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Bills in limbo: Korean lawmakers move to ensure investments in U.S. don't go to waste

Published: 13 Feb. 2026, 07:00

LEE SOO-JUNG
[email protected]

A motion to establish the special committee to pass the special act for Korea's investment in the United States is passed by bipartisan agreement at the National Assembly in western Seoul on Feb. 9. [YONHAP]

[EXPLAINER]

The bilateral trade deal between Seoul and Washington took an unexpected turn after U.S. President Donald Trump declared plans to increase tariffs on Korean imports from the agreed-upon 15 percent to 25 percent after calling out the Korean legislature’s inaction on passing necessary laws to enable investment in the United States.

The Korean government has since scrambled to meet with U.S. officials and deliver a message that Seoul is still committed to its side of the deal, which includes a $350 billion investment pledge.

Amid the delays, the National Assembly established on Monday a special bipartisan committee to handle the tentatively named special act on the management of strategic investment between Korea and the United States. Lawmakers have presented several versions of the investment bill.

The ruling Democratic Party (DP) holds a majority in the National Assembly with 162 out of 296 seats.

"I would like to tell the U.S. government that the Korean National Assembly duly abides by our law and procedures with willingness to swiftly pass the bill," National Assembly Speaker Woo Won-shik said Monday, and "that our longstanding bilateral alliance is rooted in mutual and in-depth trust."

While such moves appear to have appeased Washington to some extent, the White House has so far not backed down from its pledge to reimpose 25 percent tariffs on Korea. A White House official reportedly said Tuesday that the formation of the committee was a positive step toward fulfilling obligations under the bilateral trade agreement.

Korean President Lee Jae Myung, left, and U.S. President Donald Trump chat during their first bilateral summit at the White House in Washington on Aug. 25, 2025. [JOINT PRESS CORPS]

On July 30 of last year, Seoul reached a last-minute trade deal with Washington and agreed to a "reciprocal" 15 percent tariff in exchange for $350 billion in investment in the United States. The following memorandum of understanding (MOU), which outlined transactional protocols on the strategic investment, was signed in November.

The Korean government plans to establish a special fund to finance $350 billion to the United States. Procedurally, such an investment should be backed by the special act, which will provide a legal framework for implementing the massive investment.

As of Thursday, nine separate bills — one from an independent lawmaker, five from the DP and three from the opposition People Power Party (PPP) — have been submitted. With the establishment of a special committee, the parliament is on track to pass one of the nine bills or make modifications in early March.

However, partisan politics appear to linger, as the rival parties engaged in a tense war of words during the committee's inaugural meeting on Thursday over the DP's unilateral passage of unrelated judicial reform bills.

What are the proposed bills?

A table comparing nine parliamentary bills governing Korea's strategic investment to the United States [YUN YOUNG]

Of the nine submitted bills, eight stipulate the establishment of a separate state-managed corporation to operate the $350 billion investment fund, tentatively called the "Korea-U.S. strategic investment corporation." The corporation will cease to exist 20 years after its foundation.

Six bills set the corporation’s legal capital at 3 trillion won ($2.08 billion). Only the bills from DP Rep. Ahn Do-geol and PPP Rep. Park Soo-young defined the legal capital at 5 trillion and 1 trillion won, respectively. Legal capital refers to the statutory minimum amount of equity that a corporation should hold.

The legal capital is likely to be provided by the Korean government. The task of legal capital financing can be partially outsourced to the state-run Korea Development Bank, except for a bill drafted by DP Rep. Chung Il-young, which allows the president to determine the specific timing and means of the contribution.

Within the corporation, the operations committee — helmed by the finance minister — will oversee all strategic investments and approve funding. Each Korean fiscal year, investments of no more than $20 billion will be funneled to the United States per decisions by the operations committee.

PPP Rep. Kim Gunn's bill would simply place the operations committee under the Ministry of Finance and Economy, without founding the separate corporation.

Besides the operations committee, a business management committee would discover investment opportunities and assess their “commercial reasonableness and legal validity.” The business management committee would likely be placed under the Ministry of Trade, Industry and Resources and helmed by the trade minister. Only DP Rep. Ahn’s bill would place the committee inside the corporation.

What's causing the delay, and what are the points of concern?

Anti-Trump protesters call for reexamination of Korea's investment in the United States during a rally held in central Seoul in October 2025. [NEWS1]

While the bills have been waiting for review and passage since late November, Korean politicians have engaged in a tug-of-war over legislative procedure.

The PPP ha s argued that the bilateral trade deal must be ratified because a $350 billion investment would put the nation and Koreans under significant financial pressure. On the contrary, the government and the ruling DP dismissed the PPP’s claim. They explained that the MOU — which is technically not a treaty — does not require parliamentary ratification. The discord hindered bipartisan support until late January.

Lawmakers across the political spectrum agreed on the need to protect the Korean currency market and national interests. Thereby, they added safety mechanisms to the books.

The nine bills mandate the operations committee to request that the finance minister consult with U.S. counterparts on adjusting the amount and timing of the investment when it is expected to destabilize the Korean currency.

