欧盟-美国重要矿产协议：共同打造更强大的供应链-英

BRIEFING

EPRS|EuropeanParliamentaryResearchService

Author:MarcinSzczepański

Members'ResearchService

EN

PE754.617–November2023

EU-UScriticalmineralsagreementBuildingstrongersupplychainstogether

SUMMARY

InMarch2023,CommissionPresidentUrsulavonderLeyenandUnitedStates(US)PresidentJoeBidenannouncedtheirintentiontoconcludeacriticalmineralsagreement,seekingtofostersupplychainsinrawmaterialsneededintheproductionofelectricvehiclebatteries.Theparadigmshifttowardscleantransportisdrivingamassiveexpansioninthemarketforelectricvehiclemarkets,highlightingtheimportanceofsecuringthemineralinputsusedintheirbatteries.Tothatend,theUSCongresshasembeddedvarioussupportmeasuresinenactedlegislation,notablyinits2022InflationReductionAct(IRA).IRA'staxcreditprovisionsforelectricvehiclesareofparticularconcerntotheEuropeanUnion(EU).Toqualifyforthesesubsidies,setandprogressivelyincreasingpercentagesofmineralsandbatterycomponentsmustcomefromNorthAmericaoracountrywithwhichtheUShasafreetradeagreement.TheEUandUSsetupanIRAtaskforcetofindasolutionunderwhichEUvehiclescouldbeeligiblefortaxcredits.TheEU-USagreementwouldenablerelevantcriticalmineralsextractedorprocessedintheEUtocounttowardIRArequirements.

CommissionpresentedthenegotiatingdirectivestotheCouncilinJune,andthelatterauthorisedformallaunchoftalksinJuly.TheEUisseekingtostrengthentheinternationalsupplychainsofcriticalminerals,facilitatetrade,andimprovesustainabilityandlabourrights.Itisalsopushingfortheinclusionofmorethan50mineralsandmaterialsrelevanttothegreentransitionintheagreement'sscope.TheUShasexpresseditsintentiontoconcludeanexecutiveagreementwithoutavoteintheCongress,whichisdrawingsomecriticismfromUSlawmakers.TheEuropeanParliament,whichwilldecidewhethertogiveformalconsenttotheagreement,adoptedaresolutiononthenegotiationsinSeptember2023,callingforwidecoverageofminerals,inclusionofcriticalmineralsobtainedthroughrecycling,aninvestmenttransparencymechanism,andanearlywarningsystemagainstsupplychaindisruptions.

INTHISBRIEFING

>

Context

>

Batteriesandminerals

>

Firststeps

>

EU-USCriticalMineralsAgreement

>

Expertviews

EPRS|EuropeanParliamentaryResearchService

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Context

Theglobalmarketfo

relectricvehicles

(EVs)isbooming,withglobalsalesmorethandoublingyearonyearfrom2020to2021.Valuedat

US$384billion

in2022,itisexpectedtoswelltoUS$8.8trillionby2030,possiblyhittingasmuchas

US$56.7trillion

invalueby2050.

GoldmanSachsResearch

estimatesthatEVsaleswillsoarfromaround2millionin2020toabout73millionin2040.TheEUwillleadglobalsalesofelectricvehiclesandoverthenextfewyearsboththeUSandtheEUwillovertakeChinainmarketsalesratio(thepercentageoftotalvehiclesales).Whilein2020only2%ofvehiclessoldworldwidewereelectric,by2040thisfigurewillriseto60%.Electricvehicleswilllikelypassthemilestoneofaccountingforhalfofglobalsalesaround2035.Bythen,inmanydevelopedcountriestheshareofEVsalesisforecasttobewellover80%.

