‘Korea-US Strategic Investment Special Act’ Passes National Assembly with Bipartisan Agreement

The "Special Act on the Operation and Management of Strategic Investment between the Republic of Korea and the United States of America" (Korea-US Strategic Investment Special Act) has cleared the plenary session of the National Assembly of the Republic of Korea through bipartisan agreement. Lawmakers from both ruling and opposition parties joined forces in response to tariff hike pressure from United States of America (U.S.) President Donald John Trump. With a legal basis now in place for Korea’s planned U.S.-bound investment of $350 billion (about 510 trillion won), attention is focusing on whether this will help ease U.S. tariff risks.
On the 12th, the National Assembly held a plenary session and passed the Korea-US Strategic Investment Special Act. The act establishes the Korea-U.S. Strategic Investment Corporation to carry out the Korean government’s investments in the U.S., and creates a Korea-U.S. Strategic Investment Fund within the corporation. The fund will be financed through capital contributions to the corporation, entrusted assets, and the issuance of Korea-U.S. Strategic Investment Bonds. The law also sets out a standard of "commercial reasonableness" for investments in the U.S., and requires prior approval from the National Assembly if the government seeks to pursue U.S.-bound investments that do not meet this standard.
Having completed the major task of passing the Korea-US Strategic Investment Special Act, the National Assembly now plans to move on to follow-up measures. The Korea-U.S. Parliamentary Association, a bipartisan lawmakers’ group, will visit the U.S. on the 23rd to explain the details of the special act. The delegation also intends to discuss potential sectors and projects for U.S.-bound investment.
Issues raised by the U.S. side regarding alleged unfair practices by digital enterprises will also require further discussion. Lawmakers must first address the government’s plan to revise the Online Platform Act and the Online Platform Fairness Act. The U.S. views the proposed regulations on American Big Tech companies, currently pending in the Korean National Assembly, as potentially discriminatory, and has signaled that retaliatory tariff hikes are on the table. As a result, Korean authorities are expected to conduct a thorough review of the relevant provisions.
The Trump administration’s decision to launch an investigation under Section 301 of the Trade Act of 1974, a procedure for imposing additional tariffs on 16 economic entities including Korea, China, and Japan, is a negative development for Korea. Because this is a preliminary step toward restoring reciprocal tariffs, it has cast a cloud over the outlook. Although passage of the Korea-US Strategic Investment Special Act paves the way for full-fledged discussions on U.S.-bound investment projects, the risk of renewed U.S. tariff hikes remains.
Meanwhile, the National Assembly passed more than 50 livelihood and reform bills at the plenary session on the same day. These included an amendment to the Act on Promotion of Information and Communications Network Utilization and Information Protection (Information and Communications Network Act) to strengthen the response to Voice phishing (vishing), and an amendment to the Emergency Medical Service Act aimed at reducing regional disparities in emergency medical services. In addition, lawmaker Jin Sung-joon was elected Chairperson of the Special Committee on Budget and Accounts of the National Assembly, which had been vacant, and a request was formally reported for a "Parliamentary Investigation into Alleged Fabricated Indictments by Political Prosecutors under the Yoon Suk Yeol Administration." The parliamentary investigation into state administration will cover seven cases, including President Lee Jae-myung’s Daejang-dong, Wirye New Town, and Cash-for-summit scandal cases; the political funds case involving Kim Yong, former deputy head of the Institute for Democracy and a close aide to the president; the Moon Jae-in administration’s Real Estate Statistics Manipulation Scandal and the West Sea civil servant shooting incident; and a defamation case involving former President Yoon Suk Yeol related to reports that he blocked an investigation into Busan Savings Bank.
By contrast, the Daegu-Gyeongbuk Administrative Integration Special Act and the Special Act on Daejeon–South Chungcheong Administrative Integration ultimately failed to clear the plenary session. Although there is broad consensus that these bills should be passed during the March extraordinary session of the National Assembly, before the local elections, observers say that appears difficult under current conditions. Song Eon-seok, floor leader of the People Power Party (PPP), on this day called for the immediate passage of the Daegu–Gyeongbuk Administrative Integration Special Act (TK Integration Act) and proposed forming a Special Committee on Administrative Reorganization of the National Assembly to discuss integration in other regions such as Daejeon and South Chungcheong Province.
Reporter Lee Ha-ram, Reporter Kim Hyeong-gu