President Lee Jae Myung, right, presents U.S. President Donald Trump with the Grand Order of Mugunghwa and a model of the Cheonmachong gold crown at the Gyeongju National Museum in Gyeongju, North Gyeongsang, on Oct. 29. [JOINT PRESS CORPS]

Some of the bills granted greater authority to the operations committee through exit clauses, which can even halt new investments in the United States.

The operations committee may suspend or adjust upcoming investments if the United States makes material changes to the premises set out in the MOU, such as tariff impositions or regulatory changes, according to DP Rep. Hong Kee-won’s bill. The bill allowed the National Assembly to demand that the investment suspensions or modifications be referred to the operations committee. Unless there are “fair reasons,” the committee must conform to parliamentary instructions. In addition, the trade minister must consult Washington on whether to amend or halt the MOU.

DP Rep. Jin Sung-joon’s bill requires the trade minister to talk with the U.S. Investment Committee and seek recollection of funds when Korea anticipates an excessive deficit due to the investment. A material change posing obstacles to achieving investment objectives can also trigger the recollection.

Rep. Chung's bill would empower the operations committee to review or decide on measures to recover or dispose of all or part of investment funds when significant changes in policies, economic and diplomatic circumstances are likely to adversely affect commercial reasonableness or cause a large deficit for Korea.

DP Rep. Jung Tae-ho's bill would allow the finance and trade ministers to request a halt, a remedy or a reassessment of an investment if its economic reasonableness deteriorates significantly. In addition, the trade minister can recall the investment fund or adjust the investment if the objectives of the investment are fulfilled, market changes hamper the accomplishment of such objectives, or excessive deficit — exceeding the threshold set by a presidential decree — is anticipated.

How much authority does the Korean parliament have?

Conservative People Power Party floor leader Song Eon-seog, left, and liberal Democratic Party floor leader Han Byung-do, hold an agreement on the formation of the special committee to pass the special act on Korea's investment to the United States at the National Assembly in western Seoul on Feb. 4. [NEWS1]

Korea's parliament can require a range of measures before investments are made on U.S. soil, from mandates to regularly report performance to prior authorization of investments.

The lawmakers aim to reinforce a principle of "democratic governance" by enabling the Assembly to practically oversee the entire process from investment design to execution. They vowed that their oversight would not harm the effectiveness of bilateral strategic investment.

Reps. Jin, Kim Gunn, Park Soo-young, and Park Sung-hoon's bills would require parliamentary approval before launching strategic investments.

Rep. Kim Gunn’s bill requires the Assembly to review documents entailing the impact assessment on Korea’s domestic economy and estimate of expenses and schemes to raise the fund in accordance with the second provision of Article 13 of the Act on the Conclusion Procedure and Implementation of Commercial Treaties.

Rep. Ahn's bill aims to mandate approval for sizable investment cases of $3 billion or more. His bill allows post-hoc approval for cases sensitive to national security and diplomacy.

Rep. Hong’s bill appears to be relatively lenient, as massive investment cases are subject to reporting to the parliament. Yet changes to the bilateral trade environment or tariff schemes, deemed crucial by the Korean presidential decree, will require the operations committee to obtain parliamentary approval under the revised investment plan.

Some bills also render the Assembly a watchdog of the corporation’s asset management.

According to Rep. Chung’s bill, the corporation would have to report on fund management status twice a year to parliament and provide additional reporting on the selection of investment beneficiaries, the amounts invested, and their impact on Korea’s currency market.

Rep. Ahn's bill requires that meeting records between Korean corporation officials and their American counterparts be submitted to the parliament within 30 days of the talks. The records can be managed as classified if disclosure could affect national security or the economy, or if it could reveal trade secrets.

What assurances is the parliament giving?

A bipartisan parliamentary committee to pass a special act governing Korea's strategic investment in the United States convenes its inaugural meeting at the National Assembly in western Seoul on Feb. 12. [LIM HYUN-DONG]

With the nine bills awaiting parliamentary review, the Assembly speaker and lawmakers have reiterated that legislative measures have been undertaken in due process.

The bipartisan committee — which consisted of eight DP lawmakers, seven PPP lawmakers and one from a minor party — is set to complete its review and decide the specifics of bills by March 9. The committee was set to kick off its review and discussion on the proposed bills on Thursday.

On Monday, Assembly Speaker Woo requested lawmakers to "discuss the bills tightly for the passage within February — if possible — due to pressing and urgent reasons that everyone knows."

Such remarks appeared to be a gesture to reassure Washington that Seoul is still committed to the investment agreement.

Last week, Woo called the passage of the bill for strategic investment in the United States “the most pressing priority” during his press conference.

Previously, a day after Trump announced a tariff hike last month, Woo ordered the rival parties to focus on reviewing the bill rather than engaging in partisan arguments.

“The National Assembly is legislating [the necessary bill] through its usual processes, and there is no reason to have concern,” Woo said. “Our country is an ally of the United States. We hope to uphold good faith in the agreement between our two countries."

BY LEE SOO-JUNG [[email protected]]