Lithium – ‘White gold’ seen as pivotal to Europe’s massive trade deal with South America
- After 25 years of talks, the European Union and five Mercosur countries (Brazil, Argentina, Paraguay, Uruguay and, newly, Bolivia) reached a highly anticipated trade agreement on Dec. 6.
- France and Poland are among those to have expressed opposition to the deal, warning it could create unfair competition for European agriculture.
- Analysts at Dutch bank ING said the significance of critical raw materials like lithium seemed to be “making less headlines” in the coverage of the free trade agreement, despite the metal’s importance to Europe’s economic future.
The strategic importance of lithium is likely to have played a major role in the European Union’s blockbuster deal with Brazil, Argentina and three other South American countries, analysts say.
After 25 years of talks, the EU and five Mercosur countries (an alliance which includes Paraguay, Uruguay and, newly, Bolivia) reached a highly anticipated trade agreement on Dec. 6.
If ratified by the 27-nation bloc, the EU- Mercosur partnership will create one of the world’s biggest free trade zones, covering an estimated area of more than 700 million people and representing roughly 20% of global gross domestic product.
The European Commission, the EU’s executive arm, said the trade deal is designed to increase bilateral trade and investment, lower tariff and non-tariff trade barriers, create more stable rules and promote joint values, such as sustainable development.
Not everyone is in favor of the agreement, however. France and Poland are among those to have expressed opposition to the deal, warning it could create unfair competition for European agriculture.
Analysts at Dutch bank ING said the significance of critical raw materials like lithium seemed to be “making less headlines” in the coverage of the free trade agreement, despite the metal’s importance to Europe’s economic future.
analysts at ING said in a research note published Friday.
That’s surprising, given that a) the EU is very dependent on China for critical raw materials, b) countries like Argentina, Bolivia and Brazil hold large reserves of some of these critical raw materials and c) EU demand for these materials is expected to massively increase,
They added,
It may be difficult to quantify the exact economic value of having better access to these materials through closer ties with Mercosur, but we believe this particular element carried a lot of strategic weight for the EU [Commission] when striking the deal – especially as diversification or sourcing and securing supply is currently top of mind,
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Lithium – ‘White gold’ seen as pivotal to Europe’s massive trade deal with South America, source
