A new era of EU mini-trade deals?

The Clean Industrial Deal sets out a novel partnership model to engage with EU trading partners: Clean Trade and Investment Partnerships (CTIPs). The CTIPs are presented as a flexible tool for engaging with partners, helping the EU better navigate the current geopolitical context while accessing strategic markets, critical raw materials, and clean technology and energy. However, without careful design that re-prioritises the environmental and development dimensions of the trade-environment-development "triangle", CTIPs risk perpetuating old extractivist models focused primarily on securing resources for EU industries. For CTIPs to be a game-changer for the EU, they must re-prioritise the environment and development dimensions of the trade-environment-development nexus.

Drawing on best practices, this discussion paper offers policy options to consider as the Commission begins negotiating CTIPs, focusing on a strategic prioritisation; scope; legal nature; commitments; monitoring and enforcement, and governance. The authors argue that CTIPs should be developed as mini trade deals, that is, legally binding agreements with a targeted scope, addressing a crucial gap in the EU’s toolkit for engaging with trading partners. The new CTIPs should be built upon different pillars, such as trade and investment, sustainability standards, value addition in partner countries, and multi-stakeholder engagement. They should include tangible commitments for EU technical and financial support, as well as investment facilitation and regulatory cooperation provisions, together with built-in monitoring and enforcement mechanisms. By bringing decarbonisation, trade, and investment objectives into a single binding framework, the CTIPs can help break up silos between domains where alignment has previously been absent. Achieving this will require setting up a clear yet flexible governance framework within the EU, structured around country-specific CTIP task forces. This could help foster cooperation within the different EU institutions and Commission services and ensure alignment between the EU’s internal and external policies.