EU trade policy review adds new complexities to global strategic rivalry

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Artwork: Tang Tengfei/GT

European political elites who hold power are likely to potentially complicate global competition between the great powers.

Last Thursday, the European Commission published a trade policy review. This document could be the first that systematically explains the strategic visions of the current EU executive leadership to manage external economic relations. It also has the potential to establish an overall framework for policymaking over the next five years in the areas of trade, technology, industry, investment and strategic planning. Highlighting the long-term anxieties and concerns of leaders, it reveals three inherent dichotomies.

First, it outlines why EU policymakers are “assertive in defending their interests” as they hold out hope of managing globalization by fixing the multilateral architecture of global governance – even if she slows down.

In other words, they want both “fair” and “free” trade, and are formulating stronger protectionist measures to ward off imports that could threaten their own manufacturing sectors. At the same time, they express detailed opinions on how to fix the WTO system. However, the “political trilemma” of the global economy, coined by economist Dani Rodrik, already shows the intrinsic structural discord that occurs in trade liberalization.

Parallel movements of assertive trade defense instruments and political efforts to relaunch the WTO can create disharmony in the overall EU project. This can ultimately hurt their goal of achieving their goals. Even within Europe’s domestic politics, commercial interests advocating free trade and popular voices demanding more protections are in conflict with each other. This adds to the complexity of the thorny political issues surrounding these areas.

Second, this dynamic also manifests the EU’s strategic balance between China and the United States. Clearly, the polarization between Beijing and Washington weighs heavily on their decision-making process. In fact, EU leaders see the rise of China as one of the main “trends” shaping “global uncertainty” and “tensions”. This could be interpreted as one of the biggest challenges facing the EU. And they intend to deal with China through both “engaged” and “stand-alone” protection policy instruments.

Furthermore, they hope that “transatlantic cooperation” with the United States will be reset under the presidency of Joe Biden. In fact, it will not be easy for the EU to hedge its bets in the Sino-US strategic rivalry, no matter how skillful or ingenious its diplomatic tactics are devised and executed. Europe’s competitive moves with China and the United States have seen greater intensity, especially as the old continent seeks a greater share of third-party markets and more cutting-edge technologies. Despite this, Europe is often embarrassed to be forced to take sides in the Sino-US confrontation on issues ranging from maritime territorial disputes in Asia-Pacific to the Huawei issue.

Inevitably, in the future, the EU will be even more pressured and deeply entangled in the destabilizing squabbles between these two giants.

Third, EU leaders may have to deal cautiously with possible internal differences as the continent designs its own “open strategic autonomy”. In this era of upheaval and uncertainty, the EU is striving to increase its capacity for self-determination through its own actions. As the von der Leyen Commission tends to centralize more resources for decision-making (especially in areas related to industrial strategies), it also faces potential tensions between larger EU states and member states. for an appropriate distribution of powers and competences that satisfies both sides.

Although it is undisputed that traditional trade policies and external trade negotiations do indeed fall within the exclusive competence of the EU, this document recognizes that the trade policy of this new era is largely involved in strategic planning and geopolitics in a much larger frame.

Therefore, differences between the EU and its member states may inevitably arise over how to divide or share decision-making power and authority on many specific issues. In this process, the overall effect can weaken its ability to act as a whole. Indeed, it may exacerbate the existing rich-poor and East-West divides within the different Member States themselves. This implies that the EU may or may not follow a simple path to develop its external economic relations.

Finally, the von der Leyen Commission document asserts that the EU’s trade policy must support its “geopolitical interests” and its “ambitions”. In this sense, it is reasonable to anticipate that the EU will try to manage its relations with major powers such as China and the United States through trade or other economic means, and new tactics or strategies of government. economy on the part of its political elites.

But it belies the innate contradictions and elusive ambivalence of these dichotomies – especially as great power strategic rivalry continues to intensify. Simply put, it is likely that global geopolitics will prove increasingly unpredictable.

The author is a professor and executive director of the Center for European Union Studies at Shanghai International Studies University. [email protected]

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