S. Korea in preparation for legal disputes with U.S. over IRA

SEOUL, Nov. 3 (Yonhap) -- South Korea has been preparing for legal disputes with the United States over the Inflation Reduction Act (IRA) for its discriminatory features against non-North American carmakers, sources said Thursday.

The IRA, signed into law by U.S. President Joe Biden in August, gives up to US$7,500 in tax credits to buyers of EVs assembled only in North America, sparking concerns that South Korea's Hyundai Motor and Kia Corp. could lose ground in the U.S. market as the two South Korean carmakers make EVs at domestic plants for export to the United States.

The concern has also been shared by some European and other carmakers.

According to the industry sources, South Korea has recently hired a domestic law firm and has been working to select a foreign one in preparation for filing complaints against Washington with the World Trade Organization or the Korea-U.S. Free Trade Agreement (FTA) mechanism, as the law could run afoul of their principles.

Industry Minister Lee Chang-yang said earlier that South Korea will strive to resolve the matter through bilateral talks with the U.S., while reviewing bringing the case to the WTO or FTA mechanisms as "a last resort."

South Korea is supposed to choose either the multilateral dispute settlement system or the bilateral one.

Seoul has been in talks with Washington to reflect its request to the U.S.' envisioned related guidelines, and South Korea is set to provide the U.S. Treasury Department with official input on the IRA this week.

graceoh@yna.co.kr
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