Government Discusses IRA with Germany... Accelerating Joint Response on Electric Vehicles

Ministry of Trade, Industry and Energy Holds the 2nd Korea-Germany Industrial Cooperation Dialogue

President Biden of the United States Taking Photos with Citizens at the 'Inflation Reduction Act' Legislation Event
(Washington DC Reuters=Yonhap News) On the 13th (local time), U.S. President Joe Biden is taking photos with citizens at the 'Inflation Reduction Act' (IRA) legislation commemoration event held at the White House in Washington DC. The IRA is a bill signed by President Biden last month to control soaring prices. 2022.9.14
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[Asia Economy Sejong=Reporter Lee Jun-hyung] The government discussed countermeasures against the Inflation Reduction Act (IRA) with Germany, a ‘global automotive powerhouse.’ It is analyzed that both countries are accelerating cooperation to respond to the IRA.

The Ministry of Trade, Industry and Energy announced that Joo Young-joon, Director General of Industrial Policy, held the ‘2nd Korea-Germany Industrial Cooperation Dialogue’ with the German Federal Ministry for Economic Affairs and Climate Action at the Korea Chamber of Commerce and Industry in Seoul on the morning of the 30th. The meeting was attended by Director General Joo, the Director of Industrial Policy at the German Federal Ministry for Economic Affairs and Climate Action, and the Deputy Ambassador of the German Embassy in Korea. Both sides discussed major industrial issues such as the IRA, supply chain crises, and decarbonization.

The main topic of discussion was the Inflation Reduction Act. The IRA is a law that stipulates that only electric vehicles finally assembled in North America, including the United States, are eligible for subsidies. Korea and Germany are major automobile manufacturing countries with production volumes of 3.46 million and 3.35 million units respectively last year, and both have high export dependence on the U.S. Accordingly, both sides shared difficulties faced by their domestic industries due to the IRA and sought joint countermeasures.

The government is not only cooperating with Germany to respond to the IRA. Recently, the government has initiated working-level consultations with four countries?Germany, the United Kingdom, Japan, and Sweden?for joint responses to the IRA. Although specific cooperation measures have not yet been decided, it is reported that all five countries share the view that the IRA violates international trade norms such as the World Trade Organization (WTO) Most-Favored-Nation treatment. The Ministry of Foreign Affairs stated, “We will continue working-level consultations on the IRA with countries holding similar positions such as Europe and Japan,” and added, “We can meet frequently in the future.”

Congratulatory Speech by Ju Young-jun, Director of Industrial Policy Office
(Seoul=Yonhap News) Ju Young-jun, Director of the Industrial Policy Office at the Ministry of Trade, Industry and Energy, is delivering a congratulatory speech at the 19th Shipbuilding and Marine Day ceremony held at Grace Hall, L Tower, Yangjae-dong, Seoul, on the afternoon of the 15th. 2022.9.15 [Provided by Ministry of Trade, Industry and Energy. Redistribution and DB reproduction prohibited]
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The Ministry of Trade, Industry and Energy also discussed supply chain cooperation with Germany. The ministry introduced Korea’s experience in responding to supply chain crises such as the shortage of automotive semiconductors and unstable supply of urea solution. Furthermore, the ministry emphasized the need to strengthen technological cooperation between the two countries, focusing on the Korea-Germany Technology Cooperation Center and international joint technology development.

Cooperation for carbon neutrality was also on the discussion table. The ministry expressed concerns that the recent expansion of environmental regulations such as carbon border adjustment mechanisms in major countries could lead to protectionism. Therefore, it emphasized the need to gather opinions from related countries when introducing environmental regulations.

Director General Joo said, “The current global complex crisis facing the economies of Korea and Germany is a problem that cannot be solved by the efforts of a single country alone,” adding, “However, if both countries actively cooperate, we will be able to find countermeasures.” He further stated, “I hope that the government-level discussions between Korea and Germany will develop into cooperation between companies.”