The COVID-19 crisis and the protective turn: How EU´s call for “strategic autonomy” challenges the liberalization of critical infrastructure in global trade and investment policy

The contribution builds on a knowledge interest in the prospects and limits for “deglobalizing” policy responses to the COVID-19 crisis in the realm of critical infrastructure. The latter is situated at the interface of historically changing patterns of conflict between market expansion and social protection as well as the control over strategic important domestic infrastructure and offensive interests in the liberalization of FDI flows. Moreover, concerns over geoeconomic dependencies have evolved significantly in recent years due to the special attention to China as "systemic rival". The protection of critical infrastructure gained additional momentum due to the attempts of governments to counterbalance earlier privatizations of strategic assets and to compensate the loss of economic policy space at a domestic level. The COVID-19 crisis is far from being a starting point for contestations of the treatment of areas like e.g. telecommunication, energy or transportation in global trade and investment policy. Early signals for a protective turn can be traced back to policy disputes over the scope of liberalization obligations within the framework of WTO´s trade in services agreement GATS (and so called “WTO plus”-agreements like TTIP), the increasing pressure on the global, ISDS-based investment protection regime, to the gradual extension of FDI-Screening mechanisms at various scales and strongly increased in recent years in the light of rising economic nationalism. But obviously the outbreak of the COVID-19 pandemic triggered a series of policy responses that indicate an even further reaching challenge to the continuity of hyperglobalist and new constitutionalist frameworks. In context of the EU, the COVID-19 pandemic led for example in spring 2020 to a special appeal by the European Commission to the member states to tighten their FDI-screening mechanisms against foreign investors due to the public health crisis and increasing economic vulnerability. This was followed by a general review of EU´s official trade and investment strategy under the header of “strategy autonomy” (the process is still underway, the official communication is announced for February 2021). Against this backdrop the paper aims to gain a better understanding of the “deglobalizing” impact of these policy responses on the liberalization of critical infrastructure and potential areas of geoeconomic conflict with EU´s main trading partners (as e.g. the US and China). In this regard the paper dedicates special attention to the reappraisal of the protection of critical infrastructure during the COVID-19 crisis and EU´s more recent policy shift to the increase of resilience and “strategic autonomy”. The envisaged analysis deals with a “moving target”. However, this scoping exercise on the realignment of EU´s trade and investment strategy offers at an early stage critical reflections on future fields of conflicts over the treatment of critical infrastructure on a global scale. Theoretically, the contribution aims to foster dialogue between Neogramscian strands of International Political Economy (especially through a “new constitutionalist” lense) and the rise of geoeconomic perspectives on pending trade and investment disputes.