Supply chain security is at an inflection point. Critical minerals—essential to the energy transition, advanced technologies, and defense equipment—face major vulnerabilities, including market manipulation by the Chinese Communist Party (CCP) and rapidly rising demand. The administration has recently launched several new policies, including Project Vault—the first public-private stockpile of its kind—along with non-binding international agreements and expanded public-private investment initiatives. As a complement to these efforts, the U.S. Trade Representative is now exploring how to leverage plurilateral trade agreements to establish a more secure trading bloc.
The Council has identified intergovernmental commodity agreements (ICAs) as a historic model for plurilateral cooperation to help secure critical mineral supply chains. In testimony before Congress on the Joint Review of the United States–Mexico–Canada Agreement (USMCA), Ambassador Greer cited the Council’s recommendations on ICAs, leading us to believe they will likely play a prominent role in shaping USTR’s work on plurilateral cooperation.
Given this context, ICAs merit renewed attention, with their components potentially updated to form the basis of a plurilateral Agreement on Trade in Critical Minerals (ATCM).
The CCP’s Market Distortion
China is estimated to control 60% of global production and 85% of processing capacity for critical minerals, built through long-term strategic investments, predatory behavior, and non-market practices. This concentration leaves CCP-controlled firms as both the dominant buyer of raw mineral inputs and the dominant supplier of processed materials that advanced economies depend on—conferring outsized leverage over global supply chains. The CCP has repeatedly leveraged its market position to undermine the U.S. and other global competitors, restricting exports by limiting or cutting off access, or flooding the global market with minerals at below-market prices.
However, China’s continued dominance of critical mineral supply chains is not inevitable. Its domestic reserve advantage is largely limited to rare earth elements and natural graphite. Other critical minerals are distributed across allied and potential partner countries. While the CCP has extended its reach through the Belt and Road Initiative and other programs, significant opportunities remain to diversify control through ramping up domestic production and engaging mineral-rich producer countries.
Processing and refining are a different matter: China’s processing dominance was built deliberately through state subsidies, below-cost pricing, and the systematic undercutting of competitors—a now-embedded advantage that unilateral action alone cannot address.
Previous plurilateral agreements, such as ICAs, provide guidance on designing a modernized agreement on critical minerals.
What are Intergovernmental Commodity Agreements?
ICAs are trade agreements designed to stabilize global commodity markets by aligning producer and consumer interests through enforceable trade mechanisms. They address commodity-specific challenges that market forces alone cannot manage and have been used for diverse goods like rubber, tin, coffee, and tropical timber.
Past ICAs have primarily used the following provisions to manage price and supply:
- Buffer stocks: the process of governments buying and selling stocks of a commodity to stabilize prices.
- Long-term multilateral contracts: purchasing contracts between commodity-producing and commodity-consuming countries based on negotiated prices over a set time period.
- Quantity limits: restrictions on the volume of imports or exports of a specific commodity to mitigate oversupply on the market.
These provisions have been deployed individually or in combination, varying from agreement to agreement.
ICAs were most prevalent between the 1920s and late 1970s, ultimately failing as trade liberalization took hold. Their collapse followed recurring patterns: successful management of commodity trade within the ICA attracted non-member production that undercut the agreement, and rigid price floors and quotas became unsustainable for participating countries. The tin agreement, widely regarded as the most successful ICA before its 1985 collapse, fell to a familiar combination of surging non-member supply and a rigid, unsustainable price support mechanism.
Today’s challenge is structurally different. The CCP is shaping the global critical minerals market with subsidies, below-cost pricing, and export controls—not by comparative economic advantage. To build the market heft necessary to counteract the CCP’s advantage in processing and refining, consumer countries must find ways to diversify capacity and blunt market manipulation.
Consumer countries like the U.S., Japan, and the EU are combating the CCP’s distortive influence with a concert of unilateral and bilateral interventions to limited success. Cooperation across these markets and others would create the necessary market size to meaningfully diversify capacity, blunt manipulation, and reduce the geopolitical and economic risks found in critical mineral supply chains. An ATCM can be a vehicle to translate shared vulnerabilities into effective market power.
ATCM Design Considerations
Learning from past challenges with ICAs, an ATCM would establish a resilient trading bloc that expands opportunities for members and, where appropriate, aligns flexible policies to address state-directed market distortions—an objective that shapes its entire design.
An effective ATCM should be designed around four core objectives:
- Increase supply chain transparency, including origin and ownership, to close loopholes and enforce policies to address market manipulation.
- Diversify production and processing capacity away from CCP control to break the bottleneck and build a more competitive supply chain.
- Unlock economic development for member countries by providing price stability and guaranteed market access that mining and processing investments require.
- Reduce the competitive and geopolitical advantage of CCP-controlled firms by aligning trade measures, investment screening, and market access conditions across member economies.
These objectives must be translated into market interventions appropriate to individual minerals or product categories, given the distinct supply profiles, downstream uses, and geopolitical sensitivities of each mineral.
The agreement should engage complementary sets of partners. Countries that produce and process critical minerals—such as those in the Copperbelt of Sub-Saharan Africa, the Lithium Triangle of South America, and allied resource holders, including Canada and Australia—would provide the supply-side foundation for scaling production and diversifying processing capacity. Countries with strong manufacturing bases and large capital markets would provide the demand-side anchor, catalyzing investment in trusted supply chains and coordinating to restrict market access for CCP-sourced materials where appropriate. Notably, countries like the U.S. can occupy both roles simultaneously, creating a framework to align market power, production capacity, and geological resources.
A plurilateral ATCM can be a core component of a comprehensive strategy to secure critical mineral supply chains. Building on lessons learned from previous commodity agreements, this framework creates a transparent trade bloc, restricts indirect benefits to non-members like China, and stabilizes the market to catalyze both private investment and demand.
For our full comments on the design elements of an effective ATCM, see: Public Comments on the Design of a Plurilateral Agreement on Trade in Critical Minerals.