The EU demands an immediate fix to the green subsidy law from the United States
As European Union ministers warned on Friday, time had run out for Washington to alter its plans to grant consumer tax credits to American-produced electric vehicles and other green products, despite the fact that the government had acted swiftly.
A study conducted by the European Union found that the $430 billion Inflation Reduction Act of 2017 – expected to take effect in January – could potentially lead to the United States becoming a world leader in the electric vehicle market at the expense of Europe. The EU wants to be exempted from export control rules, as has already been agreed upon for Canadian and Mexican goods.
Jozef Sikela, the Czech minister for industry and trade, stated that all 27 EU members were concerned. He agreed that the issue had to be addressed quickly as it was a matter of grave concern.
A joint task force was formed in early November by the two sides to deal with the issue on a joint basis.
During a press conference Wednesday, EU Trade Commissioner Valdis Dombrovskis said that he and his EU counterpart Margrethe Vestager will evaluate progress when they meet with their American counterparts at the U.S.-EU Trade and Technology Council (TTC) on December 5.
Although these discussions are difficult, they must produce concrete solutions as a result. He added that they must build alliances in the fields of renewable energy and batteries because of the current geopolitical climate, with Russia’s war in Ukraine.
Dombrovskis said the task force would need to continue working beyond Dec. 5 if it wanted to reach a solution by then. Some ministers had earlier expressed hope for a solution by the meeting.
There is no interest on either side in a fully-fledged trade war, according to Dutch trade minister Liesje Schreinemacher.
As for a deadline, she told me, “We don’t want to set any, we need time to get out of this,” she said.
It was an extremely tight deadline, according to my Swedish counterpart Johan Forssell.
It is essential that we hurry up and make a decision, and we cannot wait too long to do so… So I think we must make a decision pretty soon,” he said.
French minister Olivier Becht said that the green transition underway by the U.S. should ensure fair competition, rather than violate the WTO rules. This would result in a race to the bottom for subsidies. Although no formal challenge has yet been filed against the act at the World Trade Organization, it could yet be tested in court.
“”Have we taken concrete steps to comply with the EU’s wishes or have we fallen short?”
Prachi, an accomplished Chief-Editor at The Sustainable Brands Journal, has 15+ years of experience in Europe, the Middle East, and India, managing 90+ global sustainable brands. She’s a prolific writer in sustainability, contributing to various publications. Prachi’s unwavering passion and expertise make her a recognized authority, driving positive change and inspiring a sustainable future.