Thisboomis,andwillbe,largelydrivenbytheparadigm

policyshift

towardselectrificationandcleanenergysolutions.Governmentsacrosstheworldareseekingtocutemissionsastheyadopt

netzero

targetsforthecomingdecades.In2018theEUwasa

pioneer

insettingatargettobecomecarbonneutralby2050,amovefollowedbyotherdevelopednationssuchasthe

UnitedKingdom

(2019),

Canada

(2020)andthe

US

(2021).Reachingnetzeroisalsoagoalofthe

ParisAgreement,

whose

signatories

include193countriesandtheEU,notablyChinaandIndia,both

largeemitters

ofgreenhousegases,committedtobecomingcarbon-neutralby2060and2070,respectively.

Boostingcleantransportispivotalintheseefforts.TheEUhasembarkedonataskofprogressivephasingoutth

eCO2emittingcars

(carswithcombustionengines),asunderlinedbyitscommitmenttostopsellingsuchvehiclesby2035.ThenewCO2standardswillalsorequireaverageemissionsofnewcarstocomedownby55%,andofnewvansby50%,by2030.IntheUS,PresidentJoeBidenhassetanambitiou

snewtarget

forhalfofallnewcarssoldin2030tobezero-emission.

Batteriesandminerals

Thisglobalshifttowardsanelectricfutureintheautomotivesectorunderlinestheimportanceofsecuringthe

mineralinputs

usedinthebatteries(seeFigure1).

1

Thedominanttypeofrechargeablebatteriesusedinelectricvehiclesarelithium-ion(Li-ion).

2

Figure1–SelectionofrawmaterialsusedinLi-ionbatteriesandtheirfunction

Source

:EuropeanCommission

,2023.

Batteriesarethesinglemostexpensivecomponentofelectricvehicles,andtheirpricedependsontheircomplexityandmineralcontent.While

estimates

from2019to2021placedthecostofanEVbatterybetween30%and33%ofthetotalvehiclecost,technologicalprogressismakingthem

EU-UScriticalmineralsagreement

3

increasinglyaffordable,withsomenew(andplanned)

carmodels

'batteriesaslowas16%oftheirtotalcost.

AsevidentfromFigure1,sufficientsupplyofmostoftherawmaterialsusedintheLi-ionbatteriesischallenging.TenoutofelevenmaterialsfigureinEU's

2023listofcriticalrawmaterials.

Importantly,graphite,nickel,manganese,cobalt,lithiumandcopperhavebeendeemedtobe

'strategicrawmaterials

',owingtotheiruseinkeytechnologiesunderpinningthegreenanddigitaltransitions,resilienceandsecurity.Theyareexposedtoimportantgapsbetweenprojectedsupplyanddemand,anditwouldbechallengingtoboosttheirproductionandsourcing(seeFigure2).

Figure2–EUfuturedemandforbatterymaterials

N.B.:LDSdenotes'lowdemandscenario';HDSdenotes'highdemandscenario'.

Source:EuropeanCommission,JointResearchCentre

,2023.

Similarly,theUShas

identified

graphite,nickel,manganese,cobaltandlithiumas'criticalmaterialsforelectricvehicleandstationarystoragebatteries'.

Demand

forthesematerialsisboundtoincreasesignificantlyoverthenextfewdecades,whetherinthelowdemandscenario(LDS)orhighdemandscenario(HDS).

3

Inthelatter,thereareverystrongdemandincreasesfromthecurrentsupplylevelsforallthematerialsby2050,particularlyforgraphite(26x),lithium(21x)andnickel(16x).Strikingly,Chinadominatesglobalsupply:in2020itsproductionaccountedfor60%ofrefinedcobalt,93%ofgraphiteactivematerials(fromnaturalandsyntheticgraphite),69%ofrefinedlithium,79%ofbattery-grademanganeseand63%ofnickelsulphateproductioncapacity.BoththeEUandtheUSrelysignificantlyonimportsofthesematerials,albeitnotallaresourcedfromChina.

