Market Update: DP, PPP agree to establish new state-run entity specialized in implementing U.S. investment pledge – Full Analysis

 

The ruling Democratic Party (DP) and the main opposition People Power Party (PPP) agreed on Thursday to establish a new state-run entity specialized in implementing Korea’s investment package for the United States, officials said.

 

The agreement came a day after the rival parties said they were expected to pass a special U.S. investment bill without delay on March 12 under a bilateral trade deal with Washington.

 


 

With a paid-in capital of 2 trillion won ($1.36 billion), the Korean government will fully finance the new entity, according to lawmakers.

 

During a subcommittee meeting of a special parliamentary committee dedicated to advancing legislation on Korea’s $350 billion investment pledge to the United States, the two parties agreed to establish the special corporation with a total work force of up to 50 employees.

 

“After discussions on whether to entrust the task to the Korea Investment Corporation or establish a new one, we agreed to create a new corporation at the minimal scale,” PPP Rep. Park Soo-young told reporters after the meeting.

 

The corporation will have three members on the board of directors who will be required to have at least 10 years of experience in the financial or strategic sectors.

 

The PPP earlier called for setting up a fund under the Ministry of Finance and Economy to oversee the investment, citing substantial costs in establishing a new entity, while the DP has stressed the need to create a dedicated investment corporation to better support Seoul’s investment plans in the United States.

 

In January, U.S. President Donald Trump threatened to raise reciprocal tariffs on Korean goods back to 25 percent from 15 percent due to the delay in Seoul’s legislative process needed to move the trade deal forward.

Yonhap