Transatlantic relations are not at their best, but the European Commission has not given up on negotiating a Memorandum of Understanding with the United States to establish a strategic partnership on rare materials.
While the institution has already initiated around 15 such arrangements, enabling trading partners to buy raw materials at more favourable prices - the most recent having been agreed with South Africa, Canada and soon Brazil - Member States’ experts, meeting on Monday 12 January in the Working Party on Competitiveness and Growth, will be asked to tell it whether they want to finalise these negotiations, at a time when tensions have increased between the two partners in recent months, and when recent US wishful thinking about Greenland, particularly with regard to mineral resources, have not helped matters.
This idea of a Memorandum of Understanding and an agreement on raw materials was born in the wake of the US Inflation Reduction Act (IRA), enacted by Joe Biden in 2022 and which had worried Europeans, fearing among other things that the European car industry would leave for the United States (see EUROPE 13116/5, 13138/21) thanks to this tax credit for clean vehicles.
To qualify for the maximum subsidy, a vehicle had to be equipped with a battery in which at least some of the critical minerals were recycled in North America or extracted and processed in the United States, or in a country that has concluded a free trade agreement or a global market agreement (GMA) with the United States.
Agreed between Ursula von der Leyen and Joe Biden, the conclusion of a targeted agreement on critical minerals should enable the critical minerals concerned, extracted or processed in the EU, to be taken into account when calculating certain eligibility criteria for the clean vehicle tax credit under the IRA, and to contribute to the development of EU-US supply chains.
The idea is still to consolidate these supply chains, and the Trump administration is said to have recently expressed renewed interest in such a scheme and to have sent a number of signals in this direction to the Europeans.
The United States, which has embarked on a frenetic race to reduce all its dependence on raw materials, is, for example, dependent on the EU for specific mineral raw materials such as helium, ores (iron) and certain clays and zeolites.
In the Commission’s view, the logical thing to do at present would be to seek to give concrete form to this Memorandum of Understanding and this future agreement in an attempt to calm the current transatlantic situation. The increasing number of initiatives of this type also seems to it to be even more relevant at a time when the EU is preparing to set up its European Centre for Raw Materials.
In any case, a G7 meeting will focus specifically on rare materials, on Monday 12 January in Washington, which Commissioner Valdis Dombrovskis will be attending. (Original version in French by Solenn Paulic)