Martial Arts: "If the Conservative Party Wins the EU Parliamentary Election, It Will Be Good News for K-Battery and Electric Vehicle Companies"

Publication of Major Party Group Pledges and Prospects for the EU Parliament Election
EU Parliament Election from 6th to 9th... Green Deal Relaxation and Strengthened China De-risking

In the European Union (EU) parliamentary elections to be held from the 6th to the 9th (local time), it is anticipated that if the position of conservative parties strengthens, export companies in Korea, such as those in electric vehicles and batteries, will also benefit positively when the next parliament promotes pro-business policies.

Trade Tower, Korea International Trade Association, Samseong-dong, Gangnam-gu, Seoul. [Photo by Korea International Trade Association]

On the 4th, the Brussels branch of the Korea International Trade Association published a report titled "Key Pledges and Prospects by Party Groups Related to the EU Parliamentary Elections," containing this information.

According to the report, due to the ongoing high inflation caused by the Russia-Ukraine war and strong opposition from farmers to the Green Deal, the political orientation in the EU is shifting to the right, and the election results are expected to reflect a conservative tone.

A rightward movement is also detected in the election for the Commission President. Ursula von der Leyen, the incumbent Commission President seeking re-election, is not excluding cooperation with the European Conservatives and Reformists (ECR), a hard-right political group within the EU.

If President von der Leyen aligns with conservative parties, the next Commission’s industrial and trade policies are expected to inevitably incorporate conservative viewpoints. The conservative faction has been skeptical of the Green Deal and has emphasized free corporate management activities.

According to the report, the next Commission and Parliament plan to adjust the pace of the Green Deal considering the burdens on farmers and businesses, and will actively pursue China de-risking to protect key industries within the region. This is expected to have a positive effect on Korean export companies.

With legal frameworks for the Green Deal such as the Carbon Neutral Industry Act and the Critical Raw Materials Act established, the next Commission is expected to focus on law enforcement. Korean companies entering the EU market in battery materials, electric vehicles, heat pumps, and cables are anticipated to benefit.

If the EU adjusts the pace of the Green Deal as expected, the burden on companies is likely to decrease. Recently, the Commission has shown signs of slowing down, such as considering partial exemptions for regulations on perfluoroalkyl substances (PFAS), essential in battery and semiconductor processes.

The Commission is actively utilizing anti-subsidy laws and extraterritorial subsidy regulations against China, which is expected to work favorably for Korean companies competing with Chinese firms.

The policy direction to foster the defense industry is also advantageous for Korea. Mainstream parties are making large-scale investments in the regional defense sector, whose weaknesses were exposed by the Russia-Ukraine war, and emphasize the need to protect the regional defense industry.

Yeoh Jong-wook, head of the Korea International Trade Association’s Brussels branch, said, "Policy interest is needed to enable our companies to participate in the EU’s green and defense industry value chains," adding, "As China de-risking policies are expected to be fully implemented, Korea should solidify its status as an ally of the EU and actively pursue market entry into the EU."