The MEP called on the EU to file a complaint with the WTO because of the US act to reduce inflation

The European Union and the United States will not be able to reach a compromise on the issue of Washington’s subsidizing of American companies, the EU needs to file a complaint with the World Trade Organization (WTO), said Bernd Lange, chairman of the trade committee in the European Parliament.

In August, US President Joe Biden signed into law a law that should help reduce inflation. The Inflation Reduction Act (IRA) provides, in particular, for reducing the cost of health care, energy, reducing harmful emissions, tax reform, and reducing the deficit. In addition, a 15% minimum corporate income tax was adopted. The EU has previously stated that the law infringes on the rights of manufacturers of imported products, and demanded change some of its points.

“I assume that the negotiations between the EU and the US will not be able to agree on even small changes in the implementation of the IRA. The basic structure of the IRA will remain. In this regard, I consider it necessary that the EU quickly file a complaint with the WTO in the coming months,” said MEP in an interview with the Funke media group (TASS quote).

At the same time, the EU “should step up support for its industry,” Lange said, and explore how to lower energy prices for businesses. He clarified that now they are 10 times higher than in the United States.

Markus Ferber, an economic expert in the European Parliament, said that the IRA “threatens to significantly worsen the already difficult economic situation in Europe.” He urged Washington to “take a step towards Europe” and think about stepping up its trade protection tools if that doesn’t happen.

Earlier, the European Commission demanded that the United States change some paragraphs of the law on reducing inflation, as they are contrary to WTO rules, European Commissioner for the Internal Market Thierry Breton said in November. “We have listed nine problems. We sent a letter of injunction with very specific clauses that, in our opinion, are contrary to the rules of the WTO, ”Breton said.

According to him, either the US will change these points, or the EC will have to raise this issue at the WTO level and consider specific responses.

A meeting of the EU-US Trade and Technology Council is scheduled for December 5, where the Europeans want to discuss with the Americans the problems caused by this law. The act provides manufacturers investing in the US with significant tax breaks and subsidies at a time when energy prices already make moving production to the US attractive.