EU and Korea should cooperate on US inflation law, South Korean minister says –

The European Union and South Korea should cooperate in response to the US Anti-Inflation Act (Inflation Reduction ActIRA), South Korea’s Trade Minister Duk-geun Ahn argued in an interview with EURACTIV.

However, Mr. Ahn warned the EU against opening this body “Pandora’s Box” protectionist industrial policy, because many European proposals, in his opinion, have the same spirit as the IRA.

L’Inflation Reduction Act It provides large-scale subsidies for US-made electric cars and batteries, thus discriminating against European and South Korean manufacturers.

“The EU and Korea have many opportunities to work together and create a system [de la loi IRA] More compatible with the WTO [Organisation mondiale du commerce]in order not to create unnecessary problems for strategically important parts of our industry”Mr. Ahn said.

South Korea and the EU both have auto industries that feel threatened by the US bill. Acknowledging that it may be very difficult to change the law in the short term, Mr. Ahn argued that the situation could be improved.

“The United States is somewhat constrained by the discriminatory structure of the law.”, he declared. He also added that the EU and South Korea could work with the US administration “Minimizing the discriminatory impact of the IRA”.

“If it becomes clear that they can’t do anything, or if they’re unwilling to work with us to find an adequate solution, we’ll have to find another alternative.” »

Deflation Act: Ursula von der Leyen speaks up

European Commission President Ursula von der Leyen emphasized the importance of harmonizing EU state aid rules and called for EU funding for European industrial policy.

Pandora’s box

While he called for a joint approach to dealing with the United States, the trade minister also noted that attitudes within the EU have changed.

“The EU has long been an important defender of the global trading system based on the rule of law. […] but there are many suggestions [européennes] Those of the same spirit as the IRA”explained Mr. Ahn.

“If the EU crosses this line, we will have to face the opening of Pandora’s box. »

“Japan, Korea, China … every country will be in this very high race to ignore the global trade rules we’ve spent decades building.”he declared.

Furthermore, he cautioned against the approach “myopic” et “nationalist” of world trade.

When asked about South Korea’s very fast and efficient economic development made possible by industrial policy, Ahn said that state interventions were mostly stopped after the country became a member of the WTO.

“The role of the government in the development of the industrial sector was very important, but since the WTO system came into force, the Korean government has hardly been directly involved in industrial policy. »

He argued that industrial policy should respect trade rules and that WTO reform was needed to enable this. However, he admitted that reforming the WTO would be difficult.

“This is a serious challenge, like COP 27”he said, citing international climate diplomacy meetings that have failed to get the international community to reduce greenhouse gas emissions.

Better access to Korea’s offshore wind market

Korea’s trade minister was in Brussels in early December to discuss the implementation of a joint free trade agreement between the EU and South Korea and discuss other trade issues.

During this meeting, for example, Brussels and Seoul agreed on digital trade principles that could form the basis of a future trade agreement in this area.

The South Korean delegation also pledged to work to remove local content requirements for offshore wind farms, which EU wind producers see as discriminatory.

“Within a year, we will reform this measure”Ahn told EURACTIV.

“Fortress” of MACF

The South Korean minister also came to Brussels to express his concerns about the European Carbon Cap Mechanism (MACF). It aims to estimate the CO2 emissions of imported goods. Currently, this measure is being discussed between the European Parliament and EU member states.

“We understand that this is a very important political tool”Mr. Ahn said. “however, the way MACF has developed is causing a lot of concern for our industry. » Similar concerns have been raised by a number of African leaders.

Mr Ahn said he hoped the EU could design the mechanism in such a way that this would not happen “It creates a lot of problems for the global system”claims that this will help the EU to spread MACF around the world.

“I don’t think that the overall goal of the EU is to launch a system within the European Union and then build a MACF fortress here. [dans l’UE]. »

Therefore, Mr. Ahn believes that the implementation of the MACF should be based on closer consultation with the EU’s trading partners.

The South Korean minister concluded with a warning from the EU “He’s mismanaging the whole process”then this could be considered as a mechanism “European IRA”.

[Édité par Anne-Sophie Gayet]

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