[2022 National Audit] KOTRA US IRA "Delayed Response" Criticism

President Yujeongyeol "Could Not Anticipate Details of Electric Vehicle Subsidies"

Yoo Jung-yeol, President of the Korea Trade-Investment Promotion Agency, is reporting on business operations at the National Assembly's Industry, Trade, Energy, Small and Medium Venture Business Committee's audit of the Korea Trade-Investment Promotion Agency and the Korea Trade Insurance Corporation held on the morning of the 14th. (Photo by Yonhap News)

[Asia Economy Reporter Moon Chaeseok] KOTRA was heavily criticized by the political circles on the 14th during the National Assembly audit for its slow and inadequate response to the U.S. Inflation Reduction Act (IRA).

On the same day, Kim Seonghwan, a member of the Democratic Party of Korea and the Industry, Trade, Small and Medium Enterprises Committee of the National Assembly, pointed out at the audit of public institutions under the Ministry of Trade, Industry and Energy held by the committee that "KOTRA not only showed incompetence during the legislative process of the U.S. IRA but also increased corporate confusion with irrelevant analysis."

The IRA includes provisions to suspend electric vehicle purchase subsidies (tax credits) of up to $7,500 (about 10 million KRW) for imported electric vehicles, including those from Korea, starting next year. This provision was not included in the predecessor bill, the "Build Back Better Act" (BBB). The U.S. Senate amended and announced the IRA bill including this provision on July 28 (local time), and within just two weeks, it passed both the Senate and the House of Representatives. President Joe Biden signed it into law on August 16 (local time), and it was implemented.

According to political circles on the day, KOTRA posted a daily brief on its website about the bill's disclosure one day after the bill was made public, but it did not include any information related to electric vehicle subsidies. It only began including related content two weeks after the disclosure, and direct reporting to the Ministry of Trade, Industry and Energy was made on August 23, seven days after the IRA was implemented.

Because of this, criticism has poured in from political circles, especially the opposition, that the government and public institutions' response to the IRA was inadequate. Assemblyman Kim Seonghwan said, "The government (Andeokgeun, Director-General for Trade Negotiations) and the industry (Korea International Trade Association) are concerned that amending the IRA will not be easy, but KOTRA has been forecasting a relaxation of the IRA system after the U.S. midterm elections next month in reports since last month, further confusing companies," adding, "KOTRA should establish a system to thoroughly review internal production information before releasing it."

Democratic Party members Kim Jeongho, Lee Jangseop, Jeong Ilyoung, and Hong Jeongmin also collectively criticized KOTRA's response. Independent Assemblywoman Yang Hyangja inquired about the personnel responsible for KOTRA's response.

From the ruling party, the People Power Party, Assemblyman Kim Seongwon also criticized KOTRA's inadequate response to the IRA. He asked, "Did you not know about the electric vehicle-related content before the IRA passed?" CEO Yoo replied, "We did not anticipate the electric vehicle tax credit." Then, Assemblyman Kim raised his voice, saying, "There was no reprimand from the Ministry of Trade, Industry and Energy," and added, "There is no one taking responsibility."

Assemblyman Noh Yongho of the People Power Party pointed out that KOTRA's support for local companies' exports was insufficient and suggested revitalizing the local support teams operated by KOTRA. CEO Yoo said, "We recently added new roles to revitalize the local support teams," and added, "We will continue to make multifaceted efforts to expand exports of local companies."

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