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Business views on Clean Trade and Investment Partnerships (CTIPs)

Business Europe | 11 February 2025

Business views on Clean Trade and Investment Partnerships (CTIPs)

The European Commission’s proposal for Clean Trade and Investment Partnerships
(CTIPs), as outlined in Ursula von der Leyen’s 2024-2029 political guidelines, aims to
create a comprehensive framework for international collaboration on clean energy,
critical raw materials, clean-tech trade, and investments.

As an announcement on CTIPs is expected in Q1 2025, BusinessEurope would like to
share our members’ views as to which countries, sectors, and type of commitments
should be prioritised under the initiative.

BusinessEurope fully supports the CTIP idea and shares the view that action is needed.
While comprehensive trade and investment agreements including ambitious raw material
chapter(s) in the sense of an open and rules-based trade policy should remain the EU’s
top priority, expanding the range of options definitely has merit. Large and
comprehensive FTAs have become more difficult to negotiate and finalize. On the other
hand, smaller and more targeted agreements/partnerships in e.g. clean tech, medical
goods or other specific industries could very well lead to tangible results (if properly
implemented) for EU’s trade policy, while streamlining the EU’s raw materials, energy,
health or clean-tech trade partnerships. Swift action of this kind would be an important
boost to Europe’s competitiveness and could open the door to further opportunities in
other critical sectors.

The EU should adopt a pragmatic and open approach, pursuing CTIPs with countries
with vast resources of raw materials and minerals, and with countries that present
opportunities for cooperation on clean tech, based on a value-chain approach.

A clear governance is a key pre-requisite to avoid inconsistencies within Commission
services as well as confusion among companies, considering the proliferation of other
initiatives such as the Minerals Security Partnerships or the Energy Partnerships.
Before starting negotiations, the European Commission should consult businesses about
their priorities and needs to ensure that CTIPs can deliver tangible results.

Priority countries and sectors

Priority partners for CTIPs should be countries that are rich in the raw materials we rely
on (e.g. copper, lithium, cobalt, nickel, gallium, germanium, antimony, bauxite, rare
earths, phosphorus, platinum group metals, magnesium, fluorspar) and where
partnerships can deliver the most outcome-based benefits. Partner countries should be
determined based on a clear methodology and following industry consultation. This
selection should include both developing and developed countries. In case the EU has
already an FTA in place, it should be explored whether an update of the FTA should be
pursued to include Energy and Raw Materials chapters. Furthermore, consistency and synergies must be ensured with other EU activities in the country. These include
Morocco, Algeria, Egypt, South Africa, Mozambique, Angola, Congo DRC, Zimbabwe,
Zambia in Africa ; Kazakhstan, Azerbaijan, Turkmenistan in Central Asia [1] ;Bolivia in South
America.

Countries in Asia and Africa in particular are experiencing high economic growth rates
and the demand for sustainable energy solutions to combat climate change is already
present and will only increase further in the years to come. Also, on the import side and
especially on securing access to critical raw materials, these regions have large deposits
of the necessary materials for the green and digital transition. In order to reduce Europe’s
reliance on single suppliers for critical materials and clean-tech components, which can
represent an economic security risk, diversification of supply chains is essential. It is also
crucial to ensure that these initiatives by the EU do not undermine the objective to extract,
process and recycle critical raw materials in Europe.

CTIPs should diversify supply chains also by promoting industrial cooperation with third
countries in the areas of clean tech, critical minerals, circular economy as well as trade
and investments in those concrete areas.

CTIPs can be a powerful tool that might contribute to the sustainability of a wide range
of industries in third countries and the resilience of Europe´s supply chains. This initiative
should unlock investments by providing financial guarantees and technical assistance,
as well as by eliminating barriers and improving the domestic rules of public
procurement.

The scope of the CTIPs could prioritize the same sectors identified as net-zero industries
within the Net Zero Industry Act (NZIA), the Critical Raw Materials Act (CRMA) as well
as the upcoming Clean Industrial Deal. However, it is important to also include side and
mid-stream industries that process raw materials and supply clean tech industries as well
as other relevant industries.

The approach should be broad and technology-neutral, covering critical raw materials,
goods, services, energy, and investments that can be used in clean tech and to speed
up and facilitate the green transition (including in green steel, energy and water-
efficiency). CTIPs should also be a platform to effectively address market access and
investment barriers for identified key sectors. The partnerships should always be
compatible with the WTO rules.

It is important not only to focus on access to critical raw materials, but also on creating
opportunities for EU businesses in processing and refining of these materials. There is
a long value chain from mining to final product where we need European know-how and
competencies to de-risk current dependencies in practice. Attracting and developing the
needed high-skilled labour should also be an aspect of CTIPs. At the same time, while
infrastructure and training programmes are welcome additions, the EU should ensure that its financial support does not indirectly subsidize industries in partner countries that
could thus compete unfairly with EU companies.

Binding commitments or best-endeavour basis ?

While binding commitments can increase the benefits for both European companies and
partner countries, in particular as far as long-term legal certainty is concerned, they may
also make negotiations more difficult. A suggestion could therefore be to negotiate CTIPs
not in a one-size-fits-all manner, but rather by adopting a case-by-case approach :
binding commitments that can be agreed with one partner country perhaps are not
possible with another, and therefore commitments should be negotiated on a best
endeavour-basis.

CTIPs should include a minimum base of binding objectives/results and a concrete
timeline for their achievement : they should include a review mechanism and leave room
for voluntary improvements and upgrades. The binding part could be calibrated to be
mutually advantageous, i.e. by also including EU commitments to promote investments
It should also contain provisions for withdrawal from commitments, as a last resort, in
case the partner does not make the necessary progress as set out in the specific
partnership timeline and after a negotiated solution has not been achieved.
Finally, CTIPs should not come at a disadvantage for long-term trading partners that are
highly integrated into the EU single market.