KITA News
  • The prospects of scrapping or revising the IRA are remote due to the U.S. midterm elections results
    2022-11-28 hit 1165

    KITA analyzed the prospects of scrapping or revising the IRA are remote due to the U.S. midterm elections results favorable for the Democrats


    The Global Trade Forum recommended the need for close monitoring to check whether similar legislations akin to the IRA are proposed in the future

     

    The Korea International Trade Association (Chairman: Christopher Koo) analyzed that the U.S. midterm elections results favorable for the Democrats will lead to a bleaker prospect of revising the Inflation Reduction Act (IRA) or scrapping the Act altogether. During the first Global Trade Forum organized and hosted by KITA on November 16th, which was held in a live video conference format by connecting KITA Centers in the U.S. and the KITA Brussels Center in the EU, Marnki Jeong, the Vice Chairman of KITA stated, “The existing policy direction aimed at countering the influence of China will persist as the U.S. midterm elections results turned out to be a win for the Democrats.” Vice President Jeong advised, “It is imperative to closely monitor whether new legislations will be proposed in the future as concerns are mounting over the possibility of the U.S. introducing new schemes akin to the IRA that favor U.S.-made products.”


    He added, “The possibility of scrapping the IRA or making an extensive revision to the Act dwindled.” However, Vice Chairman Jeong stressed, “As the EU and Japan are also expressing concerns over the implementation of the IRA, we should bolster our efforts to engage in outreach activities to interact with members of the U.S. Congress and the U.S. government and persuade them to pay more attention to our concerns.”


    Hyeon-jeong Je, the Head of the KITA Washington D.C. Center, also mentioned, “As the Democrats will retain majority control of the U.S. Senate, attempts to materialize a move to revise of the IRA will be much less likely.” She recommended, “Outreach activities should be expanded to cover not only the Department of Treasury but also other agencies, including the Department of Commerce, the United States Trade Representative (USTR) and U.S. Customs and Border Protection” and added, “Utmost effort should be invested to ensure Korean companies’ interests are reflected in the IRA rules.”


    Binna Cho, the Head of the KITA Brussels Center, informed that the EU and the U.S. have recently formed an “IRA Taskforce” in October and the two parties have been engaging in discussions on existing rules that are relevant to providing EV subsidies ever since. She added that the U.S. and the EU are likely to reach a compromise deal during the U.S. ? EU Trade and Technology Council (TTC), which is scheduled to be held next month. The EU expressed their concerns over guidelines specified in the IRA on providing subsidies. The EU accused that having such guidelines in place is equivalent to offering local content subsidies, which is a violation of World Trade Organization (WTO) principles that may hamper multilateral trade. In response, the EU has introduced a countermeasure known as the “Buy European Act”, which centers on providing subsidies for EU-made automobiles.


    Soon-nam Jeong, the Vice President of the Korea Battery Industry Association, also participated in the forum and stressed the need for the U.S. to show flexibility on the group of countries from which the U.S. can source core minerals in accordance with the IRA. He emphasized that the scope of countries recognized in the IRA as partner countries should not be limited to the U.S. and its free trade agreement partners, and should be expanded to add member nations of the Indo-Pacific Economic Framework (IPEF).


    [This news is provided by Newsis]

    List
    Prev
    KITA hosts Korea-Canada Business Roundtable
    Next
    The Ministry of Agriculture, Food and Rural Affairs and aT participated in Food Expo Qazaqstan
KITA
Family Site