Bipartisan Delegation Led by Ways and Means Chair Talks Trade in Seoul
House Ways and Means Committee Chairman Jason Smith, R-Mo., talked about the U.S.-Korea trade deal, the Indo-Pacific Economic Framework and the Inflation Reduction Act's restrictions on electric vehicle battery inputs with top Korean officials during a recent visit to Soeul.
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In an Aug. 1 press release, Smith said U.S. politicians "look forward to strengthening our bilateral relationship for many years to come, including in ways that improve this partnership to strengthen supply chains and reduce economic dependence on China."
However, according to local press reports, Korea's Industry Minister Lee Chang-yang "stressed the need for the United States to draw up detailed guidance on 'foreign entities of concern' rules." Those rules will apply to EV battery components from these firms first, and then to critical minerals processed or mined from these firms. If an EV battery contains either input after 2024 and 2025, respectively, the car cannot qualify for IRA credits, which are worth as much as $7,500. The restriction is expected to cover all Chinese production (see 2208040045 and 2303310001).
Lee also asked that critical minerals from more than free-trade-agreement partners be eligible for the credits. South Korea is one of the countries with which the U.S. has a full FTA, but its leadership says those countries' capacity "is far from sufficient to satisfy all the requirements and some minerals are only available in specific areas."
Smith's press release did not address the IRA, or non-FTA critical minerals agreements, such as the one with Japan. However, on IPEF, he said he "expressed his support for U.S. engagement in the Indo-Pacific region but emphasized that lawful trade agreements must have the support of Congress and cannot be unilaterally negotiated by the White House." The Japan agreement did not have a vote in Congress.
"I am continuing to monitor the ongoing IPEF negotiations to evaluate whether this initiative will be meaningful for American farmers, workers, and small businesses. Enduring and successful trade policy between the U.S. and South Korea must include input and support from both the Executive Branch and Congress, which is why this engagement was so critically important," Smith said.
In addition to Smith, three Republicans on the Ways and Means Committee were in the delegation, as well as Reps. Aumua Amata Coleman Radewagen, R-American Samoa; Nathanial Moran, R-Texas; Ritchie Torres, D-N.Y.; and Morgan McGarvey, D-Ky.