NewKerala.com

APEC Summit Countdown: Will US-South Korea Seal $350 Billion Trade Deal?

The APEC Summit in Gyeongju is just days away, putting pressure on South Korea and the US to finalize their major trade agreement. Both countries are engaged in last-minute negotiations to resolve differences over the $350 billion investment package. The main sticking points involve whether South Korea will make the investment upfront in cash or through project financing over time. High-level officials from both nations have been shuttling between capitals trying to reach a compromise before the leaders meet.

Key Points: US South Korea Trade Deal Hangs in Balance at APEC Summit

  • South Korea proposes $350 billion investment over 10 years to ease FX burden
  • US seeks upfront cash payment while Seoul wants project financing
  • Tariff reduction from 25% to 15% on Korean cars part of framework
  • Both countries sending high-level delegations for final pre-summit negotiations
3 min read

APEC Summit 2025 draws keen attention with S. Korea-US trade deal at stake

With APEC Summit days away, South Korea and US race to finalize $350 billion trade agreement amid tariff and investment timing disputes.

"quite to the tail end of their trade negotiations - Kim Yong-beom, Presidential Policy Chief"

Seoul, Oct 24

With only seven days remaining until the Asia-Pacific Economic Cooperation (APEC) summit, eyes are on whether South Korea and the United States could strike an official tariff deal at the two-day event, as the countries are making last-minute efforts to resolve differences over Seoul's $350 billion investment commitment to Washington.

The 2025 APEC summit is scheduled to take place in the southeastern city of Gyeongju from next Friday, with a summit between South Korean President Lee Jae Myung and U.S. President Donald Trump also expected.

The main focus is on whether the two sides can finalize their trade agreement before the summit, a deal that would have a significant impact on the Korean economy, which is heavily dependent on exports.

On Wednesday, the presidential chief of staff for policy, Kim Yong-beom, and Industry Minister Kim Jung-kwan traveled to Washington to hold follow-up tariff negotiations with U.S. Commerce Secretary Howard Lutnick, less than a week after returning home from the U.S. capital.

The two returned home early Friday. Their latest U.S. trip will likely mark the last face-to-face, high-level trade talks between the two countries before the upcoming APEC summit.

The two countries have been working to iron out differences over the details of the proposed $350 billion investment package, such as financing methods and profit allocation.

On July 30, Seoul and Washington reached a framework agreement under which the U.S. agreed to lower reciprocal tariff for South Korea to 15 percent from 25 percent in return for Korea's $350 billion investment in the U.S., along with increased cooperation in the shipbuilding, semiconductor, battery and other advanced industries. The U.S. also agreed to cut the 25 percent tariff on Korean cars to 15 percent.

Trump earlier said the investment would be made "upfront," while Seoul officials have argued the investment pledge was intended to finance projects rather than a cash payment and called for financial safeguards, such as a currency swap arrangement.

Following monthslong follow-up talks, the presidential policy chief said earlier this week that the two countries have come "quite" to the tail end of their trade negotiations, noting "substantive" progress on most of the issues.

The biggest sticking point remaining in ongoing trade negotiations appears to be the scale of direct investment by South Korea, along with the timing of the investment.

Seoul officials recently said the U.S. administration has shown signs of softening its stance on its demand that Seoul should make its entire $350 billion investment commitment upfront in cash.

The Korean government is said to have proposed making installments for the $350 billion investment over 10 years to reduce the burden on its foreign exchange (FX) reserve, as the country can use up to $20 billion from the FX reserve in a single year.

- IANS

Share this article:

Reader Comments

R
Rohit P
The 10-year installment plan makes sense. No country should put all their forex reserves at risk in one go. Smart negotiation by South Korea to protect their economic stability.
A
Arjun K
While this deal is important for Korea-US relations, I hope India is also focusing on strengthening our own trade partnerships. We have so much potential in manufacturing and technology sectors that needs better global market access.
S
Sarah B
The semiconductor and battery cooperation mentioned here is crucial. India is also trying to build these industries - we should study how such international partnerships work and apply similar models for our Make in India initiative.
V
Vikram M
Honestly, the US demanding upfront cash payment seems unreasonable. Good that Korea stood their ground. In international trade, both parties should benefit fairly, not one-sided demands.
M
Michael C
APEC summits are becoming increasingly important in today's global economy. India should consider more active participation in such forums to boost our export opportunities. Our IT and pharma sectors have so much to offer! 💼

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50