COVER STORY Korea-US $200 bil. investment talks hit last-stage hurdles over 'commercial viability'
Korea's Industry Minister Kim Jung-kwan, left, shakes hands with U.S. Commerce Secretary Howard Lutnick during the G20 Innovation Ministerial Meeting in Chapel Hill, N.C., Sept. 2. Courtesy of Ministry of Trade, Industry and Resources
Nuclear, energy issues complicate talks, delay 1st project
Korea’s negotiations with the United States over a $200 billion investment package have run into last-stage hurdles, with the two sides disagreeing over nuclear reactors, energy projects and funding terms.
The Ministry of Trade, Industry and Resources postponed a parliamentary briefing initially scheduled for Thursday, which had been expected to clear the way for signing of a memorandum of understanding for the first project as early as Friday. The briefing is now expected to take place Monday or Tuesday, although the timing will depend on progress in the negotiations.
President Lee Jae Myung acknowledged that some provisions remained difficult to accept despite the negotiations being close to an agreement.
“After reviewing the details, there are parts that are not easy to agree to,” Lee said during a press conference at Cheong Wa Dae in Seoul, Friday. “We are discussing them again.”
Lee said the investment negotiations had broad, complex implications for Korea-U.S. relations and that disagreements emerged as the talks moved into specific projects.
“There were several points of contention during the initial agreement process. Once we began discussing the specific investments, 'commercial viability' became an issue again,” the president said.
Lee stressed that commercial viability would be a key principle in deciding which projects to pursue. “We will pursue only projects with commercial viability,” he said. “National interest is truly important.”
A graph generated by ChatGPT
One of the key sticking points is a proposed eight-reactor nuclear project in the U.S. Seoul has been seeking a mix of six Westinghouse AP1000 reactors and two Korean-designed APR1400 units. The U.S. side is reportedly reluctant to include the Korean-designed reactors, despite the APR1400 having received U.S. Nuclear Regulatory Commission design certification, clearing a key regulatory hurdle.
The APR1400 issue is closely tied to Seoul’s push for a larger stake and greater management rights in Westinghouse. Korea has reportedly sought a roughly 20 percent stake, along with board representation and voting rights, while the U.S. side is understood to favor a smaller, nonvoting stake of about 5 to 10 percent.
The dispute is significant as Korea wants the investment package to create opportunities for its nuclear technology and companies, while the U.S. has an interest in maintaining a strong role for Westinghouse and its AP1000 technology.
“(The U.S.’ opposition) could be part of its negotiating strategy,” an industry official said on condition of anonymity. “Building the APR1400 had been under discussion for quite some time, but after the Korean side began moving to increase its stake in Westinghouse and secure board voting rights, opposition to the APR1400 began surfacing.”
The source said the two APR1400 units remain crucial to Seoul in reaching an agreement. “I understand that it would be difficult for us to sign the agreement without building the two APR1400 reactors,” the official said. “Signing the agreement does not mean that it will immediately be carried out … Details need to be worked out internally afterward. As far as I understand, nothing has been decided in detail.”
President Lee Jae Myung speaks during a press conference at Cheong Wa Dae in Seoul, Friday. Yonhap
Another emerging issue is a reported U.S. proposal for Korean investment in pyroprocessing, a method of reprocessing spent nuclear fuel. Washington is seeking investment in facilities that could process spent fuel from U.S. nuclear power plants, raising questions over whether the project would fit within the $200 billion framework and how it would relate to broader nuclear fuel-cycle discussions.
Beyond nuclear power, the first investment project itself remains a point of contention. The proposed Encinal natural gas-fired combined-cycle power plant in Texas has emerged as a leading candidate, with an estimated cost of about $22.3 billion.
The plant is intended to supply electricity to large-scale customers such as artificial intelligence data centers and semiconductor facilities, but securing sufficient power demand remains a concern. The project’s cost has also risen from earlier estimates, raising questions in Seoul about its commercial viability. Before committing funds, Seoul is seeking greater certainty over power demand, investment terms and the project’s profitability.
A view of the Hanbit Nuclear Power Plant in Jeonnam-Gwangju Special Metropolitan City / Courtesy of Korea Hydro & Nuclear Power
The Alaska liquefied natural gas project has also resurfaced as a possible component of the investment package after fading from earlier discussions, although questions over the project's large upfront infrastructure costs and long-term profitability linger.
International trade professor Kim Tae-hwang of Myongji University said the continued delay suggested the negotiations may involve issues beyond individual investment projects.
“It seems that a tug-of-war is taking place, with broader Korea-U.S. trade negotiations and security issues intertwined with the strategic investment talks,” he said.
Another issue is the timing of the initial payment. The U.S. side has reportedly sought about $10 billion to be transferred by the end of the year, roughly half of the $20 billion annual investment limit. That would be well above the roughly $2.2 billion that Seoul had earlier considered transferring this year.
The Industry Ministry said it remains in close consultations with Washington and that it needs more time to find common ground.
“We are continuing to discuss the remaining issues, and it is taking some time to narrow down the points of contention,” the ministry’s official said. “As negotiations approach the final stage, it is natural for things to become more difficult.”