Trade and EU autonomy in an era of geopolitical turbulence

The European Union was founded on a worldview marked by economic liberalism, multilateralism and globalization. This vision now seems to have lost its appeal.

The war in Ukraine highlighted the geopolitical dimension of EU membership and forced the Union to develop a response both economically and in terms of security. The bellicose attitude of the American administration, particularly in terms of customs duties and threats against Greenland, has also damaged transatlantic relations. Furthermore, China’s economic model and global ambitions continue to pose challenges for the EU and its single market.

The EU has been aware of this new reality for some time now. It has continued to strengthen its ability to adopt sanctions against countries and entities that violate international law, thereby ending virtually all of its commercial ties with Russia. It also adopted the anti-coercion instrument, allowing it to take countermeasures against any country that uses trade to interfere in the sovereign political or regulatory choices of the EU or its member states. The EU has adopted and reformed rules relating to the control of incoming foreign direct investments when they pose a threat to security or public order.

In a context of such geopolitical turbulence, trade is not only an economic issue, but also a security issue. Commercial links, the unconditional creation of cross-border logistics chains, or even dependence on extra-European sources of energy or natural resources in fact create geopolitical dependencies. These dependencies come with conditions.

The EU’s response must therefore be both proactive and defensive.

On the one hand, the EU should continue its diversification by establishing closer relations with more trading partners, for example by concluding new agreements with South American countries and Australia. This diversification should particularly concern rare earths used in essential civil and military infrastructures. Europe should therefore not sink into protectionism for the sake of it, simply because others are doing it.

The liberal vision of European integration still finds an echo and can be reconciled with current geopolitical circumstances. By diversifying its trading partners, the EU must not create new dependencies by trying to escape old ones.

On the other hand, the EU must refine its commercial arsenal and be ready to defend its own interests in the face of threats. The problem is not so much that the EU lacks the tools to defend itself. Rather, the challenge lies in the fact that threats now come not only from adversaries, but also from allies. This limits the EU’s ability to act defensively. A trade war with the United States, for example, would not only be economically costly for European consumers, but it could also precipitate a complete withdrawal of US support for Ukraine, increasing the risk for Europe’s security.

The EU’s ability to defend its commercial interests therefore depends on its ability to defend its security interests. Europe’s strategic autonomy, that is to say its capacity to act independently to defend its interests, is therefore an existential precondition. However, strategic autonomy cannot be achieved overnight. It requires coherent policy-making and effective implementation. But above all, it requires political actors, both at national and EU level, to raise citizens’ awareness of the issues at stake and inform them of the necessary compromises.

Mark Konstantinidis is a postdoctoral fellow at the Luxembourg Center for European Law at the University of Luxembourg. He received his doctorate from King’s College London, UK, where he remains a visiting lecturer. His research focuses on European law, international economic law and international arbitration.

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