SEoul, March 9 - A parliamentary committee in South Korea is expected to finalise on Monday the wording of a special bill designed to implement a bilateral trade agreement that would allow $350 billion in U.S. investments. The committee action would set up a timetable for a plenary vote later this week, with the National Assembly scheduled to consider the bill on March 12.
The proposed legislation, titled the "Special Act on Investment in the U.S.," would establish an investment vehicle and create a risk management committee tasked with carrying out last year’s pact. Under that agreement, South Korea agreed to channel investments into sectors including shipbuilding and semiconductor chips in exchange for lower U.S. tariffs.
The move to finalise the bill comes amid pressure from Washington over what U.S. officials have described as delays in enacting the trade deal. In January, U.S. President Donald Trump threatened to raise tariffs on goods imported from South Korea, accusing the country’s parliament of lagging on implementation of the agreement.
South Korean officials have said the trade deal with the United States remains in force despite a U.S. Supreme Court decision in February that invalidated a large portion of the former president’s tariff measures. Seoul has, however, flagged concerns about the effects that significant inbound U.S. investment could have on the already weak Korean won.
Officials in Seoul have indicated that any projects under the special act will proceed only after assessments of commercial feasibility and consideration of foreign exchange market conditions. That stance suggests authorities will weigh the economic and market context before approving specific investments.
The special committee considering the bill includes lawmakers from both the ruling Democratic Party and the opposition People Power Party. The panel is scheduled to review the final draft at a subcommittee meeting on Monday, and the legislation is slated for approval at a general committee meeting later in the afternoon.
Key points
- The parliamentary committee will finalise the bill text on Monday, leading to a National Assembly vote on March 12.
- The "Special Act on Investment in the U.S." would create an investment vehicle and a risk management committee to implement last year’s agreement, focusing on sectors such as shipbuilding and chips.
- Officials are attentive to the impact of large U.S. investments on the Korean won and will base projects on commercial feasibility and foreign exchange conditions.
Risks and uncertainties
- Potential currency pressure: Officials have expressed concern about effects on an already weak won - impacting foreign exchange markets and sectors sensitive to exchange rates.
- Political and procedural risks: The need for committee and plenary approval means timing and legislative approval remain subject to parliamentary processes.
- Regulatory and legal uncertainty: A U.S. Supreme Court decision in February altered the status of broad tariff measures, which could affect how the deal is implemented going forward.