|Author (Corporate)||European Information Hub|
|Content Type||Blog & Commentary, News, Policy-making|
Information Guide focusing on information sources covering a forthcoming bilateral agreement between the United States of America (USA) and the European Union (EU) on critical minerals.
In August 2022, the USA enacted the Inflation Reduction Act (IRA), amending the country's Internal Revenue Code relating to the Clean Vehicle Credit. This became a subsidy for the purchase of qualifying battery or fuel cell operated vehicles in the form of a tax credit. To qualify for the maximum amount of the subsidy, a vehicle must inter alia be equipped with a battery that has a minimum critical mineral context share being extracted and processed in the USA (or a country with which the USA has a free trade agreement in force) or recycled in North America.
The Clean Vehicle Credit increasingly excluded EU-originating critical materials and processed materials for automotive batteries from USA supply chains. In March 2023, the President of the European Commission and the President of the USA issued a joint statement indicating their intention to launch negotiations on a targeted EU-US CMA to ensure that minerals extracted or processed in the EU could be used in vehicles eligible for the Clean Vehicle Credit. The Agreement is necessary to grant the EU equivalent status to US free trade agreement partners for this purpose.
The USA forward the proposal for a CMA on 10 March 2023. The European Commission forwarded it to the EU co-legislators on 21 March. A Recommendation for a Council Decision adopting negotiating guidelines for the talks between the EU and the USA was tabled by the Commission on 14 June, and adopted by the Council on 20 July.
|Subject Categories||Business and Industry, Internal Markets, Trade|
|Subject Tags||Bilateral Relations, External Trade | Trade Agreements, Industrial Policy|
|Countries / Regions||United States|
|International Organisations||European Union [EU]|