EPRS|EuropeanParliamentaryResearchService

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Table1–EUandUSimportrelianceandmainsuppliersofbatteriesmaterials,2021

EUimport

reliance*

USimportreliance*

EUmainsupplier

USmainsupplier

Cobalt

81%

69%

N/A**

Norway(20%)

Graphite

99%

100%

China(40%)

China(33%)

Lithium

100%

40%

Chile(79%)

Argentina(54%)

Manganese

96%

100%

SouthAfrica(41%)

Gabon(65%)

Nickel

75%

83%

Russia(29%)

Canada(54%)

*Importreliance=(Import–Export)/(Domesticproduction+Import–Export

**WhiletheCommissionstates'N/A'here,theDemocraticRepublicofCongosupplies63%oftheglobe'scobalt.

Datasource:Author'scalculationsbasedon

EuropeanCommission

,CongressionalResearchService

and

ObservatoryofEconomicComplexity

data.

Firststeps

TheBidenadministrationhasbeensupportingthetakeupandproductionofelectricvehiclesin

manyways

,mainlybystimulatingdemand,financingcharginginfrastructure,fundingthestrengtheningofmanufacturingcapacityandsupplychains–includingthroughprogrammes,andbyelectrifyingthefederalfleet.SimilarlytotheEU,theUSisexpectingasharpincreasein

battery

materialsdemand

,drivenmostlybytherisingelectricfleetpenetrationofthemarket(Figure3).Forexample,by2045demandfornickelisexpectedtogrowten-fold,lithiumnine-fold,andmanganesesix-fold.

Figure3–USbatterymaterialsdemand

Source

:WorldElectricVehicleJournal

,2021.

Inordertomeetthisdemand,Congresshasembeddedvarioussupportmeasuresinenactedlegislation,suchastheInfrastructureInvestmentandJobsAct

(H.R.3684).

4

However,itistheotherflagshipimitativeofPresidentBidenthathasgrabbedtheheadlinesinEurope–theInflationReductionAct(IRA)

(H.R.5376).Itwas

enacted,amongotherthings,toboostconsumerdemandfor

EU-UScriticalmineralsagreement

5

electricvehiclesandstrengthentheirsupplychains,includingthoseofbatteryminerals.TheIRAenablesstatefundingtoincentivisepurchasesofnewelectricvehicles,byofferingconsumersataxcreditofuptoUS$7500percar.

5

PriortotheIRA'senactmentinAugust2022,themajorityofUS-andforeign-manufacturedelectricvehicleswereeligiblefortaxcredits.Thiswassubjecttoacapof200000vehiclespermanufacturer.TheIRAremovedthiscapbutintroduced

newrequirements,

notablyrelatingtoassemblyandsourcing.

Tostartwith,inordertoqualifyforIRAtaxcredits,thefinalassemblyofvehiclesmusttakeplaceinNorthAmerica.TobeeligibleforafullUS$7500credit,vehiclesmustmeetsourcingrequirementsforboththecriticalmineralsandbatterycomponents.ThecarsthatmeetoneofthetworequirementsareeligibleforapartialUS$3750credit.Tofulfilthecriticalmineralrequirementthesetpercentageofthevalueofthecriticalmineralscontainedinthebatterymustbeextractedorprocessedin:(i)theUS,or

(ii)inacountrythathasafreetradeagreement(FTA

)withtheUS,or(iii)berecycledinNorthAmerica.Thispercentageforcriticalmaterialsincreasesfrom40%in2023to80%in2027,by10%eachyear.Tomeetthebatterycomponentrequirement,theapplicablepercentageofthevalueofthebatterycomponentsmustbemanufacturedorassembledinNorthAmerica.Thispercentagerisesinincrementalstepsfrom50%in2023to100%in2029.Startingin2024,aneligiblevehiclemaynotcontainanybatterycomponentsthataremanufacturedbya

foreignentityofconcern

,andfrom2025anycriticalmineralsthatwereextracted,processed,orrecycledbysuchentity.

