The U.S. and the European Union announced recently an action plan that will serve as the primary bilateral mechanism to coordinate trade policies and measures on critical minerals supply chains. Similar plans have been concluded with Mexico and Japan.
The U.S. is pursuing action plans like this as part of a broader effort to negotiate a plurilateral agreement on trade in critical minerals. Earlier this year Vice President J.D. Vance said this initiative “will establish reference prices for critical minerals at each stage of production” that “will operate as a floor” and will be “maintained through adjustable tariffs.” Vance added that these prices would remain consistent with the goal of eventually creating “diverse centers of production, stable investment conditions, and supply chains that are immune” to external disruptions.
Toward that end, the U.S. and EU intend to discuss the feasibility and development of coordinated trade policies and mechanisms, including market and trade measures based on reference prices, such as border-adjusted price floors, standards-based markets, price gap subsidies, or offtake-agreements, focusing first on mutually-agreed select critical minerals and associated supply chains.
The two sides also intend to consider other provisions to ensure supply chain resilience, which could include (1) trade measures to support a resilient critical minerals marketplace among the contracting parties, (2) standards for mining, processing, recycling, or trade in critical minerals, (3) technical and regulatory cooperation, (4) investment promotion and screening cooperation, (5) coordinated rapid responses to prevent disruptions and crises in critical minerals supply chains, including from third countries, (6) research and development cooperation on critical minerals technologies, and (7) stockpiling cooperation.
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