Biden Ends LG and SK Battery Dispute [Correspondent Diary]

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] U.S. President Joe Biden has escaped a 'deadlock.' He has relieved the burden that was difficult to resolve or ignore regarding Georgia, which has emerged as the 'eye of the storm' in U.S. politics. This also created an opportunity for the Korean battery industry and the U.S. electric vehicle industry to move forward 'together' out of confusion.

On the 10th (local time), U.S. media including Bloomberg reported that LG Energy Solution and SK Innovation reached a settlement in their battery dispute.

The dramatic agreement came just one day before President Biden’s deadline to veto the U.S. International Trade Commission (ITC)’s 10-year import ban on SK Innovation batteries, which was decided due to technology infringement against LG Energy Solution.

Although the agreement was between the two companies, it is known that the U.S. government exerted active pressure behind the scenes. This issue was a significant burden for the U.S. government.

President Biden avoided many crises with this agreement.

First, he protected the jobs of Georgia voters who supported him. The battery plant SK Innovation is building in Georgia is expected to employ 2,600 people. This is a gift to those who delivered Georgia’s presidential election victory to President Biden.

Raphael Warnock, U.S. Senator from Georgia who played a decisive role in securing the Democratic majority in the Senate, even pressured President Biden’s decision, emphasizing the need to operate the SK Innovation plant.

Second, while protecting the aspirations of Georgia residents, he did not break his promises.

Intellectual property rights are a core asset that the Biden administration must protect to maintain the U.S.’s technological competitive edge. If the president overturned the decision on intellectual property rights, it could have lost the justification to block China’s attempts to steal U.S. intellectual property.

Third, it is noteworthy that both LG and SK lobbied the Biden administration from their respective perspectives.

President Biden served as a senator for 36 years, meaning he has many connections with congressional figures.

The progressive faction within the Democratic Party has been wary that many of these figures might act as lobbyists.

According to sources in Washington politics, both LG and SK mobilized personnel close to the Biden administration and law firms to launch lobbying offensives.

If President Biden had exercised his veto on the ITC decision under the influence of lobbyists while embracing progressive agendas such as big government and large-scale fiscal spending, he could have faced criticism from the progressive camp for violating principles.

The fourth achievement is that he escaped pressure from the 'thorn in the side,' Georgia Governor Brian Kemp. Kemp has recently emerged as President Biden’s strongest political adversary.

On the 25th of last month, Georgia’s Republican-led state legislature passed a bill tightening voter participation by strengthening ID requirements for mail absentee voting and shortening absentee ballot application deadlines. Governor Kemp signed this bill.

President Biden and the Democratic side strongly opposed this issue, which made it harder for Black and Latino residents?their electoral base?to vote, but they could not stop the Republican-controlled state legislature and government.

In this situation, if President Biden had vetoed the ITC’s import ban decision against SK Innovation, it could have been seen as supporting Governor Kemp’s position, who had demanded the veto three times.

Fifth, President Biden protected the U.S. manufacturing crisis and secured the stability of infrastructure for fostering the electric vehicle industry.

This agreement was made between Korean companies. No American companies will be harmed. Rather, it laid the foundation to get ahead in competition with China in the electric vehicle sector, which is a focus of President Biden’s concentrated development efforts.

This is also welcome news for Korea. Thanks to the 'obvious hand' of Biden, a conflict that could have remained a long-term problem has ended.

Even if there was mediation, the agreement was made between Korean companies. Further conflict is meaningless. Although the path was longer instead of straightforward, now only the task remains for 'K-Battery' to strive to lead the global electric vehicle industry’s development.