Seoul, Nov 26 (NationPress) South Korea is set to temporarily create a strategic investment corporation aimed at managing a special fund for the nation's $350 billion investment in the United States, as outlined in a bilateral tariff agreement finalized last month, the government announced on Wednesday.

The proposed corporation, provisionally named Korea-U.S. Strategic Investment Corp., will operate for up to 20 years under a special legislative proposal submitted by the ruling Democratic Party to bolster Seoul's investment initiatives in the U.S., as detailed in a joint press release from the finance and industry ministries, according to reports from Yonhap news agency.

The administration aimed to submit the bill within this month following the finalization of the $350 billion investment commitment by President Lee Jae Myung and U.S. President Donald Trump during their summit in Gyeongju on October 29, which was made in exchange for reduced U.S. tariffs.

According to the final agreement, the investment will include $200 billion in cash installments, capped at $20 billion annually, along with an additional $150 billion dedicated to bilateral shipbuilding initiatives.

In return, the U.S. administration has consented to decrease the 25 percent tariffs on Korean automobiles to 15 percent, with the reduction being applicable retroactively from the month the bill is submitted.

Shortly after the bill submission, Industry Minister Kim Jung-kwan sent a formal notification to U.S. Commerce Secretary Howard Lutnick, informing the U.S. administration of this development and urging a swift announcement regarding the retroactive application of reduced tariffs for Korean vehicles in the Federal Register, according to Kim's office.

The proposed investment corporation, to be funded by the government, will be responsible for the creation, management, and operation of the Korea-U.S. strategic investment fund, as stated by the ministries.

Resources for the fund will be sourced from profits generated by foreign exchange reserves managed by the government and the Bank of Korea, along with the overseas issuance of government-backed bonds, they explained.

The government indicated that the special bill mandates compliance with safeguard measures specified in the memorandum of understanding (MOU) regarding the investment commitment signed by both nations.

These safeguard measures include the $20 billion annual investment cap, potential adjustments to investment amounts and timing to mitigate any risks of instability in Korea's foreign exchange market, as well as the selection of “commercially reasonable” projects and others.

The MOU stipulates that both countries will form a Consultation Committee led by Korea's industry minister and an Investment Committee chaired by the U.S. commerce secretary to oversee a special purpose vehicle (SPV) that will manage their collaborative projects.