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- Title
THE ELECTRIC VEHICLES DILEMMA: THE INFLATION REDUCTION ACT, INTERNATIONAL TRADE LAW, AND U.S.-KOREA ECONOMIC DIPLOMACY.
- Authors
Min Seong Kim, Mark
- Abstract
The Inflation Reduction Act (IRA) is a bold, comprehensive industrial policy that awards extensive subsidy to expedite the clean energy transition and inspire innovation. The final assembly provision of the IRA requires that an electric vehicle (EV) must be assembled with all necessary parts in North America to qualify for $7,500 tax credit. This domestic production requirement spurred a full-scale trade dispute and led foreign governments and automakers to vigorously lobby Washington, D.C. for an exemption. South Korea's economic diplomacy serves as a particularly informative case study of a foreign government's lobbying efforts to exert influence throughout the U.S. legislative and rulemaking process. Although the final assembly requirement engendered a national political crisis in Seoul, the country was forced to rule out mounting a legal challenge against the IRA through the World Trade Organization (WTO) Dispute Settlement Body, due to its lack of a functional Appellate Body and chronic delays in proceedings. Amidst the mounting opposition to the final assembly requirement from crucial U.S. allies, the Biden administration was also presented with a unique dilemma throughout the Department of the Treasury rulemaking for the IRA: should it honor the unambiguous text or find creative interpretive strategies to make concessions to its allies' demands? This Note shows that the IRA has led governments to question the role of the free trade principles and instead turn to ad hoc political agreements--as opposed to WTO litigation--for trade dispute resolution.
- Subjects
NORTH America; SOUTH Korea; PRICE inflation; ELECTRIC vehicles; CLEAN energy; WORLD Trade Organization; INFLATION Reduction Act of 2022
- Publication
New York University Journal of Legislation & Public Policy, 2023, Vol 25, Issue 3, p875
- ISSN
1094-513X
- Publication type
Article