South Korea

Korea Herald | English | News | Nov. 28, 2025 | Regulation

South Korea’s ruling Democratic Party has introduced a special bill to implement a $350 billion US investment pledge, aiming to secure a retroactive tariff cut on Korean automobiles and parts from 25 percent to 15 percent starting November 1. The bill, titled “Special Act on Managing Korea-US Strategic Investments,” was submitted to the National Assembly less than two weeks after a joint fact sheet and a memorandum of understanding were signed between South Korea and the US. The legislation establishes frameworks and procedures for strategic investments, including the creation of a Korea-US strategic investment fund and a temporary corporation to manage it.

The bill requires that investments stay within an annual remittance cap of $20 billion out of the $200 billion pledged for US strategic sectors, ensures projects recommended by the US are “commercially reasonable,” and encourages priority for Korean vendors and personnel where possible. The legislation covers both the $200 billion in US strategic sector investments and a $150 billion commitment to the US shipbuilding industry. South Korean economic officials have emphasized the strategic importance of the investment for the country’s future growth and global economic positioning, while the Ministry of Economy and Finance noted the bill eases uncertainty for Korean exporters.

Opposition lawmakers from the People Power Party have criticized the bill for its structural flaws, warning it could place a financial burden on taxpayers due to a provision requiring the government to cover any investment losses. They also challenged the vague standard of “commercially reasonable,” defined by the US Investment Committee’s good faith, and expressed concern over weakened requirements for Korean project management. The opposition is calling for full National Assembly ratification of the US investment plan, citing constitutional provisions requiring legislative consent for treaties imposing significant financial obligations. The ruling party, however, is pushing forward without a set timetable for deliberation, hoping for bipartisan cooperation to pass a more comprehensive bill.

Experts remain divided on whether the US investment arrangement requires legislative ratification. Some argue that ratification could limit South Korea’s negotiating flexibility and that the National Assembly’s role should focus on oversight rather than a binding approval process. The Lee administration has warned that ratifying the memorandum could tie South Korea to unfavorable clauses, such as the revenue-sharing formula with the US, potentially undermining the country’s interests.

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ZD Net Korea | Local Language | News | Nov. 28, 2025 | Regulation

Budget phone companies in South Korea continue to face significant financial challenges, exacerbated by the increasing burden of spectrum usage fees. The Korea Association of Budget Phone Operators revealed that while budget operators started bearing 20% of these fees in 2025, this share is set to rise to 50% in 2026 and 100% in 2027. Even without paying these fees in 2024, budget operators posted a 1.5% deficit, which is expected to widen to 3.9% annually once full spectrum fees are imposed.

The survival of budget phone companies is threatened as institutional support diminishes and the business environment remains loss-making. These companies generate less than half the revenue per subscriber compared to the three major carriers, making profitability comparisons difficult. Additionally, the revenue-sharing model for wholesale rates results in a duplicated financial burden since fees paid to carriers include spectrum usage fees, placing further strain on budget operators.

Compounding these issues is the shift in wholesale rate negotiations from an ex-ante to an ex-post regulatory system starting in 2025, which disadvantages budget operators due to their weaker bargaining power compared to major carriers. This shift, along with intensifying price competition and the dominance of major carriers, raises concerns about the sustainability of competitive policies in the telecommunications market.

Joongang Ilbo | English | News | Nov. 28, 2025 | Regulation

Lotte Chemical and HD Hyundai Chemical have submitted South Korea’s first voluntary restructuring plan in the oversupplied petrochemical sector for approval by the Ministry of Trade, Industry and Energy. The plan proposes reducing naphtha cracker capacity (NCC) at their Daesan complexes and is filed under the Special Act on the Corporate Revitalization, known as the “One-shot Act,” which facilitates streamlined business reorganizations such as mergers and spin-offs.

The restructuring involves Lotte Chemical spinning off its Daesan plant to create a new entity that will merge with HD Hyundai Chemical, a joint venture owned 60% by HD Hyundai Oilbank and 40% by Lotte Chemical. This merger aims to rationalize NCC operations and unify production, combining Lotte Chemical’s annual NCC capacity of 1.1 million tons with HD Hyundai Chemical’s 850,000 tons.

Lotte Chemical emphasized that the plan seeks to enhance competitiveness in the petrochemical industry while transitioning toward high-value and environmentally friendly business models. The companies will continue to negotiate the optimal operational setup after receiving government approval.