By Ju-min Park and Kanishka Singh
SEOUL/WASHINGTON (Reuters) -The U.S. and South Korea released details of a trade agreement on Friday that includes a $150 billion Korean investment in the American shipbuilding sector and an additional $200 billion earmarked for industrial sectors, the two countries said.
The joint announcement followed a meeting in October between South Korean President Lee Jae Myung and U.S. President Donald Trump, where they agreed to a deal that would cut American import duties on South Korea’s products to 15% from 25%.
“Finally, the South Korea-U.S. trade, commerce, and security negotiations, which were among the biggest variables affecting our economy and security, are … concluded,” Lee said on Friday.
“Good competition requires excellent partners, and I believe President Trump’s rational decision played a significant role in achieving meaningful agreement.”
Under the agreement, Lee said South Korea will build nuclear-powered submarines and form a new partnership with the U.S. on shipbuilding, artificial intelligence and the nuclear industry.
A fact sheet released by the White House said that the U.S. gave approval for South Korea to build nuclear-powered submarines.
Washington will work closely with Seoul to find avenues to source fuel, it said.
The White House said South Korea will invest $350 billion in the U.S., including $150 billion in the shipbuilding sector.
SOUTH KOREA FX STABILITY
Earlier, South Korea said the package of $350 billion included $200 billion in cash that would come in installments no larger than $20 billion a year in an effort to keep the won stable.
The fact sheet said the two countries have “a mutual understanding” that South Korea’s investment should not “give rise to market instability” in Asia’s fourth-largest economy.
If signs of instability appeared, South Korea could seek an “adjustment in the amount and timing of the funding, and the United States will, in good faith, give due consideration to such request,” the fact sheet said.
On Friday, Lee said project investments would be limited to those that were commercially viable.
In a televised briefing on Friday, Lee’s national security adviser said the two countries had discussed the issue of nuclear submarines on the “premise” that the vessels would be built in South Korea.
Trump previously said the submarines would be built in a Korean-owned shipyard in Philadelphia.
Washington “supports the process that will lead to (South Korea’s) civil uranium enrichment and spent fuel reprocessing for peaceful uses,” the joint statement said.
A trade deal was first unveiled in July, when South Korea agreed to invest hundreds of billions of dollars in U.S. projects in exchange for lower tariffs.
(Reporting by Kanishka Singh in Washington, Ju-min Park, Heejin Kim, Cynthia Kim, Hyunjoo Jin in Seoul; Writing by Jack Kim; Editing by Himani Sarkar, Ed Davies and Thomas Derpinghaus)
Comments