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| Ahn Duk-geun, left, minister for trade, poses with U.S. Trade Representative Katherine Tai ahead of their talks in Bali, Indonesia, Sept. 23. Ahh left for Washington, D.C., Sunday with government officials and lawmakers to meet their U.S. counterparts to consult on the U.S. Inflation Reduction Act. Courtesy of Ministry of Trade, Industry and Energy. |
By Baek Byung-yeul
Government officials and a delegation from the National Assembly left for Washington, D.C. Sunday to deliver their opinions to their counterparts about the U.S. Inflation Reduction Act (IRA), which has become a risk factor for Korean companies selling their batteries and electric vehicles (EVs) in the U.S.
The Ministry of Trade, Industry and Energy said Trade Minister Ahn Duk-geun and a group of lawmakers including Youn Kwan-suk, a lawmaker of the main opposition Democratic Party of Korea (DPK) and chairman of the National Assembly's Trade, Industry, Energy, SMEs, and Startups Committee will visit the U.S. capital for five days from Monday to Friday to discuss the IRA-related matters with key figures of the U.S. administration and Congress.
The ministry said their priority in Washington, D.C., is to persuade U.S. officials in the administration and Congress that the IRA needs to be revised and urge them to reflect the opinions of the Korean government and companies.
The IRA became law in August. Under the new law, consumers who purchase EVs assembled or manufactured outside North America are unable to qualify for a tax credit of $7,500. The application of the law will be extended to battery makers next year.
From 2023, the IRA will also require EVs qualifying for the tax credit to use critical battery materials sourced from the U.S. or countries with which it has free trade agreements. Also, components of the EV batteries need to be manufactured or assembled in North America.
The U.S. Senate and the House of Representatives have proposed amendments to the IRA respectively as the proposals aim to suspend the EV tax credit requirement for three years.
"During their visit, Trade Minister Ahn will meet with U.S. Trade Representative Katherine Tai, John Podesta, senior advisor to President Joe Biden for clean energy innovation and implementation and other officials. During the meetings, Ahn will suggest them to enact sub-regulations of the IRA," the trade ministry said.
The government has continued to consult with the U.S. on the IRA through working-level channels. It also submitted its opinions to the U.S. administration twice on Nov. 4 and Dec. 3 that include proposals to set specific standards such as easing requirements for final assembly of EVs, specifying the requirement for minerals and parts needed for batteries and expanding the use of commercial EVs.
The government has said it would support domestic companies exporting eco-friendly cars for commercial purposes to the U.S., as commercial vehicles assembled outside North America are still eligible for tax credits.
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