When Foreign Policy Becomes Trade Policy: The EU's Anti‐Coercion Instrument

Abstract

The European Union (EU) has taken a geoeconomic turn since 2017 by creating a series of new unilateral instruments designed to preserve European autonomy and adjust to the progressive unravelling of the liberal international economic order. The most controversial of these instruments is the 2023 Anti‐Coercion Instrument (ACI), designed to deter third countries from targeting the EU and its member states with economic coercion through measures affecting trade or investment. This article analyses why this new policy instrument was created, traces its institutional genesis and explores its implications by asking whether the ACI represents an intentional attempt to transform the foreign policy issue of coercion into a commercial one. Using process tracing based on interviews and primary and secondary materials, we argue that ‘foreign policy becoming trade policy’ through the ACI was an unintended consequence both of external pressures to institutionalise the trade–security nexus and of the EU's uneven internal competence base.

The Ideational Power of Strategic Autonomy in EU Security and External Economic Policies

“…In March 2021, it launched a proposal for a foreign subsidy regulation that would oblige foreign investors to be more transparent about their financial sources. By the end of that same year, it presented a proposal for an anti-coercion instrument, aimed to counter economic coercion by third countries (Freudlsperger and Meunier, 2024). As the Commission has the first-mover advantage and disposes of much more staff than most member states, it is undeniably in a strong position (#6).…”

“…Although the SA concept was born in the security domain, it is in the field of EU external economic relations that it has been gathering pace (Lavery et al, 2022). Under the umbrella of OSA, a whole range of instruments aimed at strengthening the EU's resilience and reducing its strategic dependencies have been launched (Freudlsperger and Meunier, 2024;Gehrke, 2022). In the security area, on the other hand, the concept continues to be contested, with the Strategic Compass mentioning this term only once (Council of the EU, 2022).…”