Southeast Asian countries also ask the US to “recognize the origin of the IRA’s core minerals”

delivery time2023-06-02 23:56

Key Minerals Agreement Demand IPEF Discussions… Korean battery industry profits when implemented

Indo-Pacific Economic Framework Ministerial Meeting

May 27, 2023 (local time) Indo-Pacific Economic Framework (IPEF) Ministerial Meeting held in Detroit, USA. [산업통상자원부 제공. 재판매 및 DB 금지]

(Washington = Yonhap News) Reporter Kim Dong-hyun = Politico reported on the 2nd (local time), a political media outlet, that Southeast Asian countries are asking the US to allow their core minerals to benefit from electric vehicle subsidies the US Inflation Reduction Act (IRA) .

According to reports, the Philippines, Malaysia, and Indonesia are demanding that the Core Minerals Agreement be completed as part of the Indo-Pacific Economic Framework (IPEF), which the US is negotiating with the countries this.

In order to receive the IRA tax credit for electric vehicles, key minerals used in batteries, such as lithium, nickel, manganese, graphite and cobalt, must be acquired from countries with which the US has signed free trade agreements (FTAs) .

Then, countries without an FTA with the US, such as Japan and the European Union (EU), protested, and in the end, the Biden administration signed a separate core minerals agreement with Japan, giving Japan “FTA partner” status. ” and promoting a similar agreement with the EU in progress

When Southeast Asian countries reach an IPEF agreement like this, they want it to be seen as having completed an FTA with the United States.

“We raise the question of whether the IPEF can be considered equivalent to the FTA so that our companies can receive the IRA subsidies,” Philippine Industry Secretary Alfredo Pascual said in an interview.

According to Indonesian media, Indonesian Economic Coordination Minister Aylanga Hartato also proposed adding the Core Minerals Agreement to the IPEF trade sector at the IPEF ministerial meeting held in Detroit on the 27th.

Politico noted that such demands from Southeast Asian countries could complicate the Biden administration’s plan to offset China’s economic influence in the Indo-Pacific by ending the IPEF negotiations by November.

Also, the US Congress can express its displeasure. Congress has already criticized the Biden administration for distorting the purpose of the IRA, which seeks to revive manufacturing in the United States by promoting core mineral agreements with Japan and the EU without consulting Congress.

If the demands of Southeast Asian countries are met, it is expected to help the Korean battery industry as the source of key minerals will be diversified.

In particular, since Indonesia is a place where Korean companies acquire many core minerals, the Korean government has asked the United States to interpret Indonesia as a country that meets the IRA’s core mineral origin requirements.

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2023/06/02 23:56 Sent