EU-US Mineral Deal Potential Boosted by New Forced Labor Rules
EU regulations could lead to a breakthrough in critical minerals discussions between the EU and the US
Prospects of a Deal
In a recent statement, EU trade chief Valdis Dombrovskis expressed optimism about the possibility of striking a deal with the United States on critical minerals. These discussions have been fueled by new EU regulations that prohibit products made using forced labor.
Key Considerations
Brussels has been actively pursuing an agreement with Washington to allow critical minerals mined or processed in Europe to qualify for US clean vehicle tax incentives. Despite the recent failure to reach an accord at the Trade and Technology Council, both parties are committed to aligning labor standards and eradicating forced labor.
Progress and Challenges
Dombrovskis highlighted that negotiations are progressing positively, emphasizing the shared commitment to labor rights. However, challenges remain, including the US’s demand for on-site inspections to ensure compliance with labor standards.
Enforcing Labor Standards
The EU is set to implement a law targeting forced labor this year. The European Commission will oversee investigations into alleged forced labor outside the EU, with national authorities handling cases within their jurisdictions. Products found to be associated with forced labor will be removed from the market.
Importance of the Deal
While the economic impact of the potential mineral agreement may not be significant due to limited mining and processing capabilities in the EU, it symbolizes a step towards greater supply chain recognition akin to Canada and Mexico.
Image source: © Reuters.
