The EU expects a partial fix to U.S. green subsidy laws
The European Union should not expect that talks with the United States will be able to resolve all the issues with which it is dealing. This is in regard to the United States. For its part, the European Commission has not ruled out the possibility of taking any responsibility as a result of the U.S. Inflation Reduction Act.
As a result of the $430 billion act, consumers will be able to claim tax credits for certain U.S.-produced electric vehicles (EV) and other green products that have been produced in the country. If this happens, the United States will have an advantage over Europe in the EV market.
An intergovernmental task force has been set up between the two countries to discuss the issue, with the Union seeking the same exemption that has been granted by Washington to free trade agreement partners such as Canada, Mexico, and Australia.
As Dombrovskis said during the discussion in the Parliament’s trade committee, he was expecting the task force to provide a report next week. This will be in any case, before the end of the year when parts of the act will come into effect.
I think that a lot of lawmakers will be interested in seeing to what extent their concerns have been addressed, he told them. As a consequence of the implementation of this project, some of our problems will be solved, however not all of them.”
Having said that, Dombrovskis added that a response from the European Union would have to be considered at that point. This is because the bloc did not wish to enter into a subsidy conflict at that point.
He said in an interview he was not taking different options off the table. He said there were some colleagues who mentioned the possibility of a WTO challenge, but he stressed they were not saber-rattling either. Right now, we are focusing on negotiations
Dombrovskis said on Monday that he had heard that U.S. Secretary of State Antony Blinken thought there was an option of interpreting the term “free trade partner” more loosely so that an exemption could be granted to the EU, and that he would look into it.
Asked by a reporter what might be the United States’ response to this situation, U.S. Treasury Secretary Janet Yellen declined to clarify any specifics in response to the question.
In Fort Worth, Texas, she told reporters, “In looking at what is lawful and feasible, as well as what is feasible, we will have to write regulations within the context of the legislation as it stands at the moment.”
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.
