#EuropeanUnion #ForcedLabour #CriticalMinerals #USCleanVehicle #InflationReductionAct #TradeAndTechnologyCouncil #LabourStandards #EUTradePolicy
The European Union’s new rules aimed at banning products manufactured through forced labour are setting the stage for potentially finalizing a critical minerals deal with the United States, as indicated by EU Trade Commissioner Valdis Dombrovskis. This development arises amidst a fervent pursuit by Brussels to forge an accord with Washington. The agreement would enable critical minerals, which are mined or processed within Europe, to comply with the specifications for clean vehicle tax incentives outlined in the U.S.’s Inflation Reduction Act (IRA).
Despite concerted efforts, the United States and the EU did not reach a conclusive agreement during the recent two-day Trade and Technology Council summit. A pivotal stumbling block in the negotiations has been the United States’ insistence on labor standard commitments, including the capacity to conduct inspections at individual sites to ascertain compliance.
Dombrovskis remains optimistic about the progression of the negotiations, suggesting that a resolution could be reached within the year. Both the EU and the United States share robust commitments towards upholding labor rights and eradicating forced labour. The introduction of the EU’s forthcoming legislation targeting forced labour could offer new avenues to bridge legal gaps between the two jurisdictions.
Set to be enforced this year, the EU’s law against forced labour will empower the European Commission to undertake inquiries into suspected forced labour practices occurring outside the EU, while national authorities will oversee investigations within their jurisdictions. Products implicated in confirmed cases of forced labour will face withdrawal from the market.
Although the potential minerals deal, encompassing vital resources like cobalt, graphite, lithium, manganese, and nickel, may not represent a significant financial venture due to the EU’s limited mining and processing capabilities, it holds strategic importance. As articulated by an EU official, the agreement would not only enhance the EU’s status in global supply chains, likening it to that of Canada and Mexico but also send a compelling message to the industry concerning the EU’s commitment to ethical labor practices and sustainable development.
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