The European Union’s trade chief said the bloc is closing in on an agreement with the US on access to raw materials used in batteries, giving EU companies access to some benefits included in President Joe Biden’s green investment plan.
(Bloomberg) — The European Union’s trade chief said the bloc is closing in on an agreement with the US on access to raw materials used in batteries, giving EU companies access to some benefits included in President Joe Biden’s green investment plan.
European Commission Vice President Valdis Dombrovskis said the US is considering granting the EU an equivalent status as a trade-accord partner as he prepares to for a trip to Washington next month aimed at smoothing over tensions tied to Biden’s climate plan, the Inflation Reduction Act.
The US has “indicated openness to find ways how to treat us as a free trade agreement-equivalent partner,” Dombrovskis told reporters in the Bulgarian capital Sofia Thursday. He said such a deal would help redress “discriminatory aspects” of the IRA.
A task force set up to resolve differences “will be able to solve some of our problems with IRA but not all of our problems,” Dombrovskis said, reiterating a number of points he made earlier to Germany’s Augsburger Allgemeine newspaper.
The commission official also cited a deal on tax rebates for US electric vehicles, with an exemption for leased EVs, which Dombrovskis called a “halfway satisfactory solution” for EV tax credits.
The US climate package includes about $500 billion in new spending and tax breaks over a decade to promote US manufacturing and services and gives certain exceptions for countries that have free-trade agreements with the US like Canada, Mexico and Australia.
Its focus on boosting American industry has angered trade partners from Asia and Europe who said it discriminated against their companies, particularly carmakers.
Dombrovskis said March will be “an important milestone” in getting a deal on the IRA, with the US Treasury poised to publish guidance on the climate package at some point during the month.
Still, Dombrovskis said, the EU-US task force will be confronted with further issues in the future, including deeper differences on renewable energy and other areas.
“We’ll need to take stock where we are and decide, OK, what further measures will be needed,” Dombrovskis said.
–With assistance from Jorge Valero and Alberto Nardelli.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.