US and EU agree to negotiate on electric vehicles and green subsidies

USA and the European Union (EU) agreed this Friday to begin negotiating a trade agreement on minerals to favor European companies that manufacture electric vehicles and establish a “transparent dialogue” on subsidies for green energy.

This was announced in statements to the press by the President of the European Commission (EC), Ursula von der Leyen, after meeting in the Oval Office of the White House with US President Joe Biden.

Von der Leyen explained that the meeting had been “constructive” and that both managed to find solutions to the tensions that have marked the transatlantic relationship in recent months after the approval in the US of the so-called Inflation Reduction Act (IRA).

This law includes an aid package of 370,000 million dollars (about 350,000 million euros) to promote the energy transition and offers tax incentives to companies that manufacture electric vehicles with components made in North America, including Mexico and Canada, with which the US The US has free trade agreements.

European companies, in principle, could not access these subsidies because the community bloc does not have a trade agreement with the US, but Washington and Brussels want to solve that.

According to Von der Leyen, the idea is that electric vehicles that have been manufactured with a certain amount of minerals extracted or processed in Europe can access US subsidies, which would give European companies a similar treatment to that received by Mexican companies. , Canadians and Americans.

Likewise, the agreement will allow the United States and the European Union to improve access to those minerals and raw materials that are essential to manufacture everything from solar panels to electric vehicles and whose extraction and processing are controlled almost entirely by China.

The negotiations will begin “immediately”according to a joint statement issued later by the two parties.

A “TRANSPARENT DIALOGUE” ON GREEN SUBSIDIES

In parallel, the United States and the EU agreed to establish a “transparent dialogue” on the subsidies that both economies are offering to the green energy industry, Von der Leyen explained.

With this dialogue, the US and the EU will exchange information on the subsidies that different companies will receive thanks to the US Inflation Reduction Law and the so-called “Green Pact Industrial Plan”, which the European Commission presented last month past.

“For us, on both sides of the Atlantic, it is important to know what kinds of incentives are being given to the clean energy industry to make sure that we are joining forces,” von der Leyen argued.

Until now, European countries have opposed the Inflation Reduction Act as a protectionist measure and have been concerned that European companies would move from Europe to the United States to take advantage of these tax breaks.

However, Von der Leyen today said he “welcomes” the move for the investments it makes for a more sustainable future.

The EU and the US, in addition, set October of this year as the deadline to close their negotiations on sustainable steel and aluminum.

“NEW STEPS” AGAINST COUNTRIES THAT SUPPORT RUSSIA

Although the big announcements came from the economic part of the meeting, the two leaders also focused on the war in Ukraine.

Both decided to “take new steps” to act against those third countries that are helping Russia in the war, according to the joint statement.

In addition, Biden and von der Leyen pledged to enforce the sanctions they have jointly imposed on Russia since the war began.

At the beginning of the meeting in the Oval Office of the White House, the two leaders congratulated each other for the coordination that the US and European countries have shown both when it comes to imposing sanctions on Russia and giving military aid to Ukraine.

In front of the television cameras, Biden recalled how last year the two parties agreed to create a working group whose objective was for the US to help the EU reduce its dependence on Russian gas, in particular by supplying it with 15 bcm of gas liquefied natural gas (LNG).

Whispering for emphasis, Biden told von Der Leyen: “We gave them double” and raised a fist in victory. Before this gesture, European politics reacted smiling and saying: “That’s right.”

The two leaders were in tune with the press and Biden considered that the two powers are experiencing a “new era” of cooperation.

China was also part of the talks between the two leaders, although there were no big statements about it.

Biden has made it clear that he sees China as America’s biggest strategic competitor; while Europe has traditionally had a closer position with the Asian giant.

Source: EFE