EU recovers appetite for trade in green industry push

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EU eyes Chile lithium deposits, Australia in trade deals


The New Zealand deal is likely to be fast-tracked in 2023


Free trade agreements with Mexico, Mercosur can be revived

BRUSSELS, Jan 30 (Reuters) – The European Union is aiming to complete up to five trade deals in record time to secure its future as a clean technology leader, securing supplies of key raw materials, increasing markets for -ecological exports and reduce its dependence. on China.

A major EU trade boost is a key part of its “Green Deal Industrial Plan” to ensure the bloc remains a manufacturing hub able to compete with those of the United States, whose new law on its ecological subsidies concerned a lot in Europe.

The President of the European Commission Ursula von der Leyen will present the plan on Wednesday.

Trade Commissioner Valdis Dombrovskis said multiple economic shocks, including the COVID-19 pandemic, Russia’s invasion of Ukraine and rising protectionist tendencies, had sparked debate across the EU. on competitiveness.

“This debate has evolved into a wider reflection on whether the EU should continue to look outward or turn further inward,” he told lawmakers, adding that he believed the bloc drew its strength from be a “commercial superpower.”

A year ago, EU diplomats said that France, which then held the rotating six-month presidency of the EU, had halted moves to advance trade deals so that concerns about globalization would hamper the -its presidential and legislative elections.

Open trade advocates Sweden and Spain, the current and next holders of the EU presidency, both hope to revive the trade drive.

Together, the five deals being targeted could be worth around 10 billion euros ($10.9 billion) to the EU and help cement its market share and influence in the Americas and the Asia-Pacific region. Pacific, according to Hosuk Lee-Makiyama, director of the trade think tank. ECIPE.

Andre Sapir, senior fellow at the Bruegel think tank, said EU free trade deals often came in waves, with more protectionist periods in between.

“Geopolitical developments and access to raw materials are providing the extra push now,” he said.


Von der Leyen said Europe needs to build its own refining of raw materials and work with partners including the United States to strengthen supply chains and reduce dependence on China, which dominates the processing of rare earths and lithium.

The US Inflation Reduction Act, which seeks to make the US a leader in green technology, possibly at the expense of Europe, has intensified this need.

The Commission, which negotiates trade agreements on behalf of the 27 EU members, emphasizes that an updated agreement with Chile agreed in December could give Europe better access to lithium, a key component of the EU’s batteries. vehicles.

Chile is the second largest producer of lithium in the world.

The EU sees similar promise from another trade deal with Australia, the biggest lithium producer, which both sides believe could be concluded in the middle of the year.


The EU executive has negotiated a number of trade agreements, but their approval process has been very slow.

The bloc’s most recently implemented trade deals, with Singapore and Vietnam, took four to five years to clear the European Parliament and EU governments, although the deal was rushed between the EU and the -Japan took 18 months.

Agreements with Mexico from 2018 and with the Mercosur bloc of Argentina, Brazil, Paraguay and Uruguay from 2019 are suspended.

Now, the European Parliament and EU governments can approve by the middle of the year an agreement reached only in June 2022 with New Zealand and follow it with a green light for the Chile agreement, EU officials say.

Consensus could follow for the 2018 deal with Mexico, assuming Mexico agrees to split the deal in two, part of which could be rushed through in Brussels. Australia’s planned deal could also go ahead if it is agreed by mid-2023.

“Finalizing free trade agreements, expanding our network of free trade agreements will be on our agenda this year and next,” Dombrovskis said at a meeting of information earlier this month.

The Commission, which negotiates trade deals for the EU’s 27 members, said Luiz Inacio Lula’s defeat of Jose Bolsanaro in October’s Brazilian presidential election created a window of opportunity to re-examine the Mercosur agreement.

“We cannot miss the chance with Lula,” said a senior Spanish diplomat.

The deal was suspended due to EU concerns about Amazon deforestation and demands for sustainability commitments. Lula has promised to tackle rainforest deforestation, but trade analysts say reviving the EU-Mercosur deal will still require tough negotiations.

“It was certainly impossible for the EU with Bolsanaro, but now it is also complicated for the Mercosur side,” said Sapir. ($1 = 0.9184 euro) (Reporting by Philip Blenkinsop; Editing by Catherine Evans)

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