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Member states clash over raw materials

France and Germany are at odds over a European Commission policy document on the controversial issue of how Europe should protect access to raw materials.

Next week (26 January) José Manuel Barroso, the European Commission president, is to unveil a long-delayed plan on how to secure Europe’s supplies of scarce raw materials. The strategy was originally intended to cover minerals, metals, wood and rubber, which are all subject to surging demand from emerging economies, especially China and India.

The strategy, which has been in preparation for more than six months, is intended to protect supplies to the European economy. Raw materials have been at the heart of some fierce economic and political battles recently, notably at the end of 2010 when China blocked shipments to Europe and the United States of rare earths, the precious metals over which it has a near-monopoly.

Despite the months of focus on raw metals and minerals, at the eleventh hour, Barroso has agreed to add to the paper a new section on commodities – agriculture and energy – to meet a request from Nicolas Sarkozy, France’s president.

Sarkozy now wants to use France’s presidency of the G20, which began this month, to give greater attention to commodity prices. He has accused speculators of causing turbulence on the commodity markets, which saw spikes in food and oil prices.

The clash of German and French interests reflects long-standing preoccupations. Germany unveiled a national raw-materials strategy last year and was vocal in its unhappiness over Chinese export restrictions on rare earths. France suggested last summer that the EU should create a commodity-price watchdog.

But adding commodities to the Commission strategy has irritated Rainer Brüderle, Germany’s economics minister, who wrote to the Commission this week to protest. “What they fear is the dilution of the strategy,” said one EU source. “When you mix metals with agriculture, with energy, the risk is that you give conflicting messages.”

“On the one side [the Commission] pleases the French, on the other side it loses the Germans,” said the source.

Three other sources confirmed that the draft strategy includes a section on volatile commodity prices. One source said it contained “no great news”, but simply summarised ongoing Commission work. An industry source commented: “Mixing the two [commodities and raw materials] doesn’t make much sense, because they are two different things.”

The section on raw materials will promise action on three fronts, according to a draft seen by European Voice. The first priority will be to use the EU’s leverage to break down trade barriers, possibly including action at the World Trade Organization. A second priority is to support mining and forestry in the EU. The third is to boost recycling rates in the EU, especially for electrical and electronic waste.

The paper was drafted by Antonio Tajani, the European commissioner for industry, and Michel Barnier, the European commissioner for the internal market, but will be published in Barroso’s name to reflect its political weight. Senior Commission officials are meeting tomorrow (21 January) to discuss the final shape of the paper, which could yet be altered.

Reinhard Bütikofer, a German Green MEP, who will draft a report for the European Parliament on raw materials, said that the Commission was not giving enough prominence to the issue of resource efficiency in the strategy, though the Commission will also consider the issue in a separate paper that is also going to next week’s college meeting. “Resource efficiency is the name of the game,” said Bütikofer. “If we don’t want to lose technological opportunities, if we don’t want competitors to gain the upper hand technologically, then it would be a mistake to focus first and foremost on securing access to international markets and domestic mining.”

Herbert Reul, a German centre-right MEP who chairs the Parliament’s industry, research and energy committee, stressed that access to raw materials was “vital” for Europe’s industry. “No EU member state alone can ensure this access in third countries. For this reason, the Commission must take the initiative. The access to raw materials must also be part of EU treaties and agreements with third countries.”