Clean Trade and Investment Partnerships (CTIP): Fast track to market access and resources
The European Trade Justice Coalition is concerned about the EU’s new Clean Trade and Investment Partnerships (CTIPs). These fast track trade deals risk serving the business interests of transnational corporations instead of contributing to more sustainable trading relationships.They are likely to be negotiated in a non-transparent manner and to entrench neo-colonial patterns of resource extraction.
As part of its Clean Industrial Deal (CID), the European Commission is starting to negotiate a new breed of trade agreements dubbed Clean Trade and Investment Partnerships (CTIPs). According to the Commission’s CID Communication, CTIPs will “complement” its traditional Free Trade Agreements (FTAs) through “a faster, more flexible, and more targeted approach, tailored to the concrete business interests of the EU and its partners”. Through CTIPs the EU will seek engagement with strategic partners on issues such as raw materials, clean energy and clean technology. The Commission openly puts corporate interests in the driver’s seat when it stresses that “catering to EU and partners’ businesses’ needs and interests will be crucial to design effective CTIPs” and that the overall aim is to “secure the largest possible share” for the EU of the business opportunity represented by the $2 trillion global market for clean energy technology.
These mini-deals are supposed to aid the diversification of EU supply chains, enable better access to raw materials, and support clean tech and decarbonisation. Each deal brings together rules, regulatory cooperation, and investment. The rules are expected to contribute to “business opportunities for EU companies” and regulatory cooperation for the deployment of clean tech standards. Investments shall be mobilised through the Global Gateway initiative by identifying concrete projects and combining public and private funds.
The first CTIP will be negotiated with South Africa, as was announced during the EU-South Africa summit in March 2025. According to a rather short Commission factsheet, the deal with South Africa will be accompanied by a €4.7 billion Global Gateway investment package focussing on the energy transition (green hydrogen, critical raw materials, renewables, etc.) as well as transport networks and pharmaceuticals. However, if this amount will actually be mobilised remains to be seen, given that the EU provides only €303 million in grants which is expected to leverage some €4.4 billion in loans from financial institutions.
The fact that the Commission revealed neither further details of the planned deal with South Africa nor any information on the selection, scope, legal nature and negotiation process of further CTIPs raises critical questions. Furthermore, the Commission has openly admitted the flexible nature of these partnerships – which raises more than a few concerns.
Given the secrecy surrounding these new trade instruments, ETJC wishes to draw attention to the following risks and drawbacks:
- CTIPs are a component of the Clean Industrial Deal (CID) which, while not abandoning the EU’s Green Deal, is still weakening it through a strong focus on competitiveness, cheap energy supplies, and the roll back of key EU legislation on corporate due diligence. But increasing the EU’s competitiveness via cheap energy hurts climate goals as long as this energy still stems to a large extent from fossil sources. Similarly, striving for European leadership in the global clean tech race undermines the green transition as long as the EU refuses to share its technological know-how with countries in the Global South. Therefore, the CID’s key objective of fostering EU competitiveness risks compromising the integrity of any CTIP that is also meant to support partner countries’ sustainable development and global decarbonisation.
- The fact that the Commission conceives CTIPs as a complement to its traditional comprehensive free trade agreements suggests that CTIPs could serve as a fast track for smaller trade deals to avoid public and parliamentary scrutiny. Indeed, the announcement of the CTIP with South Africa occurred without the Commission having received a negotiating mandate or having carried out an impact assessment – typical steps prior to FTA negotiations. This also raises questions on the legal nature of these deals, i.e., the binding effect of the particular commitments, including enforceability and financing. The Commission should urgently clarify the legal nature of the CTIPs.
- The Commission does not seem to envisage any role for civil society, be it trade unions, local communities, or NGOs. At least, these groups were apparently not involved in the process leading to the announcement of the first CTIP with South Africa, and it is unclear if and how public participation is supposed to happen in the future.
- Despite vaguely mentioning support for local processing of critical raw materials in South Africa, it remains unclear how the CTIP will benefit the South African economy concretely. Which raw materials and which processing stages will be targeted for investments? How are proceeds to be shared along the value chain? What kind of jobs will be created, and which skills will be developed? What are the social and environmental impacts of the particular investments? Without clear, constructive answers to these questions, the CTIP risks reinforcing traditional patterns of resource extraction, locking South Africa into highly polluting, low profit and low wage activities, while European corporations continue to benefit from the processing steps with higher value-added.
- Due to the limited information on the Global Gateway investment package accompanying the CTIP with South Africa and potentially other partners, the financial risks cannot be assessed adequately. However, the stated intention to leverage a rather small amount of public grants with public and private loans carries the risk of increasing the public debt and of an over-reliance on private investors whose vested interests may undermine the objectives of a just green transition.
- When it comes to sustainable development, the Commission has indicated that CTIPs should also follow the principles from the 2022 TSD policy. However, framed under the new CDI, CTIPs carry the risk of overlooking important sustainability issues by focusing only on decarbonisation. Concretely for the CTIP with South Africa and considering the likely focus on green hydrogen, the EU should introduce meaningful commitments on biodiversity protection, water protection, and protection and promotion of human rights (in particular of local communities).
With the worrying indications above in mind, we would like to highlight preconditions and elements that a fair and equitable CTIP must fulfill to make a positive contribution to global justice and sustainability. This would include the following:
- Any fair and equitable CTIP must enable the transfer of clean energy technology across the world, and do so in a manner that meets the urgent development needs of countries in the global south including by supporting domestic industrial development.
- CTIPs must be designed for mutual benefit, not merely to secure European access to strategic resources. Binding measures must be included to ensure benefits are fairly shared, prevent resource plundering, and support local processing and value addition rather than simply exporting raw materials to Europe.
- Fair and equitable CTIPs could be used to replace existing, often outdated Bilateral Investment Treaties, terminating them while neutralising the sunset clause. Instead of containing one-sided protections for foreign investors, CTIPs should provide clear rules to maximise the benefits for communities and host countries from sustainable foreign investment. Investors must not be given direct access to any form of dispute settlement mechanism.
- CTIPs should not be structured around public funds “derisking” private investment; instead, they should prioritise direct public financing of sustainable infrastructure and local industries in partner countries. In order to avoid increasing the public debt of partner countries, financial packages must essentially consist of grants.
- The selection of partner countries for a fair and equitable CTIP must not be based on concerns around the EU’s competitiveness and attempts to secure raw materials, and its assessment of which partners it considers to be the most economically attractive. Rather, the focus must be on those countries with the greatest need and the least resources for the energy transition. Otherwise, CTIPs risk widening the economic wealth gap – the main obstacle for a globally just green transition.
- Right from the outset, a CTIP must be based on inclusive and transparent consultations with civil society in the EU and the potential partner country. Marginalised and vulnerable groups must be involved on an equal footing in order to avoid a bias towards powerful interest groups in determining the objectives and measures of a CTIP.
- Another prerequisite of a truly green CTIP is a rigorous Sustainability Impact Assessment (SIA) of the relevant trade and investment relations. On this basis, partners should agree binding mitigation measures that eliminate the social and environmental risks associated with the trade and investment flows envisaged under the agreement.
CTIPs as currently envisaged form part of the FTA and global economic architecture which has negatively impacted decent jobs and wages, damaged the climate, and undermined high standards and the access to vital goods such as medicines. The EU should refrain from any new agreement that continues to require blanket liberalisation of trade, particularly in goods and services whose production or consumption violate social, environmental and human rights standards. Existing trade and investment agreements should be revised to bring them in line with the EU’s social and environmental commitments and partner countries’ concerns.