Federation of Korean Industries (FKI) Chairman Huh Chang-soo, second from left, speaks at the "34th Korea-U.S. Business Meeting" held at the FKI Hall in Seoul, Thursday. From left, Foreign Minister Park Jin, Huh, Chairperson of the U.S. ― Korea Business Council Octavio Simoes, and U.S. Ambassador to Korea Philip Goldberg. Courtesy of FKI

Two countries also advised to sign long-term currency swap deal

By Kim Hyun-bin

Korean and U.S. business leaders called for efforts on Thursday to address discriminatory trade policies created by the U.S. Inflation Reduction Act (IRA), which only grants tax credits to electric vehicles manufactured in North America.

During an annual conference co-hosted by the Federation of Korean Industries and the American Chamber of Commerce in Korea, the key business lobbies of both countries issued a joint declaration urging the two governments to address issues such as the electric vehicle tax credit passed into law in the IRA and search for a non-discriminatory resolution.

They pointed out that the IRA could violate the U.S.-Korea Free Trade Agreement (KORUS) and the World Trade Organization (WTO) Agreement.

Foreign Minister Park Jin, front row center, Federation of Korean Industries (FKI) Chairman Huh Chang-soo, front row fifth from left, and Chairperson of the U.S. ― Korea Business Council Octavio Simoes, front row fifth from right, pose with business leaders from Korea and the U.S. after the 34th Korea-U.S. Business Council held at the FKI Hall in Seoul, Thursday. Courtesy of FKI

The 34th Korea-U.S. Business Council, hosted by the FKI and the U.S. Chamber of Commerce in Korea, took place in person at FKI Hall in Seoul for the first time in three years due to the COVID-19 pandemic.

FKI Chairman Huh Chang-soo emphasized the need for the Korean and U.S. governments to improve export control policies to ensure the stable management of global supply chains and guarantee fair trade.

"The enforcement of the IRA has already affected the sales volume of Korean products in the U.S, and it is urgent that we come up with countermeasures," he said. "Since the two countries are close allies in the areas of security and the economy, I hope that the current challenges can be wisely resolved between the leaders of the two countries," he added.

During the meeting, U.S. Ambassador to Korea Philip Goldberg said, "We're very aware of the concerns regarding portions of the Inflation Reduction Act, IRA."

He added, "While we acknowledge these concerns and are open to consultative dialogue as close allies, I want to reiterate our full commitment to our economic partnership. U.S.-Korea business ties are strong and long-standing and we want to make them even stronger."

Participants from both countries also emphasized the need to improve regulations related to trade restrictions as well as corporate rules, which do not conform to the principles of the Korea-U.S. economic alliance and the bilateral free trade agreement.

"It is difficult to determine the effect of the IRA, but as of September of this year, sales of our electric vehicle brands' flagship models decreased by more than 10 percent compared to the same month of the previous year, and there are concerns that the slowdown in sales of Korean EVs in the U.S. will worsen in the future." Seo Jang-seok, head of the Korea Automobile Manufacturers Association, said.

In addition, the representative of the two countries urged the two governments to upgrade a U.S.-Korea currency swap facility into a long-term agreement or promote a comparable measure to bring further stability to the Korean exchange market, as a follow-up measure to a joint statement the leaders of the two countries issued during their summit in May of this year.

Among other key participants at the meeting were Foreign Minister Park Jin, Trade Minister Ahn Duk-geun, Octavio Simoes, president and CEO of Tellurian Inc. and Charles Freeman, senior vice president for Asia at the U.S. Chamber of Commerce.