MEMO TO CLIENTS ISSUE 22-010 – September 9, 2022

South Korea Expresses Concerns on Electric Vehicle Provisions of the Inflation Reduction Act

South Korea has expressed its concerns about the provisions on electrical vehicles in the Inflation Reductions Act. The Trade Industry and Energy Minister have said that while South Korea supports the efforts to expand clean energy, the Act grants tax benefits to U.S. EV’s over imported EV’s which could be a violation of the Korea-U.S. Free Trade Agreement and that this matter should be settled quickly.

West Coast Labor Update

We have been reporting on the smooth sailing on the ILWU contract negotiations. There are two new situations for concern. There is a long-standing issue at Terminal 5 (T5) in the Port of Settle on jurisdictions. There is an existing contract for maintenance and repairs (M&R) at the terminal that was granted to the International Association of Machinists (IAM) as a result of a National Labor Relations Board (NLRB) ruling. The ILWU had negotiated with PMSA in 2008 to obligate Port employers to support the ILWU in jurisdictional claims against other unions for work on the docks. The PMSA is making proposals to the ILLWU so that this type of jurisdictional challenge will not happen again. This will be a key point in the final negotiations.

There is another union that is not part of the current contract negotiations that is of concern. The ILWU Security Guards in the Port of Los Angeles and Long Beach have authorized a strike for their own separate negotiations. The PMSA is having separate talks with this local union to come to an agreement; however, if this union does have work actions or stoppage, we believe that the ILWU will support the local union actions. We will be watching both situations closely.

U.S. Begins New Trade Talks with 13 Asian Countries

United States is beginning new trade discussions with 13 Asian countries on trade facilitation with an initial two-day meeting in Los Angeles. The Indo Pacific Economic Framework for Prosperity (IPEF) is intended to focus on non-tariff issues dealing with improving access for trade between the member countries. This will not be a traditional trade negotiation. The talks will center around 4 pillars: trade, supply chain resilience, decarbonization, taxes and anti-corruption. The specifics of expectations will be part of the startup meetings in Los Angeles. The 13 countries joining in the initial IPEC meetings are Australia, Indonesia, Vietnam, India, Japan, South Korea, Singapore, Brunei, Fiji, and Singapore.

USTR Announces Continuation of 301 duties for Lists 1 and 2

The Office of the U.S. Trade Representative (USTR) issued an announcement that China 301 duties under List 1 and List 2 that were to expire after four years from initiation of the lists will not expire at this time. There were several comments received during the comment period in reference to the China 301imports. The lists will remain in effect while the USTR does a full review of the tariff actions. A copy of the USTR can be found on their website.