WhiletheEUwelcomedthecommitmentoftheUStoaddressclimatechangeviaIRA,someaspects–particularlythoserelatingtotaxcredits–provoked

criticism

andfearsthatitwoulddrivetheEUfirmsacrossthepondsothattheycanbenefitfromthegovernmentalsupportinAmerica.InNovember2022,theEUsubmittedits

preliminarystance

ontheIRAtotheUSInternalRevenueService.ItexpressedconcernsovernineoftheIRA'staxcreditprovisions,underliningthat:'Whileeachofthesetaxprovisionsisproblematicbyitself,thepotentialforcumulativemarketdistortionandpossibleadverseeffectsisevengreater'.ThedisputesaroundtheIRAcastalongshadowoverthethirdministerialmeetingofthe

EU-USTradeandTechnologyCouncil

(TTC)inMaryland.Withinthe

TTCframework

,adedicated

EU-USTaskForceontheInflationReductionAct

waslaunchedinOctober2022toaddresstheEU'sconcernsinrelationtotheIRA.FollowingtheministerialmeetinginMarylandandtheworkdonebythetaskforce,someoftheEUconcernswereaddressed.On29December2022,theUSissued

guidance

reaffirmingthatEUcompaniescouldbenefitfromthecommercialcleanvehiclecreditschemeundertheIRA,withouttheneedforanychangestoEUproducers'establishedorenvisagedbusinessmodels.Thetaskforceconfirmedthatitwouldcontinueworkingtofindfurthersolutions,forexamplebyenablingtheEUtobetreatedinthesamewayasUSFTApartners.Inparallel,theEUannounceditsintentiontoestablisha

CriticalRaw

MaterialsClub

forlike-mindedcountrieswillingtoboosttheirsupplychains.Theclubisexpectedtobe

inaugurated

in2023.

EU-UScriticalmineralsagreement

EuropeanCommissionPresidentUrsulavonderLeyenandUSPresidentJoeBidenmetintheWhiteHouseon10March2023.Intheir

jointstatement

theystatedtheirwillingnesstodeepen'cooperationondiversifyingcriticalmineralandbatterysupplychains,recognisingthesubstantialopportunitiesonbothsidesoftheAtlantictobuildoutthesesupplychainsinastrong,secure,andresilientmanner'.TheyaddedthattheirintentionwasanagreementenablingrelevantcriticalmineralsextractedorprocessedintheEUtocounttowardrequirementsforcleanvehiclesinthe

Section30D

cleanvehicletaxcreditoftheIRA.Theagreement'sobjectivewouldbetofurtherthesharedgoalsofboostingmutualmineralproductionandprocessingandexpandingaccesstosourcesofcriticalmineralsthataresustainable,trusted,andfreeoflabourabuses.Thepartnerswouldcooperatetoreduceunwantedstrategicdependenciesinsupplychains,andtoensurethatsupplychainsarediversifiedanddevelopedwithtrustedpartners.

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On10March2023,theUSforwardedaproposalforacriticalmineralsagreement(CMA)totheCommission,whichsubsequentlytransmittedittotheCouncilandParliamenton21March2023.Followingthis,on31March2023,theUSTreasuryDepartmentpublisheda

noticeofproposed

rulemaking

,makingitclearthattheBidenadministrationwastreatingtheCMAasanewcategoryofFTA,forthepurposesoftheIRAtaxcredits.

On14June2023,theCommissionadopteddraft

negotiatingdirectives

foracriticalmineralsagreementwiththeUS.TheoverallobjectiveistosupportdevelopmentofEU-USsupplychainsincriticalrawmaterialsneededintheproductionofelectricvehiclebatteries.

Inthecontextoftherecommendationfora

Councildecision

authorisingtheopeningofnegotiations,theCommissionarguesthattheprovisionsofIRAoncleanvehiclecreditsareincreasinglyexcludingEU-originatingcriticalminerals,whichishavinganegativeeffectontheEU'sexportpossibilities.ThevalueofEUexportsofrelevantcriticalmineralstotheUSwas€8.3billionin2022,representing16.3%oftotalEUexportsofthesecommodities.TheFTApartnersoftheUSdonotencountersuchobstaclesundertheIRA.

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TheCommissionalsonotesthat'theUShasmadeclearthattheconclusionofaCMAisneededtogranttheEUequivalentstatustoUSfreetradeagreementpartnersforthepurposeofthecleanvehiclecredit'.

