Ahead of the Korea-US High-Level Economic Talks, Pre-Meeting Focuses on IRA Discussions

Korea-US Diplomatic Authorities Hold Director-General Level Pre-Meeting on 1st
Review Agenda Including Supply Chain, Technology Cooperation, and Infrastructure

Preliminary Director-General Level Meeting for the 7th Korea-US High-Level Economic Consultations held on the 1st [Photo by Ministry of Foreign Affairs]

[Asia Economy Reporter Jang Hee-jun] The diplomatic authorities of South Korea and the United States held a director-level preliminary meeting ahead of the Senior Economic Dialogue (SED) scheduled for mid-month. Attention is focused on what discussions will take place regarding the electric vehicle tax credit provisions in the Inflation Reduction Act (IRA), which contain unfavorable terms for Korean automobile companies.

According to the Ministry of Foreign Affairs, on the morning of the 1st, Lee Mi-yeon, Director General of the Bilateral Economic Diplomacy Bureau at the Ministry of Foreign Affairs, held a virtual director-level preliminary meeting with Tony Fernandez, Deputy Assistant Secretary for Trade Policy Negotiations at the U.S. Department of State, to prepare for the 7th SED.

Both sides reviewed the overall agenda of the SED, including supply chains, protection of sensitive technologies, science, health, and technology cooperation, development cooperation, and infrastructure, and discussed ways to achieve tangible outcomes.

The SED is a regular consultation channel for discussing comprehensive economic partnerships between the diplomatic authorities of the two countries. It was agreed upon at the 2015 South Korea-U.S. summit and has been held six times so far. The 7th SED is scheduled to be held in mid-month in Washington DC, with Lee Do-hoon, Vice Minister of Foreign Affairs of South Korea, and Jose Fernandez, U.S. Deputy Secretary of State for Economic Affairs, serving as chief representatives.

In particular, since the meeting will take place after the U.S. midterm elections between the deputy foreign ministers responsible for economic affairs of both countries, attention is focused on what discussions will be held regarding the Inflation Reduction Act (IRA), which contains unfavorable provisions for Korean automobile companies. The key issue is expected to be the electric vehicle tax credit regulations within the act.

Meanwhile, Jake Sullivan, U.S. National Security Advisor at the White House, stated in an online keynote speech at the 'JoongAng Ilbo-CSIS Forum 2022' held on the same day that regarding the discrimination issue against Korean electric vehicles under the IRA, "We are deeply considering it because Korea has clearly expressed its concerns," and added, "We will continue discussions until a 'win-win' outcome is achieved for all."