Baek Byung-yeul is a journalist at The Korea Times focused on cultural content, including films and cultural events in South Korea. You can contact him at baekby@koreatimes.co.kr to share your insights.
Washington agrees to lessen burden on Korean firms investing in US
Lee Chang-yang, left, minister of trade, industry and energy, shakes hands with U.S. Secretary of Commerce Gina Raimondo during the U.S.-Korea Supply Chain and Commercial Dialogue at Willard InterContinental, a hotel in Washington D.C., Thursday (local time). Courtesy of Ministry of Trade, Industry and Energy
By Baek Byung-yeul
Two nations to bolster cooperation on clean energy
By Baek Byung-yeul
South Korea and the United States have agreed to minimize uncertainty and business burdens for Korean companies investing in the U.S. arising from the implementation of the CHIPS Act, according to the Ministry of Trade, Industry and Energy, Friday. The two nations also decided to work closely with Korean companies to address their concerns regarding the Inflation Reduction Act (IRA).
Minister of Trade, Industry and Energy Minister Lee Chang-yang and his counterpart U.S. Secretary of Commerce Gina Raimondo issued a joint declaration at the first U.S.-Korea Supply Chain and Commercial Dialogue in Washington, D.C., held on the occasion of President Yoon Suk Yeol's state visit to the U.S. on Thursday (local time).
The two countries agreed to minimize investment uncertainty and management burdens for companies under the obligations set out in the CHIPS Act, including the conditions for applying for subsidies and the guardrail clause that limits semiconductor production capacity in China for 10 years upon receipt of a subsidy.
Korea and the U.S. will also establish a public and private semiconductor cooperation forum to strengthen ties in the chip industry between the two countries.
Regarding semiconductor export controls, where the U.S. has banned the export of U.S.-made equipment to semiconductor companies in China, they will discuss how to operate export control measures more predictably to minimize supply chain disruptions after the expiration of the one-year blanket license applied to Korean companies in October.
The U.S. has been attempting to limit China's chip technology development through the CHIPS Act but the details of the regulations have raised concerns over Korean companies actively selling their chips in China.
This is because chip companies that receive subsidies in the U.S. are banned from expanding chip production by more than 5 percent for advanced chips and 10 percent for older technology in China for 10 years after receiving the benefits.
On the supply chain for components and materials used in minerals and batteries, as opposed to semiconductors, and on the IRA, a legal entity that addresses the terms of electric vehicle subsidies, the two countries agreed to continue discussions, although there was no agreement to reduce uncertainty and burdens.
“Over the past year, Korea and the U.S. have been closely consulting on key issues such as the implementation of the CHIPS Act and the IRA,” Minister Lee said. “Based on this, the ministry was able to agree with of U.S. Secretary of Commerce Gina Raimondo today on specific directions for cooperation, including minimizing business uncertainty and management burdens and creating a favorable business environment for companies.”
Lee Chang-yang, right, minister of trade, industry and energy, poses with U.S. Secretary of Energy Jennifer Granholm at the latter's office in Washington, D.C., Thursday (local time). Courtesy of Ministry of Trade, Industry and Energy
Minister Lee also had a meeting with U.S. Secretary of Energy Jennifer Granholm on the same day.
The two shared their awareness of the April 26 agreement between the two leaders of the two nations on spreading clean energy and strengthening cooperation on nuclear power and discussed concrete measures to implement it.
“The two ministers agreed on the need for joint cooperation on energy policy to expand carbon-free energy sources such as nuclear, renewable and hydrogen; reduce dependence on fossil fuels; improve energy efficiency in industry, buildings and transportation; and secure energy resource supply chains including key minerals,” the ministry said.
“They also agreed to strengthen bilateral cooperation in policy, technology development, commercialization and dissemination through the Korea-U.S. Energy Policy Dialogue with the goal of supporting decarbonization across the economies of both countries,” the ministry added.
Regarding Westinghouse's intellectual property lawsuit over Korea Hydro & Nuclear Power (KHNP), Minister Lee urged his counterpart to work together to resolve the legal dispute between Korean and American nuclear power companies at the earliest opportunity, the ministry said.
In October, 2022, Westinghouse filed a lawsuit against KHNP for an alleged IP infringement, claiming that KHNP needs its consent and that of the U.S. government to export its nuclear power plant APR1400 as the power plant is developed based on its patented reactor technology.