Notably,therewasnoEUimpactassessmentoftheproposal,giventhepoliticalimperativetomoveaheadswiftlyinordertominimisetransatlantictradetensionsintheaftermathoftheIRA,andtoensurethatmineralsextractedorprocessedintheEUwouldqualifyforcleanvehicletaxcreditsassoonaspossible.TheCommissionalsounderlinedthattheproposalwasinlinewiththepositiveeconomicagendaoftheTradeandTechnologyCouncil(TTC)aswellaswiththeproposed

critical

rawmaterialsact

of16March2023,designedtoboostEUcooperationwiththirdcountries.Suchpartnershipsseektostimulate'sustainableinvestmentsincriticalrawmaterialvaluechainsandothercomponentsdownthevaluechain'.TheideaofaCMAisalsoconsistentwiththeproposed

netzeroindustryact

,whichaimsto'scaleuptheEUmanufactureofkeycarbonneutralortechnologiestoensuresecure,sustainableandcompetitivesupplychainsforcleanenergyinviewofreachingtheEU'sclimateandenergyambitions'.

Accordingtothe

directivesfornegotiation

,theCMAshould:

>containprovisionsonstrengtheninginternationalsupplychainsofcriticalminerals;

>becompliantwithWorldTradeOrganizationrulesandinlinewiththeEuropeanBatteryAllianceandtheproposedcriticalrawmaterialsact;

>strengthenthetradeinanddiversificationofinternationalsupplychainsofcriticalmineralsandpromotetheadoptionofelectricvehiclebatterytechnologies;

>ensurerobusttrade-relatedlabourandenvironmentalstandardsinsupplychainsofcriticalminerals,andcooperationineffortstoensurethattheyaresecure,sustainable,andequitable.

Tofacilitatetrade,theCMAshould:

>expandaccesstosourcesofcriticalmineralsthataresustainable,trustedandfreeoflabourabuses,andpromotefaircompetitionandmarket-orientedconditionsfortradeincriticalminerals;

>aimtobuildasharedunderstandingofdistortivenon-marketpoliciesandpracticesincriticalminerals,aswellasotherrelatedsectorsanddevelopcoordinatedactiontofostersupplychaindiversification,reducevulnerabilities,andde-riskstrategicdependencies.

Toimprovesustainability,theCMAshould:

>encouragecooperationinongoingworkincludingoninternationalstandardsforcriticalmineralslifecycleassessment,extraction,labellingandrecycling;

>promotehighlevelsofenvironmentalprotection;

EU-UScriticalmineralsagreement

7

>highlighttheroleofmultilateralenvironmentalagreements;

>encourageresourceefficiencyandcirculareconomytoreducethedemandfor,and

environmentalimpactof,criticalmineralsextractionandrelatedprocesses.ThelabouraspectsoftheCMAshould:

>promotehighlevelsofworkers'protection,includingagainstanyemploymentdiscriminationinaccordancewiththeInternationalLabourOrganization'sfundamentalprinciplesandrightsatwork.

Theagreementalsoneedstogiveexplicitrecognitiontotheimportanceofconsultingwithawiderangeofstakeholdersontradepolicyrelatedtocriticalmineralssupplychains,includinglabour,environmentalandbusinessorganisations,representativesofSMEs,andcivilsocietyorganisations.Itshouldrecognisetheimportanceofcontinuedbilateralandplurilateraleffortstostrengthensustainableandequitablesupplychains.Tothatend,theEUandtheUSwillcooperatewitheachotherandinrelevantforums.Notably,thedirectivesdonotcontainprovisionsonenforcementordisputesettlement.

