cross-posted from: https://scribe.disroot.org/post/5768140
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This comes against the backdrop of this year’s supply chain issues, where China, as a dominant producer, has used export restrictions as leverage in its trade conflict with the USA. Against this backdrop, EU Commission Vice-President Maroš Šefčovič outlined how Europe intends to invest more heavily in Australian critical raw material projects in the future – ranging from equity participations and long-term off-take agreements to joint infrastructure initiatives.
Šefčovič made it clear that the EU’s focus is no longer solely on trade in the classical sense. Instead, targeted capital commitments and binding supply agreements are intended to secure the supply of critical raw materials in the long term. For Brussels, Australia is a key partner, possessing large reserves and stable political frameworks, and aiming to expand its role as a supplier of strategically important raw materials.
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Australia is moving into the spotlight as a reliable supplier of critical raw materials. The country possesses significant deposits, for example of lithium, rare earths, graphite, and other raw materials required for batteries, high technology, and the energy transition. At the same time, Australia is considered a politically stable and legally secure investment location that seeks to expand its cooperation with like-minded partners.
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For Šefčovič, Japan serves as a reference model for what such a raw materials strategy could look like. For years, Tokyo has been strategically investing in mines and refineries in partner countries to ensure its own industry can be supplied with critical raw materials even in times of crisis. The EU is now pursuing a similar approach: moving away from a purely market-based procurement policy towards strategic participations along the value chain.
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Against this backdrop, the planned free trade agreement between the EU and Australia is also gaining new significance. An initial attempt failed in 2023, primarily due to differences in agricultural policy, as Canberra demanded greater access for agricultural products to the European market. However, Šefčovič now sees renewed “momentum” for new talks. He expects negotiations to resume early next year.
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