#EU #US #TradeDeal #ForcedLabour #CriticalMinerals #InflationReductionAct #LabourRights #CleanEnergy
The European Union (EU) is on the brink of forging a pivotal deal with the United States concerning the trade of critical minerals, an initiative energized by the EU’s forthcoming ban on products developed through forced labour, EU trade representative Valdis Dombrovskis revealed last Friday. This development surfaces amidst efforts to cement an arrangement enabling minerals mined or refined in Europe to be eligible for U.S. tax incentives under the Inflation Reduction Act, aimed at bolstering clean vehicle production.
Despite intensive discussions at the recent Trade and Technology Council, the negotiation teams from the EU and the U.S. did not reach a conclusive agreement. A significant sticking point involves the assurance of labour standards, with the U.S. expressing a desire for on-site inspections to verify compliance—an issue mirroring broader concerns about global labour practices and ethical supply chains.
Nonetheless, optimism remains as Dombrovskis indicated substantial progress in talks, suggesting a strong possibility of finalizing a deal within the current year. Both parties are reportedly in sync regarding the principles of labour rights and the eradication of forced labour. The introduction of the EU’s legislation targeting forced labour is poised to break new ground in these discussions, bridging differences between the two economic powerhouses.
The upcoming EU law, expected to be enacted this year, represents a significant stride in combating forced labour globally. The legislation mandates thorough investigations by the European Commission into allegations of forced labour outside the EU, while local infractions fall under the purview of national authorities. Products implicated in such practices are subject to withdrawal from the EU market.
Though the EU may not boast significant mining or processing operations for the targeted minerals—namely cobalt, graphite, lithium, manganese, and nickel—the proposed deal holds symbolic importance. It aims not just for economic gains but also to elevate the EU’s standing in global supply chains to a level akin to that of Canada and Mexico, transmitting a robust message to the industrial sector about the EU’s commitment to ethical and sustainable trade practices.
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