Governing EU Investment, Technology and Trade Policy: Screening, Security and Policy Change

Abstract

In a geopolitical environment where geoeconomics now influences trade, security, and investment policies, access to and control over certain technology becomes vital. Some EU countries have implemented restrictions on the sale of and foreign investment in specific technologies. Screening investments serves as a safeguard against the transfer of technology and know-how through foreign acquisitions. The EU has an investment screening mechanism (ISM) to which reforms have been proposed, and which he papers in this panel analyze various aspects of EU strategy, examining the intersection of investments, technology, trade, and security to help us better understand how their interconnectedness shape EU trade and investment policies, and economic security more broadly. Pandiyan’s paper emphasizes the crucial role of security concerns in the EU’s trade and investment tools. Using process tracing, she analyzes how technology-related issues and fears of technology leakage affect investment screening. Egan and Guay raise concerns that foreigners may engage in regulatory arbitrage to exploit weaker screening rules in some countries to access the EU market. Because the EU’s ISM includes both supranational and national elements, the authors see it as encompassing both ‘soft’ and ‘hard’ power, raising challenges to the EU’s position in a competitive geopolitical landscape. They propose a new lens for assessing investment screening as a tool of economic security. Vlasiuk Nibe builds on this by analyzing how the EU uses ISM as a central tool in its economic security agenda. She analyzes why the EU has struggled to get Ukraine to implement a comprehensive cross-sectoral ISM, and how Ukraine balances the trade-offs between prosperity and security, highlighting both domestic and international factors. The paper adds theoretical and empirical insights on economic statecraft and geoeconomics. Like Vlasiuk Nibe, Adriaensen, Feltkamp, and Herranz Surrallés ask: why is the EU not succeeding with what it aspires to? They evaluate the EU’s expanding geoeconomic agenda through 10 legislative acts, each involving complex arrangements between the Commission and Member States. The results offer insights into the nature of delegated tasks and introduce a new functional typology for their execution. Taking a broader view of the EU’s “strategic turn” in a geopolitical environment, Riga engages recent literature to highlight the EU’s shift away from technocratic and liberalization-oriented approaches toward a more interest-driven and security-conscious approach. Riga suggests that revisiting the idea of functional spillovers helps us understand how trade policy developments have spilled over into other fields of EU policymaking.

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