Lee Jae-myeong: South Korea's blind accommodation in its investment in the US may trigger a financial crisis

South Korean President Lee Jae-myung said that if the South Korean government accepts the current demands of the United States in trade negotiations without safeguard measures, the South Korean economy may fall into a predicament similar to that of the 1997 financial crisis.

Reuters reported on Monday (September 22) that Lee Jae-myung said in an exclusive interview with Reuters that South Korea is striving to reach a tariff agreement with the United States as soon as possible, but there are differences between South Korea and the United States on ensuring the commercial feasibility of the 350 billion US dollars investment project in the United States.

He said, "If there were no currency swap and we withdrew 350 billion US dollars as requested by the United States and invested all of it in cash into the United States, South Korea would face a situation similar to that of the 1997 financial crisis."

Seoul and Washington reached a verbal trade agreement in July. The United States will lower tariffs on South Korean products. In exchange, South Korea promised to invest 350 billion US dollars in the United States and other measures.

South Korea proposed to establish a foreign exchange swap line with the United States to reduce the impact of investment on the South Korean won market, but Lee Jae-myung did not disclose whether the United States might agree or whether it was sufficient to push the agreement forward. He pointed out that South Korea is different from Japan. Tokyo has more than twice the foreign exchange reserves of South Korea and has a dollar swap line.

In response to the incident where the US immigration enforcement agency raided the construction site of the Hyundai Motor and LG Energy Solution joint venture in Georgia earlier this month and detained South Korean employees, Lee Jae-myung said that this incident would not have an impact on the South Korea-US alliance. He believed that it was the result of excessive law enforcement and not deliberately ordered by US President Trump.

In addition, Lee Jae-myung responded in an exclusive interview released by the BBC on the same day regarding the denuclearization of North Korea, saying that as a temporary measure, a nuclear freeze on North Korea is a feasible solution.

He said that if Trump and North Korean leader Kim Jong UN reached an agreement on freezing nuclear weapons, the South Korean side could accept it.

However, he emphasized: "I believe that as long as we do not give up the long-term goal of denuclearization, it will surely be beneficial for North Korea to stop its nuclear and missile research and development."