|Gowling WLG partner Frank Sur delivers a lecture during the Business + Forum at Lotte Hotel in Seoul, Thursday. Courtesy of the Korea Trade-Investment Promotion Agency|
By Park Jae-hyuk
The implementation of the U.S. Inflation Reduction Act (IRA) could be a significant opportunity to enhance business partnerships between Korea and Canada, lawyers from both countries said at a forum co-hosted by the Korea Trade-Investment Promotion Agency (KOTRA) and the Canadian Chamber of Commerce in Korea (CanCham Korea), Thursday.
The legal experts especially advised carmakers and battery firms here to take advantage of the North American country's rich deposits of critical minerals for electric vehicles (EVs).
Frank Sur, a partner at Canadian law firm Gowling WLG, introduced Canada as one of the most optimal places for Korean firms to source critical minerals to make EV batteries, given that the country has signed a free trade agreement (FTA) with the U.S. and it is a source for all five critical minerals needed for EVs: nickel, cobalt, lithium, manganese and graphite.
The IRA provides a tax credit to U.S. consumers who purchase EVs that undergo final assembly in North America. All vehicle battery components must be manufactured or assembled in North America, and their critical minerals must be sourced from the U.S. or countries that have free trade agreements with the U.S.
"The U.S. is not going to abandon the IRA," Sur said.
The Korean Canadian lawyer said that it is time to invest in Canada, which has competitiveness not just in mining, but also in infrastructure, manufacturing and recycling. Mentioning LG Energy Solution's partnerships signed in September with Canadian battery materials suppliers, he expected more deals to come between the two countries' companies.
Pak Hyo-min, a partner at one of Korea's major law firms, Shin & Kim, said that the IRA marks an effort of the U.S. government to reshore manufacturing there, although the law is also intended to attract investments in domestic energy production and reduce carbon emissions.
"All companies doing business outside of North America will be adversely impact by the IRA," she said.
Sharing Sur's view, Pak said that Canada is a competitive partner for Korea, compared to the U.S., and Korea is also a competitive partner for Canada, compared to China.
CanCham Korea Chairman Robert Laing introduced Canada as a "gateway" to the North American market.
Laing, who also serves as a vice president of Lockheed Martin's Korean operations and one of the board of governors of the American Chamber of Commerce in Korea (AMCHAM), also suggested that U.S. allies and their companies help the U.S. find ways to cooperate with its allies.
Lyu Jae-won, executive vice president of trade-investment data at KOTRA, urged close attention to the global supply chain, expecting the IRA to affect all companies that want to expand their presence in the U.S.