Second Vice Foreign Minister Kang In-sun (R) shakes hands with Jose Fernandez, under secretary of state for economic growth, energy and the environment, ahead of their annual Senior Economic Dialogue at the foreign ministry building in Seoul on Jan. 31, 2024. (Pool photo) (Yonhap)
SEOUL, Jan. 31 (Korea Bizwire) – South Korea called for the United States on Wednesday to come up with “reasonable” regulations on limiting the sourcing of critical minerals and components from countries like China to qualify for U.S. incentives for electric vehicles (EVs), the foreign ministry said.
Second Vice Foreign Minister Kang In-sun delivered the position to Jose Fernandez, under secretary of state for economic growth, energy and the environment, during annual senior-level talks on economic cooperation in Seoul.
Kang “called for U.S. support in formulating reasonable regulations that take into account the reality of supply chains for the implementation of the provisional IRA guidance on the Foreign Entity of Concern (FEOC),” the ministry said.
South Korea has expressed concerns over the rules under the new U.S. Inflation Reduction Act (IRA) on promoting green technologies, saying it is difficult to drastically reduce dependence on China within the timeframe given under the IRA.
Under the rules, beginning in 2025, an EV eligible for tax credits may not contain any critical minerals that were extracted, processed or recycled by an FEOC. Starting this year, an eligible EV may not contain any battery components that were manufactured or assembled by an FEOC.
In December, the U.S. government announced China, Russia, North Korea and Iran as countries on the FEOC list.
The FEOC rules are seen as part of U.S. efforts to reduce the dependence on China, the world’s largest supplier of key EV materials, amid the strategic rivalry between Washington and Beijing.
Kang highlighted South Korean companies’ investments in the U.S. market that have contributed to job creation and strengthening of supply chains, and requested Washington’s attention so that the companies can receive the corresponding tax credits and subsidies, the ministry said.
The two sides agreed to continue close cooperation in the efforts to diversify supply chains for critical minerals like graphite, through the Minerals Security Partnership and other similar consultation channels.
They also discussed ways to work together to ease the digital divide and better respond to climate change in the Indo-Pacific region.
Kang asked for U.S. participation in the carbon-free energy initiative being pushed for by Seoul and shared information on South Korea’s efforts toward the clean energy transition.
The ministry did not mention whether the two sides discussed South Korea’s proposed regulations to beef up oversight over major online platform businesses against monopolistic market activities.
Sources familiar with the matter said the topic was not brought up in Wednesday’s Senior Economic Dialogue.
On Monday, the U.S. Chamber of Commerce issued a statement opposing the Fair Trade Commission’s push to introduce the “platform legislation,” saying it will hinder market competition and unfairly target foreign firms.
The proposed bill, if enacted, is expected to affect Google Inc. and Apple Inc., as well as South Korea’s two biggest platform giants: Naver Corp. and Kakao Corp.
Fernandez was in Seoul on the last leg of his three-nation trip to Asia that began Monday that included stops to Vietnam and the Philippines.
(Yonhap)
