Kim Seong-hwan "12 Trillion Won Loss in US Electric Vehicle Exports Due to IRA"... Ministry of Industry's Response 'Inadequate'

July 27 IRA Bill Announcement, Ministry of Industry Recognized Bill Trends on August 4
Missed Golden Time to Discuss IRA During Nancy Pelosi's Visit to Korea

[Asia Economy Reporter Oh Ju-yeon] At the National Assembly’s Ministry of Trade, Industry and Energy audit held on the 4th, Kim Seong-hwan, the policy chief of the Democratic Party and a member of the Industry, Trade, and Small and Medium Venture Business Committee, demanded prompt measures, stating, "The Ministry of Trade, Industry and Energy’s incompetence, ignorance, and lack of countermeasures?the three ‘no’s’ in diplomacy?have seriously damaged national competitiveness and economic sovereignty."

Rep. Kim stated, "According to the Korea Automobile Manufacturers Association, the IRA subsidy policy will disrupt the export of 100,000 electric vehicles annually," and argued that by the time manufacturers complete their factories in Georgia, USA, in 2024, total export losses could reach about 200,000 vehicles, approximately 11.6 trillion KRW. This is because the subsidy discrimination is expected to cause a price reversal phenomenon with American Tesla vehicles, leading to a sharp decline in exports.

Rep. Kim also strongly criticized the Ministry of Trade, Industry and Energy’s incompetence in trade countermeasures. The IRA’s parent law, the BBB (Better Building Act), passed the House of Representatives in November 2021, and in July this year, President Biden announced that the ‘emergency declaration’ enabling implementation of the system by executive order alone was under consideration, raising the possibility of the IRA bill’s passage. Japan had been lobbying the U.S. Congress and administration since September 2021, when the BBB bill was announced, to ensure the law was favorable to their country.

However, when asked in the National Assembly about the timing of the Ministry’s recognition of the IRA, the Ministry responded that it became aware in early August. The bill’s contents had already been announced on July 27, and related reports were being covered in the media. Moreover, the Ministry only visited the U.S. for the first time to meet with the U.S. Department of Commerce on August 9, after the bill had passed the Senate.

The presidential office’s lax response also came under scrutiny. When House Speaker Nancy Pelosi visited Korea on August 3, just before the bill passed the Senate, it was revealed that the IRA was not discussed at all amid controversy over President Yoon’s being bypassed. This was after the Korean Embassy in the U.S. had already submitted reports related to the IRA bill.

Rep. Kim questioned, "Article 102, Paragraph 1, Items 1 and 2 of the Korea-U.S. FTA Implementation Act stipulate that U.S. law takes precedence in case of conflict with the agreement, so even if issues are raised, the chances of winning are slim. Is the Ministry of Trade, Industry and Energy not even conducting proper post-review?" The Ministry is considering filing a complaint with the WTO, but since the EU has also introduced the Carbon Border Adjustment Mechanism (CBAM), the chances of winning at the WTO are also very low.

Rep. Kim demanded, "The Ministry’s incompetence is astonishing, but since the spilled water cannot be gathered again, we must minimize the damage and seek ways to restore our country’s economic sovereignty."

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