[CTC] Indonesia calls for critical minerals talks under IPEF

[Arthur Stamoulis]

Indonesia calls for critical minerals talks under IPEF
Inside US Trade, 5/30/23
 
Indonesia is pressing for Indo-Pacific Economic Framework for Prosperity countries to address critical minerals as part of their talks under the developing framework’s trade pillar, according to reports.
 
Airlangga Hartarto, Indonesia’s coordinating minister for economic affairs, floated the proposal during an IPEF ministerial meeting held in Detroit on Saturday, according to Indonesian news service Bizlaw.id <http://bizlaw.id/>. U.S. Trade Representative Katherine Tai, who steers the trade pillar on the U.S. side, in response said Washington wanted to “explore” critical minerals issues under the pillar and hoped IPEF countries would play an “active role” in such discussions, the report states, according to an informal translation.
 
Asked what those discussions could entail – and if they could lead to negotiations on a critical minerals trade pact along the lines of one signed earlier this year with Japan – a USTR official said Tai likely was speaking in the context of discussions about “supply chain resilience" and “not a new IPEF-led critical minerals pact." The deal with Japan is expected to allow minerals sourced from Tokyo to count toward sourcing requirements for new U.S. electric vehicle tax credits – treatment that Indonesia and the Philippines, another IPEF member, have said they would like to obtain via similar pacts with the U.S.
 
The official said the U.S.' only “active” negotiation on a critical minerals agreement is with the European Union.
 
According to the report, seven Association of Southeast Asian Nations countries and Australia expressed support for Indonesia’s proposal during the meeting.
 
Filipino Trade Secretary Alfredo Pascual told Inside U.S. Trade in an interview last week in Detroit that any potential critical minerals talks might be easier “politically” under the auspices of IPEF than bilaterally with the U.S. “I think that's a more politically palatable way,” he said, “from the perspective of the U.S. and also the relationship among the IPEF member countries.”
 
Only some IPEF members are significant critical minerals producers, he noted, adding that such talks would be relevant essentially just to those countries with “the pertinent supply.”
 
The Philippines, a major nickel producer, would like to reach an agreement with Washington that would spur U.S. investment in mineral processing in the country as Manila seeks to develop midstream and downstream segments of the battery supply chain, Pascual said.
 
“Otherwise, from China we have existing proposals,” he added. A large majority of the country’s nickel ore goes to China for processing, according to Pascual.
 
A source familiar with the IPEF talks earlier last week told Inside U.S. Trade that putting critical minerals trade on the table could boost U.S. leverage in the talks and help encourage countries to sign on to some of the high standards the U.S. is keen to negotiate under the deal. At the same time, the source contended, such talks could help Washington shift supply chains out of China.
 
The U.S. “can’t subsidize itself out of its geology,” the source said, adding that including critical minerals talks under IPEF is “obviously a question that people will probably think about in the next couple of months.” -- Margaret Spiegelman (mspiegelman at iwpnews.com <mailto:mspiegelman at iwpnews.com>)
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