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South Korea’s auto industry is calling on the French government to amend a draft revision to its electric vehicle (EV) subsidy policy, claiming it is likely to be in violation of the free trade agreement (FTA) between the EU and South Korea.

According to the Korea International Trade Association (KITA) and Korea Business Association Europe, the French government has drafted a new subsidies package which they say likely discriminates against vehicles produced in South Korea.

The associations expressed their concern in a “letter of opinion” to the French government, pointing out that the new bill likely excludes Korea-made EVs from tax credits that would be available on EU-made models – which would violate the Korea-EU free trade agreement on trade discrimination grounds.

They claim that while EVs currently sold in France qualify for tax credits based on price and fuel efficiency, while under the draft amendment tax credits would be awarded based on carbon emissions produced in the entire EV value chain, from manufacturing to transportation. Therefor EVs shipped by vessels from non-European countries, including vehicles made in Asian countries including South Korea and China, are unlikely to qualify.

In the letter sent to the French government, the associations wrote “according to the (French EV subsidy) revision, Korean EVs will likely be discriminated in competition with EVs produced in France and other EU nations” and called for a removal of the measure that discriminates against Korean EVs in the final draft.

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By GlobalData