EU Says US Must Fix Discriminatory Aspects of IRA

The top trade official from the EU, European Commission Executive Vice President Valdis Dombrovskis, said the incentives for the green transition in the Inflation Reduction Act appear to discriminate against automotive, battery, renewables and energy-intensive businesses operating in the EU. "It will not be easy to fix it -- but fix it we must," he said during an Oct. 31 speech at the EU Foreign Affairs Council in Prague. He also said, "This is an issue of concern for many countries and businesses, which I have raised with our US partners over these past weeks, and it featured prominently in today's discussions."

U.S. Trade Representative Katherine Tai met with him on Oct. 30, and the USTR readout of that meeting said Tai "underscored the United States’ commitment to pursuing a high-ambition global arrangement with the European Union in order to address carbon intensity and overcapacity in the steel and aluminum industries."

She also said the EU and the U.S. "agreed to continue work to address common challenges in the civil aviation sector." The resolution of the Airbus-Boeing dispute resulted in a five-year suspension of tariffs on both sides (see 2106150007) and as part of that agreement, they said they would "cooperate on countering investments" that are influenced by non-market forces.

Dombrovskis said that the U.S.-EU Trade and Technology Council's next meeting must focus on results, not agenda-setting. "We want to see more TTC focus on climate change. So we hope to announce a 'Transatlantic Initiative on Sustainable Trade,'” he said.