The U.S. and Japan announced an agreement to strengthen and diversify the supply chains for critical minerals, like those used in semiconductors and other cutting-edge technologies.
The U.S. and Japan agreed to partner in strengthening supply chains of critical minerals including cobalt, graphite, lithium, manganese, and nickel, under the agreement that took effect immediately after it was signed on Tuesday. The two countries committed to taking domestic action to address non-market policies of other countries that distort trade in critical minerals and not impose export duties between the U.S. and Japan on critical minerals.
China has the majority of refining capacity for nickel, lithium and cobalt, which is a key role in global supply chains for critical minerals. It is increasingly exercising control over raw commodities in areas rich in critical minerals. The Nigerian government recently made a deal with a Chinese firm to develop the best practices for reviewing investments made within the two countries by foreign entities. It included measures to promote resource-efficient approaches to reduce the demand for, and environmental impact of virgin material extraction of critical minerals.
The U.S. and Japan will improve information-sharing and enforcement actions related to labor rights violations in the extraction and processing of critical minerals. The agreement shows President Biden's commitment to building resilient and secure supply chains will be recognized by the two countries' efforts to remedy labor rights violations at entities linked to critical minerals supply chains and promote employer neutrality in U.S. Trade Representative Katherine Tai said the agreement was proof of President Biden's commitment to building resilient and secure supply chains. The agreement will allow us to deepen our existing bilateral relationship with Japan, according to Tai, one of our most valued trading partners. This is a welcome moment as the United States continues to work with our allies and partners to strengthen supply chains for critical minerals, including through the Inflation Reduction Act. Facing the prospect of a significant increase in demand for electric vehicle batteries, it is urgent to secure critical minerals that are essential to the production of clean vehicles, said the office of Japan's ambassador to the U.S. Tomita Koji in a press release. The Agreement is intended to build robust supply chains through coordination between Japan and the U.S. and to strengthen cooperation to ensure sustainable and equitable supply chains for critical minerals, including to promote the goals of the Inflation Reduction Act. The agreement was praised by the office as a tribute to the commitment of the U.S. and Japan with respect to the critical minerals sector to facilitate trade, promote fair competition and market-oriented conditions for trade in critical minerals, advance robust labor and environmental standards, and cooperate in efforts to ensure secure, transparent, sustainable, and equitable critical minerals supply chains.