Geoeconomic Diplomacy: Reforming the Instrumentalization of Economic Interdependencies and Power

Abstract

In a global economy marked by accelerating processes of both economic integration and decoupling, policymakers of wealthy states, including those in the European Union (EU), are showing an increasing willingness to weaponize their economic power capabilities as integral parts of foreign and security policy-making. Yet, such growing geoeconomic ambitions are rarely accompanied by adequate reforms of the diplomatic structures underpinning them. In analyzing deficiencies of EU geoeconomic diplomacy through case studies pertaining to the EU’s of sanctions against Russia’s military invasion of Ukraine in early 2022 as well the development of a new EU anti-coercion instrument to counter coercive trade practice by its geoeconomic rivals such as China, this chapter proposes a number of reform initiatives to be considered at the domestic, European, and international levels: (i) a stronger cross-integration of EU member states’ ministries of foreign affairs and ministries of economics; (ii) the creation of EU-level “geoeconomic committees” integrating private actors in geoeconomic deliberations and decision-making; and (iii) a critical assessment by EU policymakers whether the looming disintegration of solidified global cooperation platforms, such as the G20, into Western and non-Western camps should be actively countered or not.