New EU Rules Could Lead to Critical Minerals Deal with US
EU Trade Chief Optimistic About Prospects for Critical Minerals Deal
In a recent statement, EU trade chief Valdis Dombrovskis expressed optimism about the potential for a critical minerals deal with the United States following the implementation of new European Union rules banning products made using forced labor.
Brussels Eager to Secure Deal on Critical Minerals
Brussels has been eager to secure a deal with Washington that would allow critical minerals mined or processed in Europe to qualify for U.S. clean vehicle tax breaks under the Inflation Reduction Act (IRA).
Challenges in Concluding an Agreement
Despite efforts, the United States and the EU have so far failed to conclude an agreement on critical minerals at the recent Trade and Technology Council. One of the key issues is the commitment to labor standards, including U.S. desires for site inspections to ensure compliance.
Progress in Negotiations
Dombrovskis mentioned that progress is being made in negotiations, with the possibility of reaching a deal this year. Both the EU and the United States are aligned on labor rights and the elimination of forced labor, making a potential agreement feasible.
EU’s New Legislation on Forced Labor
The EU is set to implement a new law on forced labor this year, with the European Commission leading investigations into alleged forced labor outside the EU. National authorities will also investigate infractions within their countries, leading to product withdrawal if allegations are confirmed.
Importance of the Minerals Deal
Although the deal may not have significant monetary value due to limited mining and processing in the EU, it holds importance in terms of supply chain status. The deal could see the EU treated similarly to Canada and Mexico, signaling to the industry about the EU’s status.
