Opinion & Analysis

How the EU’s geoeconomic shift is adversely affecting developing countries

The European Union is now increasingly using trade and investment instruments to advance strategic foreign policy goals. Clara Weinhardt from Maastricht University and Ferdi De Ville from Ghent University argue that this geoeconomic shift is sidelining developmental priorities and creating friction with developing countries.

In recent years, the EU has increasingly embraced a geoeconomic approach to trade and investment, leveraging economic tools for foreign policy objectives, security and sustainability. The EU has created various new unilateral trade and investment instruments that seek to improve its competitiveness vis-à-vis strategic rivals, address security concerns or facilitate its transition to a green economy.

This shift reflects broader global dynamics, such as intensifying US-China tensions, concerns about the resilience of fragile supply chains and the urgency of climate action. However, this geoeconomic turn is not without consequences. The EU risks alienating the international community by going alone with these ‘autonomous measures’. Developing countries are disproportionately affected by the new instruments (because many of them depend heavily on exports to the EU for affected products), especially those that prioritise sustainability.

Moving forward, the EU should pay more attention to how its geoeconomic trade shift affects its global role, as new unilateral tools increase tensions between trade and development goals. Paying more attention to the impact of European laws on non-EU countries would be in line with European Commission president Ursula von der Leyen’s political guidelines for the new Commission (2024-2029).

About the Authors

Clara Weinhardt is Assistant Professor in International Relations at Maastricht University and a Non-Resident Fellow at the Global Public Policy Institute (GPPi) in Berlin.

Ferdi De Ville is Associate Professor in European political economy at the Department of Political Science. He holds a PhD in Political Science from Ghent University. His research interests include European and international political economy. In particular, he focuses on European Union Trade Policy, distributive effects of European integration and varieties of capitalism in Europe.

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