On20July2023,the

Council

adoptedadecisionauthorisingtheCommissiontoopenCMAnegotiations,onbehalfoftheEU,withtheUS–aswellastherelatednegotiatingdirectives.Followingthis,theCommissioncommencedformalnegotiationswithaviewtoconcludingtheagreementinthenearterm.SpeakingtotheINTAcommitteeinJuly2023,MatthiasJørgensenfromth

eEuropeanCommission

saidthattheproposalforCMAsubmittedbytheUScoversfiverawmaterials,namelycobalt,graphite,lithium,magnesium,andnickel,withtransatlantictradewortharound€1billion.However,theCommissionwishestheCMAtocoverall50ofthe

materialslistedintheIRA

(tradeworth€23billion),aswellascopper,osmium,phosphorus,silicon,strontiumandboron.

Somestickingpointsinnegotiationsare:(i)Washington'sdemandthatthepartiesnotifyeachotherofspecificinvestmentsinthecontextoftheirrespectiveinvestmentscreeningmechanisms(notpossibleunderEUlaw);(ii)theideathatbothpartiesshouldtogetherworktoaddressconcernsofspecificworkersaffectedbylabourlawviolations(notwithinEUcompetence);(iii)thatpartieswill'promote

employerneutrality

inunionorganisationandoperation'(notanEUcompetence),and(iv)theUSinterpretationofnationalsecurityexceptionsisdivergentfromthe

WTO

one,whichistheonlyoneacceptabletotheEU.

Oncethenegotiationshavebeenfinalised,theagreementwouldneedtobeadoptedbytheCouncil.Importantly,theCMAwouldalsorequirethe

consent

oftheEuropeanParliament.

US-JapanCMA

ThefirstandsofaronlyUS

CMA

wassignedwithJapanon28March2023.Itdefined'criticalminerals'ascobalt,graphite,lithium,manganese,andnickel.Thepartiescommittednottorestricttheimportorexportofcriticalmineralsorimposeexportduties.Theyagreedtoconsultonpotentialdomesticmeasurestoaddressthosenon-marketpoliciesandpracticesofothercountries,whichaffecttradeincriticalmineralsandtheirsupplychains.Similarly,theypledgedtoexchangebestpracticesonreviewofforeigninvestmentsintheircriticalmineralssectors.Theyalsoagreedtopromotemarket-orientedconditionsandcompetition.

Furthermore,theypledgedtodevelopsustainablecriticalmineralsupplychainsthroughworkoninternationalstandardsonlabellingandrecycling,improvingdomesticenvironmentalprotectionlawsforcriticalminerals,ensuringresponsiblesourcing,evaluatingtheenvironmentalimpactofcriticalmineralsprojects,andpromotingcirculareconomy,amongothers.Theyalsohighlightedtheirintentiontoengagein,shareinformationon,andundertakeenforcementactionsrelatingtolabourrightsincriticalmineralsextractionandprocessingsectors.Th

eUS

an

dJapan

alsodecidedto

cooperate

todiscouragetheimportationofgoodscontainingcriticalmineralsproducedusingforcedlabour.Thisexecutiveagreemententeredintoforceuponsignaturewithou

tCongressapproval.

EPRS|EuropeanParliamentaryResearchService

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MineralSecurityPartnership(MSP)

The

MSP

wassetupin2022tocatalysepublicandprivateinvestmentinresponsiblecriticalmineralssupplychainsglobally.TheMSPpartnersare:Australia,Canada,Finland,France,Germany,India,Italy,Japan,Norway,SouthKorea,Sweden,theUnitedKingdom,theUSandtheEU(representedbytheCommission).

TheobjectiveoftheMSPistospeedupthedevelopmentofdiverseandsustainablecriticalmineralssupplychains(relevantforcleanenergytechnologies),bycooperatingwithhostgovernmentsandindustry.TheMSPoffersfinancialanddiplomaticsupportforstrategicprojectsalongthewholecleanenergyvaluechain:frommining,extraction,andsecondaryrecovery,toprocessing,refining,andultimately,recycling.Itprioritiseslithium,cobalt,nickel,manganese,graphite,rareearthelements,andcopper,butothermineralsarenotexcluded.Itsmain

avenuesofaction

areenhancedinformationsharing,investmentinsupplychainscharacterisedbyhighenvironmentalandsocialgovernancestandards,andthedevelopmentofrecyclingtechnologies.

