EU and US Expected to Reach Deal on Critical Minerals, Despite Steel and Aluminium Impasse
Trade Negotiations Progress: French Trade Minister Olivier Becht expressed optimism on Friday, stating that the European Union (EU) and the United States (US) could potentially reach an agreement on critical minerals in the coming weeks or months. While discussions on steel and aluminium tariffs have hit a roadblock, both sides remain hopeful for a resolution on a different front.
Missed Deadlines: Originally, US and EU trade negotiators aimed to reach an agreement on ending the Trump-era metals tariffs and mitigating the impact of the US Inflation Reduction Act (IRA) before a meeting between US President Joe Biden and top EU officials. However, due to the complexity of the issues discussed, the meeting is now expected to focus primarily on the Middle East crisis.
Disappointment and Hope: French Trade Minister Olivier Becht expressed disappointment over the slow progress in negotiations but remained positive about future discussions. He emphasized the importance of restarting talks as soon as possible. Becht believes that an agreement is likely to be reached in the next few weeks or months, ensuring that critical minerals sourced from Europe for electric vehicle batteries will be eligible for consumer tax breaks under the IRA.
Mutual Interest: Becht stated that an agreement on critical minerals would be mutually beneficial for both Europe and the United States. The deal would contribute to the growth of the electric vehicle industry and promote sustainable practices in the mining sector.
Unresolved Tariffs: While the United States has temporarily suspended import tariffs on EU steel and aluminium, conditions for their removal include implementing measures to address overcapacity in non-market economies like China and encouraging the production of greener steel. The negotiators initially set an end-October deadline, which has now been extended to the end of the year due to disagreements.
Challenges Ahead: The main point of contention lies in whether the EU should apply the metal tariffs to imports from China. Washington insists on this condition, while Brussels maintains that it cannot do so until it completes a year-long investigation to comply with World Trade Organization rules.
In conclusion, despite the impasse in steel and aluminium negotiations, there is hope for progress in reaching an agreement on critical minerals between the EU and the US. Both sides recognize the importance of a deal that supports the electric vehicle industry and promotes sustainable mining practices. Although challenges remain, the discussions are expected to resume and focus on finding common ground.
