lawmaker Kim Namgeun regarding the "recovery of principal and interest from investments in the U.S." by stating, "It is a definition clause indicating that the investment committee will only approve investments where there is an anticipated cash flow for recovering the investment."

He further explained, "We included this clause to ensure that projects with uncertainty in recovering principal and interest would not be initiated in the first place, and that our consultative committee would not approve such projects."

Addressing concerns that Korea's annual investment of up to 20 billion dollars in the U.S. could negatively affect the foreign exchange market, Kim Yongbeom countered, "If we include the central bank's reserves and the Foreign Exchange Equalization Fund, we can easily raise about 15 to 20 billion dollars without difficulty."

He added, "This figure was determined through close analysis with the central bank to ensure it would not shock the foreign exchange market."

He also stated, "Although we were unable to change the 50-50 profit-sharing ratio due to Japan, we included a provision allowing for adjustment of the ratio if it is determined that the recovery of principal and interest becomes uncertain during the process. We have made every effort to secure multiple safety mechanisms."

Kang Hoonshik, Chief of Staff to the President, commented on the timing of the release of the joint fact sheet containing the final agreement on the Korea-U.S. tariff negotiations, saying, "The negotiations are ongoing and are in the final stages."

Kang Hoonshik explained, "The fact sheet will include not only tariffs but also security-related matters, and the MOU will be signed after these are included. The MOU itself must also go through the negotiation process."

Regarding the timing of the signing of the MOU and other agreements, he said, "Various departments within the U.S. government are still discussing, so it is difficult to predict unilaterally when it will be finalized. However, as for the fact sheet, we do not expect it to go beyond this week."