U.S., S. Korea agree to continue discussions on Inflation Reduction Act: USTR

All News 06:14 August 31, 2022

By Byun Duk-kun

WASHINGTON, Aug. 30 (Yonhap) -- The United States and South Korea agreed to continue their discussions on Seoul's concerns over the Inflation Reduction Act, the office of the U.S. Trade Representative (USTR) said Tuesday.

The agreement came in a meeting between Deputy USTR Sarah Bianchi and South Korean Deputy Trade Minister Ahn Sung-il.

"Ambassador Bianchi and Deputy Minister Ahn discussed Korea's concerns with elements of the Inflation Reduction Act (IRA) related to tax credits for electric vehicles and agreed the two sides would keep in close contact on this issue over the coming weeks," the USTR said in a press release.

South Korea has expressed concerns that the new Inflation Reduction Act may place South Korean automakers at a significant disadvantage as it will provide a U.S. government tax credit of up to US$7,500 for electric cars with batteries produced in the U.S.

Seoul believes the new U.S. law may violate the U.S.-South Korea free trade agreement, as well as the principle of the most-favored nation status under World Trade Organization regulations.

South Korean Ambassador to the U.S. Cho Tae-yong on Monday said the U.S. and South Korea agreed to hold government-level discussions on ways to minimize any potential damage from the IRA to South Korean auto exports.

"Ambassador Bianchi and Deputy Minister Ahn highlighted the strength of the U.S.-Korea trade relationship and close partnership on a range of issues to support the security and prosperity of our people and the planet," the USTR said of the Ahn-Bianchi meeting.

"They also discussed cooperation on the Indo-Pacific Economic Partnership (IPEF), in advance of the IPEF Ministerial Meeting set to take place in Los Angeles on September 8-9," it added.

The South Korean official arrived here Monday as part of a government delegation.