As trade negotiations between South Korea and the United States reach their crucial final stage, the Korean delegation has taken a decisive step by visiting the US Office of Management and Budget (OMB) at the White House. This key visit, reported on October 16 (local time), underscores the urgency with which both nations are seeking a resolution—particularly regarding the complex question of how to fund a $350 billion US investment.

According to officials, Kim Yong-beom, Policy Chief at the Presidential Office, and Kim Jung-gwan, Minister of Trade, Industry and Energy, landed in Washington, DC and promptly began talks with the OMB on follow-up matters related to tariff negotiations. The primary aim is to connect directly with influential US officials and secure support for a conclusive agreement on trade.

Deputy Prime Minister and Minister of Economy and Finance Koo Yoon-cheol, who is in Washington for the 'G20 Finance Ministers and Central Bank Governors Meeting' and the 'IMF-World Bank Annual Meetings,' also joined the discussions. The talks took place in the early hours of October 17, Korea time.

The OMB, as the leading US agency for federal budget management and policy implementation under the President, plays an integral financial role in supporting government initiatives. Observers see the Korean delegation’s outreach to the OMB as a strategic move to intensify engagement with those close to President Donald Trump's administration, hoping to enlist their backing to finalize the trade deal.

While negotiations are reportedly at their climax, the specifics of how Korea will meet the US demand for an astronomical $350 billion investment remain undisclosed. This has led to industry speculation about a variety of financing mechanisms.

Some experts propose using the won currency, rather than the US dollar, to minimize the shock to Korea’s foreign reserves. One suggested model involves a direct won-purchasing arrangement via a currency swap with the US Treasury, rather than a central bank-to-central bank swap. The United States has engaged in a similar swap totaling $20 billion with Argentina in the past.

However, the sheer size of the current deal—$350 billion—has raised questions about the viability of such methods. Another option on the table involves issuing dollar-denominated foreign exchange stabilization bonds, but critics note that relying on sovereign debt fails to address the underlying challenges of such a massive investment.

Ultimately, the pivotal issue remains to what extent the United States will accept proposals for a currency swap with Korea—a factor that could make or break the final trade agreement.

Note “This article was translated from the original Korean version using AI assistance, and subsequently edited by a native-speaking journalist.”

Photo=Yonhap News