Expertviews

The31st

GlobalTradeAlertReport

examinestheUS-JapanCMAcriticallyhighlightingthatitisanexecutiveagreementintheUS,whichcanbeterminatedwith90days'writtennotice.Itarguesthat'noprivatesectorinvestorintheextractionorprocessingofcriticalmaterialswillbeaffordedmuchcomfortbythisAgreement'.Itis,accordingtothereport,'difficulttoseehowaccordslikethisaregoingtoreducethesignificantinherentpolicy-relatedrisksassociatedwithmulti-yearinvestmentsincriticalrawmaterialssectors'.

JenniferHarris

,formerSeniorDirectorforInternationalEconomics&LaborontheUS

NationalSecurity

Council

,arguedthatwhileUSagreementswithJapanandEU'offerapromisingopening',theyarenotenoughtomeetskyrocketingdemand.TheUSanditspartnersshouldco-operatetoboostoverseasproductionandtheyshouldbringminerals'exporterstothenegotiatingtableandofferthemincentivestoexpandproductionresponsibly.Otherwise,bringingtogetheronlybuyersrisksleadingtothecreationofOPEC-stylecartelsamongtheproducers.

GlobalPolicyWatch

hashighlightedthataCMAthatdoesnothaveCongressionalapprovalisdrawing

criticism

fromlawmakers.ItaddsthattheCMAwithJapansetaprecedentforthesetypesofagreements.IftheCMAwiththeEUissimilar,itwillbeverynarrowinscope–theagreementwithJapancoversonlyfivecriticalmineralswhilethereare50coveredundertheIRA.

The

CongressionalResearchService

hasassessedthattheCMAnegotiationswiththeEUmayposeanumberofoversightandlegislativeissues.Firstly,whiletheagreementmaygivepartnersmorecommongroundtoaddresschallengesofsharedconcerntogether,italso'couldbealostopportunityforthemtomakemoreambitiouscommitmentsthroughconcessionsinbroader-basedtradenegotiations'.Secondly,alimitedscopeoftheCMAwhencomparedwithanFTAmaygiverisetopotentialWTOdisputesorunilateralretaliationfromothercountries.Thirdly,lackofCongressional

oversight

maybeasignoftheBidenadministrationlimitingthelegislature'sroleinUStradepolicy,whichiscausingbacklashfrompolicymakers.

Lawfirm

White&Case

maintainsthattheEUisseekingtokeeptheCMAwiththeUSunderit

sexclusive

competence

toavoidapotentiallylengthyprocessfornegotiationandratificationoftheagreement.ItalsoarguesthatthisisechoedintheEU'smandate,whichincludesanexplicitcommitmentto'facilitatetradeandexpandmarketaccess',whilethewordingonlabourandsustainabilityaspectsismuchsofter.Thelawyerssuggestthatincontrast,theUSisinterestedinincludingmorebindingcommitmentsintheCMAwiththeEUcomparedwiththeCMAwithJapan,asUSlawmaker

scriticised

thelackofsuchmeaningfulprovisionsinthelatter.Reportedly,theUSisthereforeseekingmeaningful

binding

commitments

fortheCMAwithEUinorderforittoqualifyasanFTA.SofarthereishowevernoplantoputittothevoteinCongress.

EU-UScriticalmineralsagreement

9

EuropeanParliament

TheEuropeanParliamentadopteda

resolution

onthe'openingofnegotiationsofanagreementwiththeUnitedStatesofAmericaonstrengtheninginternationalsupplychainsofcriticalminerals'on14September2023.MEPswelcomedthelaunchofnegotiationsontheCMAandunderlinedthatitshouldfullyrespecttheEUclimateandsustainabilityacquis.Thefutureagreementshouldalsofostersupplychaindiversificationandde-risking,andreducevulnerabilitiesandunwantedstrategicdependencies.TheEuropeanParliamentcalledonbothpartiestoagreethatallmineralslistedintheIRAarecovered,andtodefinethelistofsectorsconnectedwiththecriticalminerals