EU Trade Policy in Light of the Fragmentation of the Liberal International Order

The EU’s trade policy developed and evolved within the framework (norms and expectations) of the liberal international order established after WWII. Yet, the international trading system, a staple of the international order, is fragmenting. A dismissal of accepted norms, declining rule adherence, and trade wars, along with geopolitical concerns, now permeate many aspects of international trade. This chapter discusses the EU’s reaction to this fragmentation, including internal disagreements. The EU’s 2021 trade strategy, reinforced by the 2023 economic security strategy, reflects an overall determination to defend EU values and promote its interests in a world of power politics, while retaining a preference for a robust, rules-based multilateral system. Thus, we show how the EU has revised existing instruments and adopted new defensive trade instruments to protect and serve as deterrence against unfair trade and coercion, while simultaneously promoting WTO reforms. However, we also show how different EU institutions and Member States have reacted differently to the aforementioned fragmentation. While most European institutions and states remain Atlanticists (wanting to work with the US on most issues), some prefer a robust autonomous path, with select allied engagement – with the Commission straddling these two camps. Some European parties prefer a nationalist path, which entails reinforcing national powers while dismantling collective EU capabilities. The latter is not possible given EU treaty language and existing laws, but stronger nationalist sentiments could prevent any further strengthening of EU capabilities while imperilling transatlantic cooperation.