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EDIRA challenge for Korea

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Seoul must ally with other nations to rebuke US

Nothing shows the political and diplomatic contradictions facing the U.S. government better than its new law, the Inflation Reduction Act (IRA).

Abroad, the Joe Biden administration wants to maintain its global political and economic hegemony by sidelining China, which is catching up quickly. At home in the U.S., the leadership of the Democratic Party needs to satisfy increasingly disgruntled Republican voters by adopting at least the economic part of Donald Trump's "America First" policy.

The IRA calls for, among other things, discriminating against foreign electric vehicle makers by offering tax credits to U.S. consumers of EVs that undergo final assembly in North America. All vehicle battery components must be manufactured or assembled in North America, and their critical minerals sourced from the U.S. or countries with free trade agreements with the U.S. As many other countries see it, there seem to be few allies or friends amidst this discriminatory situation.

It was no surprise that French President Emmanuel Macron appealed on behalf of Europe against the bill during his state visit to Washington.

President Yoon Suk-yeol made a similar attempt even before Macron, during his 48-second conversation with Biden in New York two months ago. Yoon had no other choice ― Korean EV makers, such as Hyundai and Kia, saw their U.S. sales plunge by 30 percent after the IRA went into effect. A bigger problem is that the U.S. move came right after Korean chipmakers, including Samsung and SK, promised multibillion-dollar investment plans in America, and Biden thanked them repeatedly. Yoon must be hearing his critics complaining, "The U.S. stabbed us in the back ― again."

U.S. officials are now busy appeasing sulking allies, saying they might consider revising some problematic parts of the bill. Still, few can know who would benefit from a reported amendment and in what ways, as most of the bill's core parts will remain the same. Washington might have put forth the bill to reap political and economic gains on the global stage. However, it may end up isolating allies and benefitting Beijing.

For Yoon and his administration, which have been braving domestic criticism about them leaning one-sidedly to the U.S., the ongoing development may be even more embarrassing. Yet that can never justify their bungling of domestic countermeasures. At a time when the global chip war is intensifying, Korea is doing almost nothing to help its troubled semiconductor makers. The government and the ruling party blame the opposition parties for dragging their feet in legislating supportive laws.

True, partisan bickering should stop at the border, whether it's about national security or the economy. However, the same theory should first be applied to the administration and its party. Why can't they concede to trivial legislation and get the chipmaker support law in return? To be able to criticize the opposition for sticking to vote-gathering tactics, the government camp must first remove itself from similar temptations.

Korea's semiconductor competitiveness has fallen to fifth worldwide, as China recently overtook it to narrow the gap with the U.S., Taiwan and Japan. A U.S. strategist's advice to Korea is noteworthy in this regard. "A robust and updated alliance between Korea and the U.S. can co-exist with a productive Korea-China relationship," said Edgard D. Kagan, a special assistant to Biden for East Asian affairs, last Tuesday.

The U.S. expert's advice may not be reflected in Biden's policy. Still, it must be included in the Korean government's economic diplomacy.

For Yoon and his aides, that may be easier said than done.

Since he took office about six months ago, the conservative prosecutor-turned-politician has made it clear that he will put all his diplomatic apples in one basket: the U.S. It may no longer be possible to rely on America for national security and depend on China for trade and economy amid this new cold war between Washington and Beijing. However, few countries are following the U.S. path almost blindly regardless of the issue, like Korea is doing.

A group of Korean trade officials left for Washington on Sunday to "beg for Korea's exemption" from the IRA.

That could be possible, though it could result in humiliation. Korea signed a free trade agreement with the U.S. despite considerable domestic opposition a few decades ago. Washington's move violates the ROK-U.S. FTA. Seoul must ally with similar foreign governments in rebuking Washington. Fair and confident approaches can get concessions ― and some respect.


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