UPDATE 1-EU demands rapid fix from U.S. to green subsidy law

(Updates after end of trade ministers meeting)

By Philip Blenkinsop

BRUSSELS, Nov 25 (Reuters) - European Union ministerswarned on Friday that time was running out to changeWashington's plans to grant consumer tax credits forU.S.-produced electric vehicles and other green products.

The EU argues the $430 billion Inflation Reduction Act, totake effect in January, could make the United States a worldleader in the electric vehicle market at Europe's expense. Itwants an exception to be made for EU products, as has alreadybeen agreed for Canadian and Mexican goods.

Czech industry and trade minister Jozef Sikela said all 27EU members were concerned and agreed the issue needed to beresolved quickly.

The two sides launched a joint taskforce in early Novemberto address the issue.

EU Trade Commissioner Valdis Dombrovskis told a newsconference that he and EU tech chief Margrethe Vestager wouldassess progress when they meet U.S. counterparts at the U.S.-EUTrade and Technology Council (TTC) on Dec. 5.

"These are no easy discussions, but they must produceconcrete solutions," he said, adding that in the currentgeopolitical context, with Russia's war in Ukraine, partnersshould build alliances in important sectors such as renewablesand batteries.

Some ministers earlier expressed hope for a solution by theDec. 5 meeting, but Dombrovskis said the taskforce would need tocontinue its work beyond then.

Dutch trade minister Liesje Schreinemacher said a fullyfledged trade war was in no one's interest.

"We didn't discuss a deadline, we need time to get out ofthis situation," she said.

Swedish counterpart Johan Forssell said the time frame wastight.

"We cannot wait too long until we make a decision... So Ithink the need for action will be pretty soon," he said.

French minister Olivier Becht said the U.S. green transitionshould allow for fair competition, rather than breach WorldTrade Organization rules and trigger a subsidy race. The actcould face a test at the WTO, although no member has yet broughta formal challenge.

"Is there then a concrete course towards answering the EU'swishes or will we unfortunately be falling short. And if we fallshort, we will have to put other options on the table," he said.(Reporting by Philip Blenkinsop; additional reporting by BenoitVan Overstraeten; editing by Mark Potter and Josie Kao)

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