Korean delegation proposes ‘joint consultative channel’ to U.S.

The South Korean government has sent a delegation to the U.S. to discuss its concerns over the U.S. Inflation Reduction Act (IRA), which excludes electric vehicles (EVs) assembled in South Korea from the subsidy list. The delegation announced that it proposed a joint consultative channel between related government agencies of both countries to the Biden administration.

“We made a suggestion to come up with a joint consultative channel as this issue involves several ministries,” Ahn Sung-il, head of the New Trade Order Strategic Bureau of the Ministry of Trade, said to the press on Wednesday on his way back after his three-day visit to Washington. The IRA, a bill including a provision that discriminates against EVs manufactured in South Korea, has recently passed the U.S. Senate.

The Korean delegation’s proposal to build a channel with all related agencies involved, such as the U.S. Trade Representative (USTR), Departments of Treasury, Commerce and Foreign Affairs, was made out of concerns that the act violates the Korea-U.S. Free Trade Agreement and is related to tax incentives.

Ahn also mentioned the U.S.’ positive response to his suggestion, saying, “Trade Minister Ahn Duk-geun’s visit to the U.S. in early September will open up the discussions for the details on creating the joint channel.”

Ahn gave a particular meaning to the White House officials who unexpectedly showed up during his visit to the USTR. “This shows that the White House is taking this issue seriously,” he said. ”The officials said that the U.S. considers South Korea an important ally and they are ready to put heads together with South Korea.”

However, many predict that it is unlikely for the Biden administration to come up with a solution that satisfies the Korean side within a short period. “The U.S. side may need to work further on it, as the act itself falls under the legislative body and it has not been long since it passed,” said Ahn. “It will take more time.”


weappon@donga.com