SEOUL (Reuters) -A top South Korean official said on Monday that the U.S. and South Korea had decided to establish a non-binding agreement to define the operation and structure of $350 billion in investment funds agreed as part of a July trade deal.

Seoul agreed with Washington last month on a trade deal to cut U.S. tariffs in exchange for pledging the investments, though differences emerged on how the sides interpreted details of the plan, including how profits would be distributed.

Presidential policy adviser Kim Yong-beom said on Monday the two sides were making progress in reaching an agreement in broad terms during his visit to Washington for the summit between U.S. President Donald Trump and South Korean President Lee Jae Myung.

During his trip, Kim said he had held a separate meeting with U.S. Commerce Secretary Howard Lutnick for two hours.

Kim said that the U.S. hoped to agree a memorandum of understanding (MOU) to oversee the investment plan as soon as possible.

The "financial package" would be used to support strategic industries such as key minerals, batteries, chips, pharmaceuticals, artificial intelligence and quantum computing, Kim said. He reiterated that up to $150 billion had also been earmarked for shipbuilding.

Seoul would create a task force to work on detailed implementation plans, led by the finance ministry and joined by state-funded banks, Kim said.

South Korean officials previously disputed Lutnick's remarks suggesting the U.S. would take 90% of the profits from the investments. Officials in Seoul also said equity investments would account for a small part, while loans and guarantees would make up a majority of the funds.

In July, Trump said South Korea would invest in projects "owned and controlled by the United States" and selected by him.

South Korean officials have said a safety mechanism would be added to reduce financing risk, including U.S. commitments to buy products from the projects and invest in commercially feasible projects.