NEW YORK -- President Lee Jae Myung held talks with US Treasury Secretary Scott Bessent at United Nations headquarters in New York on Wednesday on the occasion of Lee's visit to attend the UN General Assembly, amid ongoing trade negotiations between Seoul and Washington.
Lee told Bessent that talks over South Korea's $350 billion investment in US projects -- in return for a US tariff cut on most South Korean goods -- should proceed "in a way that is commercially reasonable and serves the interests of both countries," Kim Yong-beom, director of national policy at the presidential office, said in a briefing in New York. He was referring to a trade deal reached in late July that was followed by a summit between Lee and US President Donald Trump in late August.
To Bessent, Lee conveyed South Korea's stance that the deal has to be "reasonable and bearable" from Seoul's standpoint, Kim also said.
This comes amid differences between the two countries over the form of South Korea's $350 billion investment, as the US demanded upfront cash investment in equity during a follow-up negotiation after the July deal, whereas South Korea sought to invest mostly in a structure of loans and guarantees, which involve a minimal cash flow.
Seoul has said that South Korea will experience a severe shortfall in its US currency reserves if the $350 billion investment deal involves an immediate cash infusion. Lee said in an interview with Reuters just before his trip to the US that, if so, South Korea's economy would spiral into a crisis equivalent to the 1997 Asian financial crisis.
This has led to calls for a new US currency swap deal. Kim told reporters that a new currency swap arrangement will not by itself resolve the gridlock in negotiations, adding that Seoul was seeking a US concession on its demand for a South Korean cash investment.
"If you take a closer look at how the US is defining cash flow and listen to what they're saying, you will see that they're talking about what is close to equity (investment)," Kim said.
"Since the US is not responding to our demand to define cash flow our way -- which is to separately recognize cash flow through loans, guarantees and other investments -- we are negotiating to define 'cash flow' as closely as possible to loans."
Kim said that Bessent was initially invited to be a keynote speaker at an investor summit that Lee was scheduled to host in New York on Thursday. Bessent asked for a meeting with Lee instead because he could not attend the event.
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