The European Union's (EU) proposed Industrial Acceleration Law (IAA) may strengthen preferential treatment for regionally produced products, prompting the South Korean government to collaborate with the automobile, battery, steel, and nuclear power sectors.
On October 15, the Ministry of Trade, Industry and Energy announced the launch of a public-private joint task force (TF) to address the EU Industrial Acceleration Law, led by Park Jeong-seong, head of the Trade Negotiation Headquarters. The meeting will include representatives from key industries such as automobiles, batteries, steel, and nuclear power, as well as relevant government agencies.
The government and businesses will share insights on EU legislative trends and analyze the impacts on various sectors while discussing joint response strategies. The EU's Industrial Acceleration Law aims to enhance regional manufacturing capacity and strengthen industrial competitiveness. Legislative discussions have intensified since the EU Commission unveiled the proposal in March.
According to the Ministry, the EU Council's proposal in July and the European Parliament's proposal in September indicated a tightening of requirements for regional product preferences and a reduction in the recognition of trusted partner countries. This raises concerns that South Korean companies may not receive the same treatment as regional firms in the EU market. The government believes it is crucial to closely examine the potential impacts on industries actively entering the European market, particularly in automobiles, batteries, and steel.
The draft of the Industrial Acceleration Law includes provisions to expand the use of European products and low-carbon products in public procurement and public support. It also proposes certain conditions for large foreign investments in strategic industries such as electric vehicles, batteries, solar energy, and critical raw materials. Notably, investments exceeding 100 million euros that meet specific criteria would require a workforce composed of at least 50% EU employees.
Since the announcement of the law, the South Korean government has submitted four official position papers to the EU and engaged in high-level discussions. On September 9, Minister of Trade, Industry and Energy Kim Jeong-kwan met with the EU's Executive Vice President for Growth, and on September 30, Park Jeong-seong discussed the matter with the EU Commissioner for Trade.
The South Korean government has also communicated its position to the governments of the 27 EU member states and key members of the European Parliament, emphasizing that South Korea is a trusted partner that has signed a free trade agreement (FTA) with the EU and contributes to investment, employment, and supply chain development in Europe.
This task force aims to shift the existing response framework to a public-private collaborative system. The Korea International Trade Association, KOTRA, industry associations, and companies will share information on local legislative developments and impacts, leveraging networks with EU local subsidiaries and partner firms.
The government anticipates that the positions of the EU Council and the European Parliament will become clearer by the end of the year and plans to intensify local persuasion efforts during this period. Park Jeong-seong stated, "South Korea is a key FTA partner of the EU and a reliable collaborator that has contributed to investment, employment, and supply chain development in Europe. Through this task force, we will consolidate the capabilities and networks of the public and private sectors and actively respond to the EU legislative process to ensure our companies are not discriminated against."
* This article has been translated by AI.
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