This article studies the determinants of international bargaining power in instances of trade negotiations between the European Union and the United States. The authors’ central hypothesis is that an appraisal of the US–EU trade relationship requires an understanding of the ways in which “domestic” political institutions shape the bargaining behavior of international actors. In particular, this article argues that the frequent EU “successes” in its negotiations with the US are the result of the bargaining power that its unique institutional arrangements grant its negotiators. In order to explain the distributional outcomes of international trade negotiations, the authors explore the “Schelling conjecture” and analyze why it is particularly relevant to the understanding of the unique bargaining power of EU negotiators when they are confronted with their American counterparts. To examine the explanatory power of domestic institutions in episodes of trade negotiations, the article analyzes the US-EC Uruguay Round agricultural negotiations (1986–1993).

Facing recent global disruptions brought about by the COVID-19 pandemic, the war in Ukraine, climate change, and the race for raw materials and technology needed for the green transition, economic interdependence—not least unilateral dependence—has increasingly come to be seen as a security threat. In response, the EU has put resilience and strategic autonomy at the centre of its trade and investment agenda. The EU was long resistant to this geoeconomic turn, that is, the use of economic tools for geopolitical purposes in normal times. Since 2017, however, the EU has placed greater emphasis on identifying and mitigating the security vulnerabilities that accrue from open markets. This geoeconomic turn has culminated in the June 2023 release of the European Commission’s Economic Security Strategy, which aims to maximise the benefits of economic openness while minimising the risks from economic interdependence. The aim of this thematic issue is to analyse the foundations of this new European focus on economic security and, more specifically, on the increased use of geoeconomic instruments. Coming at this objective from a variety of disciplinary traditions, methodologies, and substantive focus, our contributors tackle, among others, the following questions: Why has the EU abandoned its reluctance to use geoeconomics and finally made the switch towards economic security? How does the EU’s approach compare with other major global players? And, what are the long-term implications of the EU’s economic security strategy for European integration, its relationship with partners and allies, and the global economic order?

Heightened geopolitical tensions and the growing securitization of economic exchange over the past decade have prompted many countries to adopt new geoeconomic tools. Long resistant to this geoeconomic turn, the European Union (EU) has since 2017 created a panoply of innovative policy tools that blend trade and investment with essential security concerns. This article asks why and how the EU has been able to operate the doctrinal and policy changes necessary to put economic tools at the service of geopolitics. After introducing a typology of the defensive and offensive geoeconomic tools deployed by advanced industrial economies, we present the novel geoeconomic toolkit quickly assembled by the EU, which we explain by the confluence of external factors that triggered European leaders' beliefs that change was necessary and internal factors that made such change institutionally and politically possible, a trend reinforced by the pandemic and the Russian invasion of Ukraine.

European policy-makers often speak of their efforts to ‘manage globalization’. We argue that the advocacy of managed globalization is more than a rhetorical device and indeed has been a primary driver of major European Union (EU) policies over the past 25 years. We sketch the outlines of the concept of managed globalization, raise broad questions about its extent, and describe five major mechanisms through which it has been pursued: (1) expanding policy scope; (2) exercising regulatory influence; (3) empowering international institutions; (4) enlarging the territorial sphere of EU influence; and (5) redistributing the costs of globalization. These mechanisms are neither entirely novel, nor are they necessarily effective, but they provide the contours of an approach to globalization that is neither ad hoc deregulation nor old-style economic protectionism.

The EU is a formidable power in trade. Structurally, the sheer size of its market and its more than forty-year experience of negotiating international trade agreements have made it the most powerful trading bloc in the world. Much more problematically, the EU is also becoming a power through trade. Increasingly, it uses market access as a bargaining chip to obtain changes in the domestic arena of its trading partners, from labour standards to development policies, and in the international arena, from global governance to foreign policy. Is the EU up to its ambitions? This article examines the underpinnings of the EU’s power through trade across issue-areas and across settings (bilateral, inter-regional, global). It then analyses the major dilemmas associated with the exercise of trade power and argues that strategies of accommodation will need to be refined in each of these realms if the EU is to successfully transform its structural power into effective, and therefore legitimate, influence.

The European Union (EU), for decades a pillar of openness and multilateralism, has recently shifted towards a more assertive commercial policy relying on the development of new geoeconomic instruments designed to level the playing field and deal with the increasing blurriness between economy and national security. Alongside the new EU FDI screening framework for national security in place since 2020, the EU recently proposed and adopted another FDI screening mechanism to tackle market distortions arising from foreign subsidies in the context of European mergers and acquisitions. Why is the EU introducing this new policy instrument right now? What political economy forces shape the institutional design? And why does this instrument enjoy broad support in the Commission, Council of Ministers and European Parliament despite its likely redistributive impacts on Member State economies? Our paper uses process tracing, expert interviews, media research and secondary literature to trace the history of this policy project from its inception to its entry into force in mid 2023. In particular, we question why the decision was made to embed this policy under the competition arm of the European Commission, unlike FDI screening for national security which is managed by the trade policy arm. The paper finds that framing foreign subsidies as a competition issue sought to insulate the policy from accusations of disguised protectionism and ensured political support across the EU. Whereas more activist Member States, services of the European Commission and Members of the European Parliament see the instrument as a steppingstone toward a European industrial policy and more assertive foreign policy, vis-à-vis notably China, others perceive it as a long overdue measure to close regulatory gaps and to strengthen EU competition and state aid policy as well as relevant WTO rules. The paper contributes to the growing literature on EU foreign economic policy at the nexus between International Political Economy and Security Studies by shedding light on one of the most prominent new policy initiatives in these domains.