By Claudia Lebiecka
Brussels is actively expanding its green trade network. Following its December 2023 decision for a modernised association agreement with Chile, with a particular emphasis on critical raw materials, the European Union and the United Arab Emirates began formal negotiations for a free trade agreement on April 10. The emphasis on renewable energy, green hydrogen, and critical raw materials addresses a crucial need for the EU’s green transition. At the same time, talks with Indonesia, the world’s largest nickel producer, are accelerating. These developments show how Brussels is leveraging trade deals to gain a geopolitical advantage in the green transition.
Yet, this approach demands caution. The modernised association agreement with Chile, raises questions about the EU’s genuine commitment to sustainability. Is the EU compromising the very principles it claims to promote?
A New Geopolitical Landscape
As the global economy moves away from fossil fuels, the race for raw materials that power the green transition is reshaping diplomacy and trade. The EU currently produces only around 3% of the critical raw materials it needs, leading to a heavy reliance on imports from the Global South.
Chile, as the world’s largest copper producer and the second-largest source of lithium (essential for electric vehicles and renewable energy systems), is a key player. The EU imports around 80% of its lithium from Chile.
The new agreement aims to deepen political and economic cooperation. It includes a dedicated chapter on critical raw materials and stronger language on sustainability. However, a closer look raises concerns about how strong those sustainability commitments really are.
The Role and Limits of TSD Chapters
Trade has become one of the EU’s most powerful foreign policy tools. Through its free trade agreements, the EU can leverage access to its large market to secure resources and promote its values abroad. Central to this strategy are Trade and Sustainable Development (TSD) chapters, which aim to uphold labor rights, environmental protection, and climate goals.
In practice, however, these chapters have long been criticised for their inherent weakness. Their reliance on voluntary dialogue often fails to ensure meaningful compliance: since violations cannot be sanctioned, corporations may engage in exploitative practices without facing real consequences.
In response, the European Commission announced a “new approach” in 2022, committing to stronger enforcement. This included proposals for more civil society involvement and the possibility of trade sanctions for serious violations. Since then, the EU has signed two trade deals: with New Zealand and Chile. While the EU-New Zealand agreement allows for trade sanctions, the EU-Chile agreement does not. This inconsistency undermines the credibility of the EU’s new approach. If enforceability is the new standard, why not apply it here?
Realities on the Ground in Chile
This inconsistency is particularly hard to ignore in Chile, a country with a significant mining sector. In 2023, Chile recorded ten human rights allegations linked to mining, more than any other South American country. Over 80% of its lithium projects are located on Indigenous territories. Communities including the Kolla, Atacameño, Lickanantay, and Aymara peoples have been increasingly vocal, demanding “water justice” amid worsening scarcity and ecosystem degradation. Their message is clear: the green transition must not come at the cost of their rights.
Beyond the mining sector, in the agricultural industry, seasonal workers hired by large companies often face exploitative conditions. They are paid wages that don’t cover basic needs, work long hours, and lack social security. The sector also faces issues such as child labour, unlawful land acquisition, and conflicts with indigenous communities. If the EU’s TSD chapter were enforceable, it could help reduce these problems by holding companies accountable, ensuring fair wages, safer working conditions, and better protection for vulnerable groups like children and indigenous people.
While an additional protocol allows for a future review of the agreement’s sustainability approach and the possible introduction of sanctions, there are no guarantees it will be enforced in practice. Trade unions have therefore criticised the labour provisions in the agreement as “toothless,” warning they fail to ensure basic protections for workers. Moreover, the deal lacks ambition in addressing fossil fuel subsidy reform and transport-related emissions. Researcher Gabriela Cabaña Alvear notes that Chile’s energy planning is increasingly shaped by the global demand for its resources. Yet this model prioritizes exports to wealthier countries – like those in the EU – while Chile continues to struggle with fossil fuel dependence. In other words, Chile is powering the green transition abroad without seeing the benefits at home.
The Way Forward
As the EU continues trade talks with Indonesia and the UAE, a critical question emerges: will it continue to apply its standards selectively or will it finally deliver on its promise of a truly sustainable green transition?
If the EU truly seeks “equal partnerships” and a “just” green transition, it must take responsibility as an importing state, not just by securing critical raw materials, but by supporting sustainable development where extraction takes place. This means making labor and environmental provisions enforceable. Because in the end, the green transition must not only be green. It must also be fair.
About the author
Claudia is currently pursuing an Erasmus Mundus Master’s in European Politics and Society, studying at three universities across Europe. She specialises in European affairs and has a strong interest in critical raw materials, sustainability and the EU’s external economic relations. Her current research focuses on the green transition and its implications for social rights and global development. Alongside her studies, Claudia has been actively involved in volunteering and has gained experience working with various NGOs and think tanks.
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