Government: "French version of IRA unfavorable to distant export countries... Concerns over WTO incompatibility"

The Korean government has delivered an official opinion letter to the French government stating concerns that France's electric vehicle subsidy reform plan is designed disadvantageously for vehicles exported from distant countries to the European Union (EU), potentially violating trade rules such as those of the World Trade Organization (WTO).

On the 6th, an official from the Ministry of Trade, Industry and Energy (MOTIE) said, "Regarding the French electric vehicle subsidy reform plan announced at the end of July, MOTIE delivered an official opinion letter containing these concerns to the French side on the 25th."

Earlier, on July 28, the French government unveiled a subsidy reform plan for electric vehicles that incorporates the carbon emissions (carbon footprint) generated during the production process as a criterion for subsidy eligibility.

Following the release of the draft reform plan, MOTIE has been closely reviewing key points with industry stakeholders, including ▲ compliance with trade rules such as the WTO agreements and the Korea-EU Free Trade Agreement (FTA), ▲ the carbon emission factor standards, calculation methods, and basis, and ▲ the extent of burden on companies.

An MOTIE official stated, "France plans to announce the final electric vehicle subsidy reform plan within this month and implement it in early January next year," adding, "We will continue to make efforts to ensure that our position is reflected as much as possible in the final plan."

In addition, MOTIE conveyed to Mexico on the 29th of the same month its position that the sudden tariff increase on imports of 392 items including steel, announced in Mexico on the 15th of last month, was an unannounced measure that raises concerns about damage to Korean companies, and that such damage should be minimized.

Jung Dae-jin, Deputy Minister for Trade at MOTIE, said, "The government has successfully responded as one team with industry to protectionist policies such as the U.S. Inflation Reduction Act (IRA) and the CHIPS Act that have continued since last year," and added, "Based on this experience, we will explore various measures to minimize corporate damage and utilize opportunities to expand market access."