New economic agreements and the EU defence mechanism
Japan and US signed a trade agreement on minerals for electric vehicle batteries. The agreement prohibits both countries from imposing bilateral export restrictions on the minerals most important in EV battery construction, namely lithium, nickel, cobalt, graphite and manganese. The agreement is also expected to reduce US and Japanese dependence on China.
The European Union has approved the removal of Pakistan from the list of “high-risk third countries” that pose a serious threat to its financial system. The list includes countries that the EU believes have strategic deficiencies in anti-money laundering and counter-terrorist financing, and Pakistan was added to the list in October 2018. Now Pakistani companies and individuals will not be subject to increased client scrutiny by EU authorities, which should reduce legal and financial transaction costs and increase Pakistani exports.
How can the European Union defend itself against attempts to undermine its sovereignty and stability, such as the Russian decision to cut off European gas supplies or the Chinese boycott and blockade of Lithuanian companies and goods? The EU has just decided to introduce a so-called anti-coercion instrument. It allows for remedies such as tariff increases, import and export licences and restrictions on services and government procurement. The instrument also offers an alternative way to settle trade disputes outside the World Trade Organisation. The new law is awaiting formal adoption by the Commission and the European Parliament.