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The EU’s geoeconomic statecraft and the next Commission: the unsure fate of (in)formal changes in ‘geoeconomic policymaking’

SCRIPTS Think Piece No. 17 by Jaša Veselinovič

№ 17/2024 from Jun 14, 2024

The outgoing European Commission promised to be a ‘geopolitical’ one. Five years later, the EU’s ‘geoeconomic turn’ can be seen as one of the von der Leyen team’s main legacies. As Jaša Veselinovič argues in this Think Piece, this shift consists not only of new economic policy tools but also entailed changes and adaptations in the EU’s foreign policy-trade nexus. He states that even though requirements of geoeconomic policymaking induced numerous (in)formal adjustments, they remain only softly institutionalised – and that their fate (and more generally legitimacy) under the future new Commission remains uncertain. 

© Wikimedia Commons

© Wikimedia Commons

In the weeks leading up to the European election on 9 June, the focus was predominantly on political arithmetic. Would the European People’s Party’s leading candidate Ursula von der Leyen co-opt enough parts of the surging radical right to secure a second mandate at the helm of the European Commission? In moving the Commission to the (far-)right, she already partnered with Italian prime minister (and likely top-jobs kingmaker) Meloni in signing pacts that would finance Tunisian (and other North-African) security forces holding back migrants trying to reach the EU. After farmers’ protests, she also walked back on some climate and environmental policies, ditching elements of the European Green Deal, her Commission’s legacy project. 

Von der Leyen remains, however, much more committed to the other pillar of her legacy, namely the promise from the beginning of her term that she would lead a “Geopolitical Commission”. One aspect of this has been the attempt to play a more visible diplomatic role, recently, and controversially, exhibited in her uncoordinated interventions in the immediate aftermath of the Hamas’ attack which have been criticised  – even within the Commission – as seemingly lending unconditional support for Israel’s retribution bombing of Gaza. The second aspect – the EU’s “geoeconomic turn” – while internally contested, seems to be more lasting and also was not a point of attack on von der Leyen during the EU election campaign. 


Von der Leyen’s legacy: new geoeconomic policy tools

Geoeconomics is an increasingly dominant mode of global politics. “Beyond military, state-centred forms of ‘hard’ power contentions, today’s global landscape is being governed by more economic, network-centred, and complex forms of confrontation, competition, and cooperation” (Babić et al., 2022: 2). The EU’s attempt at engaging in geoeconomic statecraft which is but one aspect of a wider phenomenon of geoeconomics, has been pursued under the heading of “open strategic autonomy” which refers to the capacity to defend EU interests and values and manage interdependence in a more confrontational world (Borrell, 2020). But why should this be considered a ‘turn’? Indeed, some self-serving laments about the naïve EU being taken advantage of and now having to defend against coercion paint a too rosy and benign picture of the EU’s past (as any smaller trading partner or eager EU candidate countries that experienced the power of EU leveraging its economic might will tell you). Nevertheless, a set of new and innovative policy tools, domestic and external, “designed to defend a level economic playing field, ensure sustainability and environmental security, [and] respond to the new linkages between economic and national security and preserve European sovereignty” represent a veritable turning point in the EU’s approach to the foreign policy-trade nexus (Bauerle Danzman and Meunier, 2024: 8; for an overview of policies see also De Ville et al., 2023; Gehrke, 2022; Lavery, 2023). 

With regards to these policies, the EU elections and the new institutional cycle, strictly speaking do not mean much; they are here to stay. Still, it will be up to the next Commission to decide how vigorously and assertively they are to use them and if the activist countering of Chinese trade distortions (that at least is the focus currently) is to be continued. However, the ‘geoeconomic turn’ does not consist only of new policy tools. It also entailed formal and informal changes and adaptations in policymaking. Because these changes were largely dependent on the personal initiative and political capital of the (College of) Commissioners, their fate under the new Commission remains more uncertain. 

Institutional changes for geoeconomic policymaking

The institutional features of the EU make it an unlikely actor to engage in geoeconomic statecraft. Owing to a long history of parallel development of the two policy areas, the EU’s trade policy is an exclusive domain of the Commission and devised at the supranational level, while the much feebler foreign policy capacity is subject to intergovernmental decision-making. Despite long-standing calls for more coherence between the two poles and the establishment of ‘hybrid’ institutions like the External Action Service (EEAS) and High Representative of the Union for Foreign Affairs and Security Policy that were to better integrate the two, the foreign policy-trade nexus remained poorly integrated and driven by different (often opposing) logics (see Stueber, 2022; Bossuyt et al., 2020). Practising geoeconomic statecraft dictates overcoming these differences while also cooperating much more proactively with corporate actors in the design and implementation of geoeconomic policies. Indeed, as I argue in my recent article in the European Foreign Affairs Review (Veselinovič, 2024), the EU’s geoeconomic turn has entailed a tentative building of links to strengthen the nexus and increasing the reliance on corporate actors. 

First, there has been a substantive convergence around the necessity of a more geoeconomic posture and action. While Borrell and EEAS have consistently called for a more “Realist” and geopolitical approach under the slogan of strategic sovereignty and open strategic autonomy (Borrell, 2021, 2023), the DG Trade also acquiesced to the latter term. Its Director Sabine Weyand called for “dual integration of all the Union’s exterior actions” where everything the EU does in the economic realm is to be put into geopolitical perspective while the external and internal policies like industrial policy, internal market policy, competition, or even research policy are to be “intermingled” (Weyand, 2022).

