[KITA News] E.U.-Must establish a minerals agreement with the U.S. to engage in fair competition

                                                    

E.U.-Must establish a minerals agreement with the U.S. to engage in fair competition

E.U.: “Must establish a minerals agreement with the U.S.

in order to engage in fair competition

with third countries like S. Korea”

 

E.U.: “Must establish a minerals agreement with the U.S.

in order to engage in fair competition

with third countries like S. Korea”

 

Discussions going underway for minerals agreement between the E.U. and U.S.

for resolution of concerns regarding the IRA…

E.U. arranges official negotiation guidelines

 

The European Union argued that “fair competition” with third countries such as S. Korea would only be possible if companies within Europe could be able to receive EV subsidy benefits as per the U.S. Inflation Reduction Act.

 

On June 14 (local time), the European Commission revealed that official negotiation guidelines had been adopted related to the Critical Minerals Agreement which was being pursued for establishment with the U.S. in order to ease concerns over the IRA.

 

The adopted guidelines refer to the document which contains the formal position that the E.U. will assert in the future process of discussion of the agreement with the U.S.

 

The European Commission announced that it plans to negotiate so that the critical raw materials extracted and processed in the E.U. could be included as a target for subsidy assistance pursuant to the “Provisions on tax credits for clean automobiles” of the Inflation Reduction Act which contain the terms of the tax credits for EVs.

 

The European Commission explained that “If a Critical Minerals Agreement is established with the U.S., the E.U. will receive the same status as countries that are FTA partners of the U.S., according to the IRA.”

 

Notably, it emphasized that “If that happens, E.U. companies will be able to compete under fair standards in the U.S. market with the U.S. and third country competitors such as Chile, S. Korea and Japan.”

 

Moreover, it gave meaning by saying that the establishment of a Minerals Agreement with the U.S. would increase the E.U.’s production capacity in strategically important industries, as well as help in strengthening the driving force for legislation that the E.U. is pursuing independently, such as the Net Zero Industry Act and the Critical Raw Materials Act.

 

In order to receive tax benefits for EVs under the IRA, a company must procure the critical minerals that go into making a battery, such as lithium, nickel, manganese, graphite and cobalt, from an FTA partner country of the U.S.

 

As a result, the E.U. and Japan, that, unlike S. Korea, do not have an FTA with the U.S., expressed discontent, and the Biden Administration established a separate Critical Minerals Agreement with Japan, granting it the status of a “FTA partner”.

 

The E.U. is expected to push for the final establishment of an agreement with the U.S. based on these negotiation guidelines.

 

(Provided by Yonhap News)

By - KITA.Net (http://kita.org/about/newsView.do?id=&no=2794&searchWrd=&pageIndex=1)