Minister Lee Chang-yang: "US Inflation Reduction Act Likely Violates FTA"

Minister Lee Chang-yang of the Ministry of Trade, Industry and Energy is speaking at the industry meeting on the U.S. Semiconductor and Electric Vehicle Support Act held on the 25th at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul. Photo by Moon Ho-nam munonam@

[Asia Economy Sejong=Reporter Dongwoo Lee] Lee Chang-yang, Minister of Trade, Industry and Energy, stated on the 29th that the United States' Inflation Reduction Act (IRA), which excluded Korean-made vehicles from electric vehicle subsidy support, is highly likely to violate the Korea-US Free Trade Agreement (FTA) and World Trade Organization (WTO) regulations.

On the same day, at the National Assembly's Industry, Trade, Small and Medium Enterprises Committee, in response to a question from Kim Han-jung of the Democratic Party asking whether the IRA violated the Korea-US FTA or WTO regulations, Minister Lee said, "There is a high possibility of violation, and if necessary, we will proceed with WTO litigation procedures."

He added, "According to the Korea-US FTA regulations, one must choose either the Korea-US FTA or WTO procedures to raise an issue," and explained, "We need to carefully compare the two, but if we go to the WTO, there is an aspect where cooperation with countries like Japan and the EU, which share the same position, is possible."

Deputy Minister Ahn Deok-geun, head of the Ministry of Trade, Industry and Energy's Trade Negotiations Bureau, also said, "The possibility of the IRA violating the Korea-US FTA is very high," and stated, "When I visit the US this month, I will meet with the USTR (United States Trade Representative), the Department of Commerce, the White House, and members of Congress." Deputy Minister Ahn added, "The IRA is related to industries including electric vehicles, batteries, solar power, and renewable energy businesses, so we are exploring various measures."

The National Assembly's Industry, Trade, and SMEs Committee is preparing a resolution at the parliamentary level to improve the IRA.

Regarding a question about whether the Indo-Pacific Economic Framework (IPEF), led by the US, would require National Assembly ratification if it deals with trade norms, Deputy Minister Ahn said, "It depends on the content level, but if it is binding and requires National Assembly reporting and ratification procedures, we will do so."

The Ministry of Trade, Industry and Energy also officially reported the plan to promote IPEF negotiations. In response to a question about the criticism that IPEF is aimed at excluding China, Deputy Minister Ahn predicted, "Most IPEF participating countries have large trade volumes with China, so it will not include content that excludes China."

Minister Lee also said, "About 10 participating countries consider China a major export market, so I believe it is impossible for IPEF to exclude China."

This content was produced with the assistance of AI translation services.