The Future of Trade and Investment Deals in a Critical Minerals Boom

This policy brief by the International Institute for Sustainable Development examines the role of trade and investment agreements in the critical minerals boom, highlighting the tension between importing countries' desire for stable raw material access and exporting countries' goals for domestic value addition and sustainability.

• Demand for certain critical minerals, including lithium, cobalt, and nickel, is projected to increase by up to seven times by the end of the current decade due to digital and energy transitions.
• Trade and investment agreements often feature conflicting objectives: importing nations like China, the European Union, and the United States prioritize affordable, stable access to raw materials, while exporting nations seek to diversify markets and maximize domestic value addition.
• Free trade agreements (FTAs) are increasingly including critical mineral provisions. While mostly focused on importer access, some exporting countries have successfully protected policy space; for example, Indonesia defended export controls and Chile secured protection for lithium dual pricing systems in EU agreements.
• Investment agreements are categorized into 'old-generation' deals, which the document claims unduly protect foreign investors and limit the policy space of host countries, and newer agreements that attempt to integrate environmental, social, and governance (ESG) standards, though these often lack enforceability.
• Memoranda of Understanding (MOUs) offer a faster, less formal alternative to formal agreements but lack transparency and enforceability. An example is the MOU between the EU and the Democratic Republic of the Congo, which facilitated expert exchanges but failed to implement ESG standards or economic opportunities.

APA

Baršauskaitė, I., Nikièma, S. H., Moerenhout, T., Ostřanský, J., Tipping, A., & Verma, R. (2025). The Future of Trade and Investment Deals in a Critical Minerals Boom. International Institute for Sustainable Development. https://www.iisd.org/articles/policy-analysis/future-trade-and-investment-deals-critical-minerals-boom

Chicago

Baršauskaitė, Ieva, Suzy H. Nikièma, Tom Moerenhout, Josef Ostřanský, Alice Tipping, and Rupal Verma. The Future of Trade and Investment Deals in a Critical Minerals Boom. International Institute for Sustainable Development, 2025. https://www.iisd.org/articles/policy-analysis/future-trade-and-investment-deals-critical-minerals-boom.

Wikipedia

{{cite report |last1=Baršauskaitė |first1=Ieva |last2=Nikièma |first2=Suzy H. |last3=Moerenhout |first3=Tom |last4=Ostřanský |first4=Josef |last5=Tipping |first5=Alice |last6=Verma |first6=Rupal |title=The Future of Trade and Investment Deals in a Critical Minerals Boom |publisher=International Institute for Sustainable Development |date=11 March 2025 |url=https://www.iisd.org/articles/policy-analysis/future-trade-and-investment-deals-critical-minerals-boom |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{barauskait2025future, author = {Baršauskaitė, Ieva and Nikièma, Suzy H. and Moerenhout, Tom and Ostřanský, Josef and Tipping, Alice and Verma, Rupal}, title = {{The Future of Trade and Investment Deals in a Critical Minerals Boom}}, institution = {International Institute for Sustainable Development}, year = {2025}, month = mar, url = {https://www.iisd.org/articles/policy-analysis/future-trade-and-investment-deals-critical-minerals-boom}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }