Industry minister calls for US' measure to address concerns over inflation law

Industry Minister Lee Chang-yang, right, stands next to U.S. Ambassador to Korea Philip Seth Goldberg at the government complex in central Seoul, Wednesday. Courtesy of Ministry of Trade, Industry and Energy

Korea's Industry Minister Lee Chang-yang met with U.S. Ambassador to Seoul Philip Goldberg, Wednesday, and called for measures to swiftly address concerns over a new U.S. law that excludes electric vehicles (EVs) assembled outside North America from tax incentives, Lee's office said.

The Inflation Reduction Law (IRA), signed by U.S. President Joe Biden earlier this month, calls for the expansion of tax subsidies for EV purchases, but only for those assembled in North America.

Concerns over its discriminatory nature have mounted in Korea, as its carmakers, including Hyundai Motor and Kia, assemble their flagship EV models at domestic plants and ship them overseas.

During the meeting, Lee delivered concerns from Korea's government and industry, and asked for active bilateral consultations to resolve the issue.

"The bilateral economic ties, particularly in terms of supply chains and advanced technology fields, have deepened, and South Korean firms have made huge investments in the U.S., but such discriminatory measures are feared to have adverse impacts," Lee told the U.S. envoy.

He also noted this law could be in violation of international trade norms. The Korean government has said the IRA runs against the Korea-U.S. Free Trade Agreement and World Trade Organization rules.

"The two nations could find solutions through in-depth discussions," Lee said, adding he is planning to visit the U.S. next month for talks with officials there on the matter.

Industry Minister Lee Chang-yang, far right, talks with U.S. Ambassador to Korea Philip Goldberg, far left, at the government complex in central Seoul, Wednesday. Courtesy of Ministry of Trade, Industry and Energy

Korea sent a government delegation to the U.S. earlier this week, and Trade Chief Ahn Duk-geun is scheduled to visit the U.S. next week.

It is not immediately known what the U.S. ambassador said during Wednesday's meeting.

On Monday, Goldberg said the law is meant to deal with climate change issues, and to promote the use of EVs and batteries, and is not aimed at South Korea, adding that the U.S. will "try all we can to overcome any differences."

On Tuesday (Washington time), the office of the U.S. Trade Representative said the two nations agreed to "keep in close contact on this issue over the coming weeks." (Yonhap)