▲ Deok-geun Ahn, Head of Trade and Negotiation Headquarters
The governments of the Republic of Korea and the United States have decided to establish a separate consultation channel to resolve the issue of discrimination against Korean electric vehicles, which were excluded from subsidies due to the enforcement of the US Inflation Reduction Act.
Ahn Deok-geun, head of trade negotiations, U.S. Trade Representative Catherine Ty, and USTR representative met yesterday (7th) local time in Washington DC in Washington, DC, both sides announced that they had reached an agreement.
Director Ahn met with reporters after the interview and said, "We have decided to (agree) the formation of a bilateral consultative body with the USTR today and start specific discussions on it.
The USTR also said in a press release that "the two sides agreed to open an engagement channel on this issue."
The consultative body, which is expected to be led by trade representatives from both countries, is a separate channel for intensive discussion of electric vehicle issues.
In particular, it is expected that the two governments will become a cross-ministerial consultative body in which other ministries related to electric vehicle issues will also participate in addition to the trade sector.
The decision of the US to establish a separate consultation channel in addition to the existing intergovernmental communication channel is evaluated to show the US government's interest in this issue.
In this regard, the USTR said, "We have listened to South Korea's concerns about the provision of electric vehicles under the Inflation Reduction Act," USTR said.
Earlier, Brian Diss, chairman of the National Economic Committee of the White House, also met with Ahn the day before and said, "I fully understand the seriousness of this issue is not limited to Hyundai Motors, but is related to trust in the economic and trade relations between the two countries."
Such a reaction from the US side, some even say that the US has been 'hit in the back' and the need to sue the World Trade Organization and the WTO. It is considered to be taken into account.
In this regard, when asked if Tai acknowledged that discrimination against Korean electric vehicles under the Inflation Reduction Act was legally problematic, Ahn said, "The US side fully acknowledges the seriousness of this issue."
He added, "If you look at the awareness of the problem of agreeing to form a consultative body and trying to solve it, (the US side) seems to agree that there is a legal problem, but there was no specific mention."
The two sides agreed to further discuss the composition of the consultation channel and specific agenda for discussion.
Regarding the future meeting schedule, Ahn said, "I plan to meet with the Thai representative next week and next week (due to the ASEAN-related economic ministers meeting, etc.)," said Ahn.
"In addition to discussing with me, we also decided to discuss the schedule in the working group as soon as possible."
Regarding the timing of the launch of the bilateral consultative body, Ahn said, "It is not easy to tell right now when the actual timing will be because we are more prepared and the United States now has procedures to discuss with various ministries."
When the electric vehicle consultative body between South Korea and the United States is activated, both sides are expected to intensively check whether there are measures that the US government can take to mitigate damage in addition to amendments to the law.
Earlier, White House National Security Council Strategic Communications Coordinator John Kirby said on the previous day on the issue of discrimination against Korean electric vehicles, "We will be able to come up with more detailed information as we enact domestic rules (for the implementation of the IRA) over the next few months."
In this regard, Director Ahn approached cautiously, saying, "There are many promising alternatives in the industry, but there are also a lot of legally difficult stories." .
He added, "As the two governments continue to discuss with each other with several alternatives, I think it may be necessary to discuss whether it can actually be implemented in the United States, centered on the National Economic Committee, even within the United States government."
He also emphasized, "The government has content that can be proposed through various legal reviews," he said.
However, despite the formation of a separate consultative body between the two governments, the provision of subsidies for electric vehicles is explicitly stipulated in the Inflation Reduction Act.
The point is that there is not much room for the US government to move without amending the law due to the legislative intent and regulations of Congress to subsidize electric vehicles produced in the United States.
However, South Korea and the United States have not been able to come up with a sharp solution to the US Congressional response.
In particular, it is pointed out that it is difficult to expect this issue to be resolved in a short period of time as the US Congress is about to hold a midterm election in November, a 'lame duck session' continues after the election, and a new session begins early next year.
It is reported that the government plans to ask the US government to convey our concerns to Congress and to mention the need to revise the law when the consultation channel is activated.
(Photo = Washington Correspondent Joint Reporting Group, Yonhap News)