The Geopoliticization of European Trade and Investment Policy

By Sophie Meunier, Kalypso Nicolaïdis. Journal of Common Market Studies, 2019

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The academic debate about trade policy in the EU has been dominated of late by claims about the new politicization of trade. After many decades of insulation from domestic politics, trade policy has erupted into public discourse with the unprecedented mobilization against the Transatlantic Trade and Investment Partnership (TTIP) and Wallonia’s coup in blocking the implementation of the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada. As a result, a body of academic scholarship has emerged that looks at the causes and implications of this politicization and variations across time and issue areas, as well as the nature of agreements and likely trends for future policies. In this review contribution, we push back argue against this prevailing diagnosis on two counts. Firstly, internal politicization is nothing new. For decades trade agreements may not have had much public salience, nor played a role in creating political cleavages during electoral campaigns, but behind the scenes member states have been engaged in a hard political fight over competences and interests. Moreover, some salient and, arguably, successful public mobilization has happened before, notably in the late 1990s. Second, it is our contention that, rather than simple politicization, the most important recent development has been the geopoliticization of trade and investment policy. Call it the China syndrome or the Trump effect, tariffs, retaliatory measures and counter-retaliation have featured prominently in the news in 2018, and the rhetoric of trade negotiations has given way to the language of economic battlefields and trade warfare. This geopoliticization of trade may pose a serious challenge to interdependence and multilateralism, which the EU has long safeguarded, but it is simply here to stay. This diagnosis also has important implication for EU power tout court. Is the EU equipped institutionally and politically to respond to Trump’s tit-for-tat threats and to resist attempts by China to divide and rule through targeted investments? By its very nature and its insistence on multilateralism, the EU may seem ill-equipped to thrive in this new world. But we argue that it is actually better positioned than common wisdom suggests and has become a major player in this geopoliticization game nonetheless. For the EU, the external politicization of trade is no longer about trying to change countries from within through trade power, as it tried to do in the previous two decades. Instead, it has become able to change the global balance of power through trade and to use economic statecraft to compete on a level playing field when the breakdown of multilateralism has fragmented the world into regions and rival powers. A series of policies adopted or discussed in the EU in 2018, ranging from concluding trade negotiations with Japan to

Subfields: Political Science and International Relations, Strategy and Management

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