The EU as a Geoeconomic Actor? A Review of Recent European Trade and Investment Policies

Abstract

AbstractThe so-called geoeconomic turn stands for the increased tendency of countries to use economic policy instruments to promote or defend national interests vis-à-vis trading partners or rival powers. Scholars note a similar shift in trade and investment policies of the European Union (“EU”). However, there are few studies that examine whether this proclaimed shift at the policy level is reflected in outcomes. Against this background, this chapter examines the EU’s ability to position itself as a defensive geoeconomic actor. Based on three exploratory case studies—investment screening, Most-Favoured Nations clauses in Free Trade Agreements (“FTAs”), and the EU’s (non-)response to China’s Belt and Road Initiative (“BRI”)—we find that the EU’s ability to act in line with its own geoeconomic ambitions varies across the policy initiatives studied. In particular, lack of alignment of individual EU Member States with a common EU policy stance serves as a possible challenge for implementing defensive geoeconomic policies. At the same time, we also find that that the EU’s own framing of what makes a policy initiative “geoeconomic” varies widely, and does not always correspond to the legal design or economic implications of a given initiative. These findings contribute to debates on the EU’s evolving relevance as a global actor and shed new light on recent conceptualizations of the geoeconomic turn.