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EU Investment Treaties in the Geoeconomic Competition for EV Minerals

Author

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  • Horn, Henrik

    (Research Institute of Industrial Economics (IFN))

Abstract

EU member state investment treaties have been criticized for potentially deterring EU countries from pursuing desirable policy measures. This paper explores whether these treaties can nonetheless serve a beneficial geoeconomic function for the EU by safeguarding EU investments in five minerals critical to electric vehicle production. It is found that the treaty coverage provided by EU member states treaties ranges from minimal to moderately broad. While EU investments are, on average, better protected under these treaties than US investments are under corresponding US agreements, Chinese investments benefit from substantially broader—and likely stronger—protection. Moreover, China possesses significant domestic reserves of several of these key minerals. Overall, the existing network of EU member state investment treaties offers limited support for the EU’s geoeconomic positioning vis-`a-vis China.

Suggested Citation

  • Horn, Henrik, 2025. "EU Investment Treaties in the Geoeconomic Competition for EV Minerals," Working Paper Series 1525, Research Institute of Industrial Economics, revised 23 Apr 2025.
    • Handle: RePEc:hhs:iuiwop:1525
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    References listed on IDEAS

    as
    1. Aaditya Mattoo & Michele Ruta & Robert W. Staiger, 2024. "Geopolitics and the World Trading System," NBER Working Papers 33293, National Bureau of Economic Research, Inc.
    2. Horn, Henrik & Lavenius, Axel & Sanctuary, Mark, 2024. "Investment Treaties and the Threat to Biodiversity," CEPR Discussion Papers 19210, C.E.P.R. Discussion Papers.
    3. Gene M Grossman & Elhanan Helpman & Alejandro Sabal, 2024. "Optimal Resilience in Multitier Supply Chains," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 139(4), pages 2377-2425.
    4. Hailes, Oliver, 2022. "Lithium in international law: trade, investment, and the pursuit of supply chain justice," LSE Research Online Documents on Economics 123519, London School of Economics and Political Science, LSE Library.
    5. Oliver Hailes, 2022. "Lithium in International Law: Trade, Investment, and the Pursuit of Supply Chain Justice," Journal of International Economic Law, Oxford University Press, vol. 25(1), pages 148-170.
    6. Aaditya Mattoo & Ruta,Michele & Staige,Robert W., 2024. "Geopolitics and the World Trading System," Policy Research Working Paper Series 11009, The World Bank.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    International investment agreements; Investment treaties; Strategic minerals;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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