Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1525: EU Investment Treaties in the Geoeconomic Competition for EV Minerals

Henrik Horn ()
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Henrik Horn: Research Institute of Industrial Economics (IFN), Postal: Stockholm, Sweden, and Centre for Economic Policy Research (CEPR),London, UK

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.

Keywords: International investment agreements; Investment treaties; Strategic minerals

JEL-codes: E24; J21; J51

Language: English

40 pages, First version: April 15, 2025. Revised: April 23, 2025.

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