US-EU Critical Minerals Deal Would Give EU Broader Trade Relief

Posted on April 28, 2023 by Nanthakumar Victor Emmanuel, P.Eng Leave a comment

An agreement between the US and the European Union over critical minerals would unlock wider benefits than previously thought, with a deal paving the way to remove several more trade barriers introduced by President Joe Biden’s massive green subsidy law, according to people familiar with the matter.

An accord would essentially allow EU companies to take advantage of some of the benefits in the Inflation Reduction Act on the 50 minerals defined as critical in the law, said the people who spoke on the condition of anonymity.

The Biden administration has said that nations with trade agreements with the US will be able access some of the IRA’s benefits, which will offer some $369 billion in handouts and tax credits over the next decade for clean-energy programs in North America. If the minerals accord is passed, it would act as the equivalent of a free-trade agreement and that status would in turn enable electric vehicles containing EU-extracted and processed critical minerals to be eligible for IRA subsidies, the people said.

The US Trade Representative’s office declined to comment.

An early draft of the EU-US minerals agreement lists five minerals — cobalt, graphite, lithium, manganese and nickel — covered by that standalone accord, Bloomberg previously reported. Such a deal would echo one that the Biden administration signed last month with Japan.