Harris visit unlikely to help Korea resolve IRA concerns

The Korea Times

The Korea Times

National

Tue, September 26, 2023 | 09:33

Politics

Harris visit unlikely to help Korea resolve IRA concerns

Posted : 2022-09-28 16:35

Updated : 2022-09-29 08:26

U.S. Vice President Kamala Harris, center, talks to U.S. Navy sailors as she receives a briefing from them while on the USS Howard at Yokosuka Naval Base in Japan, Wednesday. AP-Yonhap

US vice president to arrive in Seoul Thursday

By Kang Seung-woo

It will be virtually impossible for the U.S. to allow, during U.S. Vice President Kamala Harris' visit to Seoul Thursday, some types of exceptions for South Korea in the Inflation Reduction Act (IRA) that poses a threat to the South's carmakers, according to diplomatic observers, Wednesday.

Since news broke earlier this month that Harris' trip includes a meeting with President Yoon Suk-yeol, there has been speculation that the No. 2 official in the U.S. government might be able to do something to ease complaints voiced by its longtime ally about the IRA.

In addition, Harris' remarks from her meeting with Prime Minister Han Duck-soo in Japan, Tuesday ― after which the first vice foreign minister accompanying Han quoted her as saying that Washington will seek ways to address Seoul's concerns over the IRA ― have further raised expectations here. The two met on the occasion of former Japanese Prime Minister Shinzo Abe's state funeral.

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Last month, U.S. President Joe Biden signed into law the IRA, which has the goals of lowering costs for U.S. consumers, investing in domestic clean energy production and supporting affordable healthcare.

Taking a closer look, the IRA provides a government tax credit of up to $7,500 (10.8 million won) to each buyer of an electric or fuel cell vehicle that fits a set of requirements including final assembly in North America, as well as regarding the sourcing of critical minerals in batteries and the manufacture and assembly of the battery components, among others. However, Korea-made electric vehicles are currently excluded from the tax credit due to being manufactured outside of the U.S.

"There is no way that the U.S. government will revise the law because Biden has touted it as one of his biggest achievements in office ahead of the midterm elections in November," said Park Won-gon, a professor of North Korean studies at Ewha Womans University.

"In addition, the U.S. cannot give an exception only to Korea, while its other close allies are subject to the IRA," he continued.

Spearheaded by President Yoon, senior South Korean government officials have protested the IRA to their U.S. contacts, stressing that it would violate the Korea-U.S. Free Trade Agreement (KORUS FTA) and World Trade Organization regulations. They have also called for Congress-level efforts to resolve Seoul's grievances regarding the IRA.

However, the U.S. side has repeated that it was well aware of South Korea's concerns over the matter and, based on the precedents, Harris is almost certain to maintain the line set by the administration.

In a background press briefing after the Han-Harris meeting, a White House official said the vice president was not there to negotiate an approach to the issue of electric vehicles.

Cho Han-bum, a senior researcher of the Korea Institute for National Unification, predicted that it will not be easy to revise the law even after the elections.

"A revision requires bipartisan cooperation, but the IRA is related to inflation, so we cannot expect that possibility," he said.

During her one-day visit, Harris plans to visit the Demilitarized Zone. Cho said her trip to the most heavily armed border in the world may have to do with U.S. efforts to ease negative sentiment among South Koreans worried about the effects of the IRA by showing Washington's commitment to defending South Korea.

"As Biden cannot revise the law, he is alternatively seeking to appease complaints from South Korea ― although it is also aimed at deterring North Korea, which has been showing signs of being ready to conduct a nuclear test," Cho said.

ksw@koreatimes.co.kr