EU Expects Compromise on US Inflation Reduction Act Controversy

[Photo by Xinhua News Agency]

[Asia Economy Reporter Park Byung-hee] The European Union (EU) has repeatedly expressed its expectation that a 'compromise' will be reached regarding the controversy over the United States' Inflation Reduction Act (IRA). The IRA has sparked discrimination debates by explicitly granting eco-friendly tax credit benefits only to North American electric vehicles.

According to major foreign media on the 8th (local time), Zbyn?k Stanjura, the Czech Finance Minister and current EU rotating presidency holder, said at a press conference after the EU Economic and Financial Affairs Council meeting held in Brussels, Belgium, "We expect that upcoming negotiations between the EU Commission and the United States will produce a compromise acceptable to both sides."

He stated that the first topic of the council meeting was the U.S. IRA, explaining, "We recognize the possibility that the IRA could negatively impact EU companies and investors, especially in the technology sector." He added, "No one wants a trade war between the U.S. and the EU to begin, but we must maintain a level playing field for fair competition in international trade."

Earlier, the EU Commission demanded that the U.S. treat North American products (Canada and Mexico), which are designated as beneficiaries under the IRA, equally, arguing that many tax benefit provisions stipulated by the U.S. IRA constitute discriminatory measures.

To resolve the electric vehicle subsidy issue through negotiations, a task force (TF) was formed, and the first negotiation took place on the 4th.

Valdis Dombrovskis, EU Commissioner for Trade, who attended the press conference, responded "Yes" when asked if the compromise the EU desires means treatment equal to that of Mexico and Canada. Commissioner Dombrovskis said, "That is ultimately what we are pursuing, and through this, the U.S. should be a close ally in a position similar to Mexico and Canada."