Debate: Opening of negotiations of an agreement with the United States of America on strengthening international supply chains of critical minerals
Date: WEDNESDAY, 13 SEPTEMBER 2023
Speaker: Elisa Ferreira
Language: EN

An important element of this is a strong and balanced trade relation. The conclusion of a critical minerals agreement between the European Union and the United States would offer us an opportunity to advance on these objectives. The conclusion of the agreement would offer two trade-related benefits. The first one is linked to the United States Inflation Reduction Act. This act contains special trade opportunities for critical minerals originating from United States free trade agreement partners. The conclusion of a targeted critical minerals agreement would allow the European Union to receive the same preferential treatment under the Inflation Reduction Act as such United States free trade agreement partners. This preferential treatment would especially benefit European Union mining and chemical companies. The European Union’s mining and chemical sectors will be able to benefit from the price premium paid for extracted and processed minerals in the United States. The second benefit comes from the trade facilitation commitments in the agreement itself. They will make it easier and more predictable to trade across the Atlantic in the critical minerals covered by the agreement. This will support the creation of resilient European Union–United States supply chains in critical raw materials, offering all European Union industrial sectors reliant on these inputs more security of supply and better business opportunities in the United States. There has been the question – you have just put it – if the agreement will also benefit European Union recycled materials. It is the Commission’s view that the European Union’s recycling sector has an essential role in the net-zero and circular economy transition. We therefore aim to ensure that the trade facilitation provisions in the critical materials agreement which we are negotiating with the United States also covers recycled minerals. However, the United States Inflation Reduction Act’s provisions specifically limit the acceptable origin of recycled minerals to North America. Therefore, it is unlikely that we will be able to change this limitation through the critical minerals agreement, which would require, in fact, a legislative change in the United States. Any discussions on how European Union recycled minerals could possibly benefit from the preferential treatment in the Inflation Reduction Act will, therefore, at least for now, take place outside the negotiation of the critical minerals agreement. It is one of the issues which we will take up in the Clean Energy Incentives Dialogue with President von der Leyen and President Biden, launched on 10 March. In response to Parliament’s question, the Commission would also like to confirm that, indeed, our clear objective is to negotiate an agreement that fully respects the European Union’s existing international obligations, notably under the World Trade Organisation. The European Union proposal for such agreement submitted to the United States on 1 August, and shared with Parliament beforehand, reflects exactly this. There have been also questions linked to the exact list of minerals covered by the agreement. The Commission is seeking that the agreement covers the broadest list of critical minerals and critical raw materials possible. We have therefore proposed to add more minerals to the list proposed by the United States, taking into consideration the list of critical and strategic materials identified in the Critical Raw Materials Act. The exact list of minerals will need to be established as a result of the negotiations with the United States. However, it must be noted that, in the agreement that the United States struck with Japan, only minerals that are key for electrical vehicles are listed. The Commission would also like to emphasise that the conclusion of the agreement will be supportive to the overarching European Union objective of a critical raw materials club.