The EU and South Korea should cooperate in responding to the US Inflation Reduction Act (IRA), the country’s trade minister, Dukgyeong Ahn, told Euractiv.
“There is huge room for the EU and Korea to work together to make the provisions (of the IRA law) more WTO-compatible and not cause unnecessary problems to strategically important parts of our industry,” Ahn said.
He said Seoul and Brussels could work with the US administration to minimise the “discriminatory impact” of the law. The official admitted, however, that getting the IRA changed in the short term could be very challenging.
“In case it becomes obvious that they cannot do anything or if they show no willingness to work with us to find the right solution, we will have to find another alternative,” the minister stressed.
Ahn also opposed the adoption of similar protectionist measures in the EU, comparing such a move to “opening a Pandora’s box”.
The law, signed by US President Joe Biden in August, would notably extend tax subsidies for the purchase of electric cars that are assembled in North America. The document, which the administration calls the “Inflation Reduction Act”, contains a clause allocating $370 billion for clean energy and climate goals, $64 billion for lowering the cost of drugs and health insurance.
The EU has called the act discrimination against goods imported from other countries. French President Emmanuel Macron has previously openly expressed dissatisfaction with the stimulus measures against US manufacturers. According to the French leader, the law contradicts WTO norms and is “unfriendly”.
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