Industry Minister Kim Jung-kwan and US Commerce Secretary Howard Lutnick have held two rounds of virtual talks since last weekend, government sources said Tuesday, as the two countries try to narrow differences over the implementation of Seoul's $350 billion investment pledge under a trade framework agreed in July.
Since returning from a trip to Washington last week, Kim has continued discussions with his US counterpart in an effort to reach a compromise, but sources familiar with the talks said prospects for a major breakthrough remain slim.
The two countries reached a framework trade deal in late July, under which Seoul has committed to investing $350 billion in the US, among other pledges, in return for Washington's agreement to lower its "reciprocal" tariff and sector-specific duty on South Korean autos to 15 percent from 25 percent.
But the deal has yet to go into force amid negotiations to narrow gaps over a set of sticking points, including how to fund the investment package.
Initially, Seoul had planned to make only a small portion, less than 5 percent, in direct cash investment, with the bulk of the pledge backed by guarantees. Meanwhile, Washington had reportedly insisted on a cash-heavy approach, citing precedents, such as its agreement with Tokyo.
As the talks progressed, the two sides have reportedly sought a middle ground amid the deadlock.
However, Washington reportedly continues to request a cash investment of $25 billion annually over eight years, totaling $200 billion. South Korea has reportedly offered a cash investment of $7 billion per year over 10 years, amounting to $70 billion in total. (Yonhap)
