[Achievements of Yoon's US Visit] Economic Package Includes 8 Trillion Sales and 50 MOUs

Achieved 8 Trillion KRW Sales Including Netflix Within Two Days of Arrival in the US
Expecting Synergy from Major MOUs in Bio and Energy Sectors
IRA and Semiconductor Act Reduced Uncertainty but Detailed Coordination Pending

Marking the 70th anniversary of the Korea-US alliance, President Yoon Suk-yeol achieved tangible results in the economic security sector to elevate bilateral relations to a new level through a state visit to the US, the first in 12 years. The Presidential Office evaluates that a solid consensus was established in line with the vision of a 'just Korea-US alliance contributing to world peace and prosperity' shared between the two leaders. During the 7-day, 5-night schedule, President Yoon focused on celebrating the historical achievements accumulated over 70 years and exchanging views on the future development direction of the alliance.

As South Korea’s first chief sales officer, President Yoon, accompanied by an economic delegation of over 120 members, achieved remarkable economic outcomes during this tour. Not only did he secure investments from global companies, but efforts to diversify economic cooperation areas also stand out as major accomplishments. Future synergies are expected from the establishment of a mutually beneficial supply chain ecosystem, including semiconductors, clean energy, and advanced industries, as well as the creation of a reciprocal corporate investment environment.

On the 24th (local time), as the first agenda of the state visit, President Yoon met with the CEO of Netflix and secured an investment of $2.5 billion (approximately 3.3 trillion KRW). By the 25th, just two days later, he succeeded in attracting a total of $5.9 billion (about 7.9 trillion KRW) in investments. With cooperation between the government and the domestic economic delegation, as US companies increase their investments in Korea, the achievements in the field of 'economic diplomacy' are expected to continue.

In particular, the state visit led to the signing of 50 memorandums of understanding (MOUs) between Korea and the US. About half of these pertain to the bio sector, including pharmaceuticals, medical devices, digital health, and equipment exports. Regarding the US Inflation Reduction Act (IRA) and the CHIPS and Science Act (CSA), the two leaders clearly agreed to reduce the burdens on Korean companies, and further government-level coordination is anticipated.

Accompanied by an economic delegation of over 120 members, the scope of agreements expanded to industries such as bio, batteries, semiconductors, AI (13 MOUs), energy (13 MOUs), and content (1 MOU). In the energy sector, significant MOUs were signed. Alongside clean energy and hydrogen-related MOUs, MOUs were also signed with three major US companies in small modular reactors (SMR)?TerraPower, Holtec, and NuScale Power?signaling a leading role for companies from both countries in the SMR business.

On the 26th, the highlight of President Yoon’s US visit, the Korea-US summit, resulted in an agreement to discuss and coordinate on the IRA and semiconductor laws. Although these issues had been pointed out as sensitive topics ahead of the visit, the summit strengthened strategic partnership rather than engaging in tense negotiations, raising expectations for practical easing through this meeting.

However, the absence of detailed coordination on the IRA and semiconductor laws, which the domestic industry had long anticipated, remains a regrettable point. Regarding the IRA, Korean automobile companies were excluded from the final list of subsidy recipients announced by the US government. From Korea’s perspective, buying time until reducing dependence on China is crucial, so measures to minimize immediate damage through time extensions and flexible application of detailed regulations were necessary.

Regarding semiconductors, the US government is demanding companies submit sensitive information such as yield rates (the ratio of acceptable products among manufactured items). This was another key point where alignment between the two leaders was expected. The domestic industry unanimously called these provisions "excessive" and hoped for agreements to minimize the scope of confidential data submission during the summit.

The President’s perspective differed. Choi Sang-mok, Senior Secretary for Economic Affairs, stated, "The two leaders clearly agreed on reducing the burdens and uncertainties for Korean companies regarding the US-centered supply chain strengthening policies, including the IRA and semiconductor laws," and confirmed that President Biden issued clear guidelines on this matter. He added, "The IRA and CSA are industrial policies aimed at promoting domestic investment in the US and strengthening supply chains centered on the US. Therefore, as allies, exceptional measures to reduce burdens and uncertainties for our companies require highly technical and detailed intergovernmental consultations. This time as well, the two leaders clearly agreed on the direction to reduce burdens and uncertainties for Korean companies." Since the Korea-US alliance has expanded into a supply chain alliance, both governments share the recognition of the issue, and discussions are expected to continue.

[Image source=Yonhap News]

This content was produced with the assistance of AI translation services.