Southeast Asian Countries Demand Key Minerals Agreement for IPEF Negotiations and Korean Battery Industry Profits

delivery time2023-06-02 23:56

IPEF Negotiations Demand Key Minerals Agreement… Profits of the Korean battery industry when implemented

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

According to reports, the Philippines, Malaysia, and Indonesia are demanding the conclusion of the Core Minerals Agreement as part of the Indo-Pacific Economic Framework (IPEF), which the United States is negotiating with these countries.

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 procured from countries with which the United States has signed free trade agreements (FTAs).

Then, countries without an FTA with the United States, such as Japan and the European Union (EU), protested, and in the end, the Biden administration signed a separate core mineral agreement with Japan, granted Japan the status of an “FTA partner” and promoted a similar agreement with the EU. in progress

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

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

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

Politico observed 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 concluding IPEF negotiations by November.

Also, the US Congress may express its dissatisfaction. 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 consultation with Congress.

If the demands of Southeast Asian countries are fulfilled, it is expected to help the Korean battery industry in that the source of key minerals will diversify.

In particular, since Indonesia is a place where Korean companies procure a lot of core minerals, the Korean government has asked the US 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