Contest or Complement? Interrelation between Unilateral and Bilateral Approaches within EU Trade and Sustainable Development Governance in Southeast Asia

The European Union (EU) has recently introduced innovative unilateral trade instruments to foster enforceability, and complement the long-standing bilateral mechanism for trade and sustainable development (TSD) governance. How do the EU’s shifting geoeconomic priorities affect the complementarity between these two approaches within EU TSD governance in Southeast Asia? This article argues that the rising geoeconomic objectives have led to contestation and undermined the complementarity between the unilateral and bilateral instruments in the region. Utilizing the EU-Indonesia free trade agreement (FTA) negotiation as a case study and applying a modified two-level game as the explanatory framework, the analysis draws on documents, 33 semi-structured interviews, and field observations in both Europe and Indonesia, particularly including elite interviews with chief negotiators. This research finds that at the international level, the EU’s trading partners, as seen in Indonesia, leverage their geoeconomic positions and bilateral FTAs for more policy flexibility and exemptions from EU unilateral TSD regulations. Simultaneously, the deployment of unilateral instruments has delayed FTA progress and, both legally and discursively, undermined the legitimacy of the EU TSD governance. At the domestic level, fragmented normative coalitions within both parties have weakened internal pressure on negotiators. This research contributes significant theoretical and empirical implications to the EU TSD Governance in the Global South in the context of the rising global geoeconomic turn.