US-EU Critical Minerals Agreement (CMA)

Summary:

Information Guide focusing on information sources covering a forthcoming bilateral agreement between the United States of America (USA) and the European Union (EU) on critical minerals.

Further information:

In August 2022, the USA enacted the Inflation Reduction Act (IRA), amending the country's Internal Revenue Code relating to the Clean Vehicle Credit. This became a subsidy for the purchase of qualifying battery or fuel cell operated vehicles in the form of a tax credit. To qualify for the maximum amount of the subsidy, a vehicle must inter alia be equipped with a battery that has a minimum critical mineral context share being extracted and processed in the USA (or a country with which the USA has a free trade agreement in force) or recycled in North America.

The Clean Vehicle Credit increasingly excluded EU-originating critical materials and processed materials for automotive batteries from USA supply chains. In March 2023, the President of the European Commission and the President of the USA issued a joint statement indicating their intention to launch negotiations on a targeted EU-US CMA to ensure that minerals extracted or processed in the EU could be used in vehicles eligible for the Clean Vehicle Credit. The Agreement is necessary to grant the EU equivalent status to US free trade agreement partners for this purpose.

The USA forward the proposal for a CMA on 10 March 2023. The European Commission forwarded it to the EU co-legislators on 21 March. A Recommendation for a Council Decision adopting negotiating guidelines for the talks between the EU and the USA was tabled by the Commission on 14 June, and adopted by the Council on 20 July.

Official

European Commission: EU Trade Relationships: United States https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/united-states_en

United States of America: White House Briefing Room: Joint Statement by President Biden and President von der Leyen (10 March 2023) https://www.whitehouse.gov/briefing-room/statements-releases/2023/03/10/joint-statement-by-president-biden-and-president-von-der-leyen-2/

EUR-LEX: COM(2023)327: Recommendation for a Council Decision authorising the opening of negotiations of an agreement with the United States of America on strengthening international supply chains of critical minerals https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2023:327:FIN

European Commission: Press Release, 14/06/2023: EU moves forward with Critical Minerals Agreement negotiations with the US https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3214

Renew Europe EP Group: Newsroom, 19/07/2023: Critical minerals: a rapid deal with the US can reduce our strategic dependencies https://www.reneweuropegroup.eu/news/2023-07-19/critical-minerals-a-rapid-deal-with-the-us-can-reduce-our-strategic-dependencies

Council of the European Union: Press Release, 20/07/2023: Trade with the United States: Council authorises negotiations on EU-US Critical Minerals Agreement https://www.consilium.europa.eu/en/press/press-releases/2023/07/20/trade-with-the-united-states-council-authorises-negotiations-on-eu-us-critical-minerals-agreement/

EUR-LEX: OJ L190, 28/07/2023: Council Decision (EU) 2023/1560 authorising the opening of negotiations with the United States of America for an agreement on strengthening supply chains for critical minerals http://data.europa.eu/eli/dec/2023/1560/oj

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News

Le Monde, 10/03/2023: US and EU begin negotiations on critical minerals access for EV batteries https://www.lemonde.fr/en/international/article/2023/03/10/us-and-eu-begin-negotiations-on-critical-minerals-access-for-ev-batteries_6018894_4.html

Reuters, 23/03/2023: U.S. lays out possible critical raw materials agreement with EU - Handelsblatt https://www.reuters.com/business/us-lays-out-possible-critical-raw-materials-agreement-with-eu-handelsblatt-2023-03-23/

EurActiv, 14/04/2023: EU seeks quick critical minerals deal with US: official https://www.euractiv.com/section/circular-economy/news/eu-seeks-quick-critical-minerals-deal-with-us-official/

Bloomberg, 28/04/2023: US-EU Critical Minerals Deal Would Give EU Broader Trade Relief https://www.bloomberg.com/news/articles/2023-04-28/us-eu-critical-minerals-deal-would-give-eu-broader-trade-relief

Politico, 21/05/2023: U.S. pumps the brakes on EU clean car deal https://www.politico.com/news/2023/05/21/us-eu-clean-car-deal-00098092

Reuters, 10/07/2023: U.S. should reach minerals deal with EU this year, U.S. official says https://www.reuters.com/markets/commodities/us-should-reach-minerals-deal-with-eu-this-year-us-official-2023-07-10/

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Commentary and Analysis

US Congressional Research Service (CRS): Insight, 14/04/2023: Critical Minerals: A U.S.-EU Free Trade Agreement? https://www.everycrsreport.com/reports/IN12145.html

White&Case: Alerts, 28/06/2023: Will the United States’ New Critical Minerals Agreements Shape Electric Vehicle Investments? https://www.whitecase.com/insight-alert/will-united-states-new-critical-minerals-agreements-shape-electric-vehicle

Center for European Policy Analysis (CEPA): Insights & Analysis, 29/06/2023: Losing the Transatlantic Battle for Critical Minerals? https://cepa.org/article/losing-the-transatlantic-battle-for-critical-minerals/

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