US-South Korea $200 billion deal in doubt — Korea Herald
Negotiations between the United States and South Korea on an agreement for Seoul to invest $200 billion in US projects remain uncertain. The sides are trying to agree on a list of nuclear projects, a financing schedule and a risk-sharing mechanism, Korea Herald reports. South Korea’s Ministry of Industry postponed a briefing for lawmakers on the first project under the plan, prompting speculation that the negotiations have been delayed.
Foreign Minister Cho Hyun, who traveled to Washington, said the issue concerns clarifying internal procedures rather than disagreements between the countries. He is due to meet US Secretary of State Marco Rubio; the Korean Peninsula, regional and global issues will also be among the topics of discussion.
Disputes over reactors
One of the main points of disagreement has been nuclear energy. The countries discussed building eight reactors in the United States: six based on the US Westinghouse AP1000 design and two based on the Korean APR1400 design. Seoul’s contribution to these projects could potentially amount to $120 billion, the larger part of the total investment commitment.
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According to Chosun Ilbo, US officials and Westinghouse oppose including the Korean reactor model in the package. The sides have also not agreed on the parameters of possible South Korean investments in Westinghouse, which is considering an initial public offering. Seoul seeks a stake of 15% to 20%, voting rights and a seat on the board of directors, while Westinghouse wants the stake to be below 10%.
Financing and profit sharing
Washington, according to Herald Business, asked Seoul to transfer more than 13 trillion won, or $9.4 billion, by the end of the year, even before the projects and allocation of funds are finally determined. This is nearly half of the annual $20 billion limit of the investment plan. South Korea had previously considered contributing at least $2.2 billion this year and, from 2027, up to $20 billion annually for 10 years.
Seoul’s possible participation in an Alaska liquefied natural gas project, investments in spent nuclear fuel reprocessing and the construction of a gas power plant in Encinal, Texas, are also being discussed. Separately, the sides differ in their approach to accounting for revenue: Seoul proposes offsetting losses from some projects with profits from others, while Washington insists on separate calculations for each project. Under the agreed framework, the United States would receive 90% of net profit after the principal and interest are repaid. South Korea’s Ministry of Industry said that no final decisions on the projects or financing structure have yet been made.
