[CTC] A CMA in sight? The EU’s top trade lawmaker is ‘quite a bit optimistic’

[Arthur Stamoulis]

Insider Interview: A CMA in sight? The EU’s top trade lawmaker is ‘quite a bit optimistic’
Inside US Trade
By Margaret Spiegelman | March 22, 2024
 
BRUSSELS -- European Parliament Trade Committee Chair Bernd Lange is hopeful that the U.S. and the European Union will find a way forward on labor and environment issues that have been holding up a deal on critical minerals, he tells Inside U.S. Trade.
 
The bloc has been resisting a push by the U.S. to create an enforcement tool modeled on the rapid-response mechanism in the U.S.-Mexico-Canada Agreement – an approach not in line with EU practice, officials have said <https://insidetrade.com/node/179037>, raising technical and legal concerns about conducting investigations of facilities in third countries. But developing EU regulations dealing with forced labor and sustainability could help point to an alternative approach, Lange said in an interview here on Thursday.
 
“I guess there are possibilities to find a solution,” he said, referring to the impasse over labor and environment issues in the talks, launched last year, on a critical minerals agreement (CMA). “So, I'm quite a bit optimistic.”
 
Asked what kind of tools the EU could bring to bear in place of a USMCA-like rapid-response tool, Lange cited the Corporate Sustainability Due Diligence Directive and a ban on products made with forced labor.
 
The due diligence directive, approved earlier this week by a key parliamentary committee, would create new requirements for companies to address human rights and environmental impacts in their supply chains. The directive, supported by EU labor representatives, would create a role for stakeholders, like trade unions, to consult with companies on action plans to address those harms, among other changes.
 
The forced labor ban, meanwhile, would allow member states to investigate suspected instances of forced labor in companies’ supply chains and to ban or withdraw products depending on the outcomes of the investigations. If third countries are involved, it would allow the European Commission to take those actions. The European Parliament and Council earlier this month reached a “provisional agreement <https://www.europarl.europa.eu/news/en/press-room/20240301IPR18592/deal-on-eu-ban-on-products-made-with-forced-labour>” on the ban.
 
In addition to the labor and environmental issues, Lange said the U.S. and the EU also have been discussing questions about how many minerals would be covered under a CMA – a U.S. proposal to the EU covered just five of the 50 minerals relevant to the IRA, he noted – and the treatment of recycled minerals, among others.
 
If concluded, the deal would allow minerals sourced in the EU to count toward new sourcing requirements created under the Inflation Reduction Act for electric vehicle tax credits. A similar deal inked last year with Japan did not include enforceable commitments on labor and environment, drawing blowback from key Democratic lawmakers.
 
Lange said he was “totally aligned” with U.S. Trade Representative Katherine Tai on the importance of addressing labor and environmental conditions “on the ground at the mines.”
 
“It’s more the question of how to implement this and how to control this,” he added.
 
Lange also expressed strong support for the EU-U.S. Trade and Technology Council, saying he hoped the two sides would “institutionalize” it, potentially via the addition of an administrative body that could help facilitate more continuous dialogue between ministerial meetings.
 
He contended the council also could benefit from a more focused approach. The EU and the U.S., he suggested, should prioritize forward-looking areas in which they are more likely to make progress in the near term, such as risk assessment of artificial intelligence and standards for new technologies, among others.
 
Though Lange would prefer a more ambitious, trade-liberalizing agenda with the U.S., he said he was realistic about the prospects for such an agenda given what he described as the increasingly “domestic orientation” of economic policies on both ends of the U.S. political spectrum. In this political context, he contended that the TTC filled a critical gap as a forum to discuss trade.
 
“In this world of today it's really important that democratic countries ... really work together,” he said, adding that he wanted to “see the TTC as an instrument to give the possibility to change views” while facilitating cooperative efforts on more modest outcomes.
 
The TTC’s five co-chairs, including Tai, are set to meet early next month in nearby Leuven, Belgium, for the last council ministerial before elections this year on both sides of the Atlantic. -- Margaret Spiegelman (mspiegelman at iwpnews.com) <mailto:mspiegelman at iwpnews.com)>

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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