Ruling and Opposition Parties Clash Over Tariff Negotiation Ratification at Finance Committee... Agreement Reached on 700 Billion Won Reserve Fund

Ruling Party: "Ratifying the MOU Would Shackle Us"
Opposition: "Negotiation Imposes Heavy Fiscal Burden, Ratification Is Necessary"

The dispute over whether the National Assembly should ratify the Korea-US tariff negotiations also unfolded at the Planning and Finance Committee of the National Assembly. The government and the ruling party maintain that ratifying the memorandum of understanding (MOU) between Korea and the United States in the National Assembly would reduce the country's ability to respond to future changes. In contrast, the opposition party argues that, given the significant fiscal burden involved, transparent verification through the ratification process is necessary.

Park Dae-chul, a member of the People Power Party, stated at the plenary session of the Planning and Finance Committee held on this day, "We must ask the people how to use their valuable tax money," and emphasized, "The only way to ask them is through the National Assembly."

Article 60, Paragraph 1 of the Constitution stipulates that the National Assembly has the right to consent to the conclusion and ratification of treaties concerning mutual assistance or security, important international organizations, treaties of friendship, commerce and navigation, treaties that restrict sovereignty, peace treaties, treaties that impose significant fiscal burdens on the state or the people, or treaties related to legislative matters.

The opposition party argues that, since the total investment in the United States amounts to 350 billion dollars (approximately 510 trillion won), there is a significant fiscal burden on the public, and thus National Assembly ratification is necessary. Park stated, "They say ratification is not required because it is an MOU, but then does that mean special laws have no binding force?" He continued, "Regardless of whether it is an agreement, an MOU, or a treaty, has there ever been a case where the National Assembly did not consent to ratification of a negotiation that imposes a fiscal burden on the people?"

The Democratic Party of Korea and the People Power Party clashed over the National Assembly's ratification of the Korea-US tariff negotiations during the full meeting of the National Assembly's Planning and Finance Committee held on the 17th. Photo by Yonhap News Agency

On the other hand, the government and the ruling party believe that follow-up measures can be taken through the enactment of a special law rather than National Assembly ratification. Koo Yoon-cheol, Minister of Economy and Finance and Deputy Prime Minister for Economic Affairs, stated at the meeting, "Article 25 of the MOU clearly stipulates that, as an administrative agreement, it does not create legally binding rights or obligations," and added, "If the National Assembly ratifies it, the United States will not bear any obligations in the future, but Korea will continue to be bound by them."

Kim Young-jin, a member of the Democratic Party of Korea, also countered, "This (National Assembly ratification) would be an own goal in economic negotiations," adding, "If we give our consent to ratification first, we will have no room to respond to future changes. It is not reasonable for the National Assembly to advocate for ratification that undermines the national interest."

Kim Tae-nyeon, another member of the Democratic Party, emphasized, "The issue of ratification keeps coming up, but do we really need to shackle ourselves? If we proceed with ratification, our responsibilities will increase, but I don't think this is a matter that warrants it."

There was also conflict between the ruling and opposition parties over next year's budget allocation for follow-up measures to the Korea-US tariff negotiations, but a dramatic agreement was reached. Regarding the 700 billion won budget for the Korea Eximbank's trade response program, the Democratic Party argued in the Planning and Finance Committee's Budget and Settlement Fund Review Subcommittee that there was no issue, citing a verbal agreement between the two parties. However, the People Power Party countered that the details of the Korea Eximbank's investment, support methods, and targets had not been clearly explained.

Park Sung-hoon, a member of the People Power Party, pointed out, "A precise structure must come first before injecting the people's hard-earned tax money. If you add the 700 billion won for the Korea Eximbank to the Korea Development Bank and Korea Trade Insurance Corporation, the total is 1.9 trillion won." He continued, "The government and ruling party initially seemed to envision a structure in which the Korea Eximbank would provide support and guarantees through investment and operational leverage, but with the transition to a special law, there has been no clear explanation of the structure."

On the other hand, Democratic Party lawmaker Jung Il-young, who chairs the Planning and Finance Committee's Budget and Settlement Fund Review Subcommittee, countered, "We approved it this morning in accordance with normal procedures (in the subcommittee)," and added, "With the tariff negotiations concluded, we need to provide guarantees related to the 150 billion dollars in investment. The government also determined that it was necessary to include a budget of 700 billion won for the Korea Eximbank, 600 billion won for the Korea Development Bank, and 600 billion won for the Korea Trade Insurance Corporation, totaling 1.9 trillion won."

As the conflict of opinions intensified, the meeting was temporarily suspended, but the ruling and opposition party secretaries agreed to allocate a 700 billion won budget as originally proposed by the government. However, since the relevant law and fund have not yet been established, it was decided to allocate the 700 billion won as a reserve fund for designated purposes and conduct a comprehensive review together with the related bill in the Budget Committee in the future.

Park Soo-young, the opposition secretary of the Planning and Finance Committee, stated, "Through discussions between the secretaries, we agreed not to reduce the 700 billion won for the US investment support project, but since the law and fund have not yet been established, we will allocate the 700 billion won as a reserve fund for designated purposes as originally proposed."

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