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Trade Minister convenes emergency Trade Committee regarding IRA 2022-08-30

Trade Minister Ahn Duk-geun presided an emergency meeting of the Korea Trade Committee on August 30 at the Korea Chamber of Commerce and Industry (KCCI) to discuss measures in response to the recently passed U.S.’ Inflation Reduction Act (IRA).

With respect to IRA, the Ministry has been actively communicating with the U.S. through industrial and ministerial channels so as to prevent Korea’s domestic EV industry bleeding from unfair competition in the U.S. market, including high- and working-level talks with the U.S. Trade Representative and Secretary of State as well as letters addressed to Congress and the Biden Administration.

As the situation for potential damage on domestic industries is quite critical, MOTIE will be engaging in full measure in the future, with the Trade Minister leading the pan-ministerial Countermeasure Task Force, and communicating continuously with industry sectors.

Moreover, considering the U.S. situation regarding IRA, the Ministry will also pursue international cooperation efforts while seeking strategic negotiations with the U.S. Congress and Administration.

In his opening remarks, Trade Minister Ahn emphasized the following three key points.

One, it is imperative to form a Korea-U.S. bilateral consultative mechanism to discuss bilateral EV subsidy programs. To this end, it is also possible to utilize the already existing supply chain and commercial dialogue (SCCD) channel between MOTIE and U.S. Department of Commerce (DoC).

The utmost priority is to reach an agreement between the two countries, but if necessary, dispute settlement procedures are another option.

High-tech, supply chain, AI, quantum technology, bio health, nuclear reactors, renewable energy are some of the various areas in which Korea and the U.S. are cooperating, and those bilateral economic and commercial cooperation ties will proceed as is.

Two, the Ministry will also pursue international cooperation with other countries on this matter.

The U.S.’ measures on EV subsidies affect not only Korea, but also Germany, Japan and the rest of the automobile industry. Therefore, Korea will also seek multilateral collaboration with countries in similar positions if necessary.

Three, measures will be taken in a pan-ministerial, “one team” manner.

Relevant ministries have kept working closely together, and the recent Government delegation sent to the U.S. consisted of not only MOTIE but the Ministry of Economy and Finance (MOEF) and the Ministry of Foreign Affairs (MOFA) as well.

The following week, the Countermeasure Task Force headed by the Trade Minister will be visiting the U.S. to meet with U.S. Trade Representative Katherine Tai and Congress members for further talks.