Second, there have been the policies themselves. The EU’s flagship geoeconomic tool, the Anti Coercion Instrument (ACI) in effect since December 2023, is noteworthy for being the first formal instrument to connect trade policy and Common Foreign and Security Policy (CFSP), merging two different decision-making processes (Garcia-Duran et al., 2023: 172; Olsen and Schmucker, 2024). If ACI integrates the nexus procedurally, the newly established (in 2020) position of Chief Trade Enforcement Officer (CTEO, simultaneously Deputy Director General of DG Trade) can be seen as the political arm of the more assertive EU Trade policy. Being in charge of a set of new geoeconomic units within the DG Trade (see Couvreur, 2024), CTEO has been ensuring compliance with the EU’s Free Trade Agreements and coordinating the development and implementation of trade instruments that aim to tackle unfair trade practices.

Besides, there have also been smaller institutional changes. Von der Leyen established the cabinet-level Group for External Coordination which prepares all foreign policy-related items for College meetings, ensuring a more strategic and coherent external action. Furthermore, the only institutional reorganisation in CFSP announced by von der Leyen was to relocate Commission’s Sanctions Unit from the portfolio of HR/VP to the Commission’s new Directorate General for Financial Stability, Financial Services, and Capital Markets Union. The Commission has also tried to signal the integrated nature of its external action by its increasing use of “Joint Communications” where the Commission President and HR/VP together frame and set the foreign policy agenda in a broad and comprehensive way. 


Geoeconomics as a knowledge problem, think tanks, and the reliance on corporate actors

Furthermore, geoeconomic policymaking requires a specific sort of expertise, which has partly driven the EU’s growing role and investment into foresight activities, most often performed by the internal think tank-like units. While foresight has a longer (and fragmented) history within the EU, the current College of Commissioners for the first time includes a Commissioner – Maroš Šefčovič – who has foresight as one of his formal responsibilities. In parallel with the development and implementation of a wide array of geoeconomic policy tools, the European Commission has also set up a number of new expert groups. The number of “geoeconomic” expert groups has grown steadily as the geoeconomic turn has been gaining momentum; the group on Union restrictive measures and extra-territoriality (April 2021), on Outbound Investment (July 2023), the informal group on the carbon border adjustment mechanism (October 2023), one on Enhanced Coordination of External Financial Tools (February 2024). 

These expert groups can be seen to represent another one of the previously missing links in the trade security nexus and serve a variety of functions from problem-solving to building advanced consensus among stakeholders. The latter is particularly important when the members of expert groups are experts appointed by member states, which allows the Commission to bring in the intergovernmental aspect of decision-making. No less important for geoeconomic statecraft is the participation of corporate actors. On the one hand, expert groups are a way to formalise the inclusion of corporate actors in policymaking in ways more transparent than conventional lobbying. But they also betray the increased reliance on the participation and coordination with corporate actors in EU geoeconomic policymaking. This is true both with regard to the design and implementation of policies (e.g. sanctions) and knowledge about the realities of the EU’s economic entanglements (cases of coercion, supply chain vulnerabilities, etc.).

This brings us to the final point: the growing role of European foreign policy think tanks as important convenors who serve as an important link in the trade security nexus and beyond. In my article (Veselinovič, 2024) I argue (and illustrate on the case of ACI) that from the perspective of changes in governance induced by geoeconomics, think tanks have been establishing themselves as important sites and actors in the EU’s geoeconomic policymaking. Convening different stakeholders in diverse (and more or less public) formats is one of the main activities of think tanks such as EPCCEPS, and ECFR, which often have an “intermediation function” and networking as their main purpose (Rastrick, 2017: 69). 

As geoeconomic statecraft is redefining the relationship between the state and corporate actors (Gertz and Evers, 2020), the former are becoming increasingly dependent on the latter’s knowledge and cooperation for designing and implementing policies (Farrell and Newman, 2023). In this context, discrete convening enabled by think tanks that provide non-hostile (but also not neutral) terrain in the form of workshops, task forces, and similar formats has become an important element in geoeconomic policymaking. 


All of these changes and adaptations in policymaking have been only “softly” institutionalised; for the most part, they are not subject to formal reorganisations of how the EU institutions work but reflect the political commitments of the current Commissions. As such, they are subject to being reversed (or further strengthened) as the new institutional cycle starts taking shape in the wake of the European elections. While perhaps not the most polarising or politically salient, the changes induced by perceived requirements of geoeconomic policymaking in the trade-security nexus are worth keeping an eye on in the months to follow. Not least because the increased reliance on corporate actors opens all sorts of legitimacy concerns, while the more openly geoeconomic role of the Commission undermines its notionally ‘apolitical’ and technocratic mandate. 


Jaša Veselinovič is finishing his PhD at SCRIPTS (FU Berlin). His thesis is analysing the role and influence of European foreign policy think tanks on European Union foreign policy, in particular the development of debates around the notions of strategic autonomy and strategic sovereignty during the past decade. From Fall 2024, he will be a postdoctoral researcher at Vrije Universiteit Amsterdam. 



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