Who is afraid of European economic diplomacy?

Even if economic diplomacy is nothing new - at neither the national, nor at the European level - fast-growing economic and geopolitical interconnectedness is creating a vastly different phase in its practice.

 

The EU has realized this and has stepped up activities in the field from 2013, turning to a more strategic effort in 2015.

 

The authors argue that European actors will have to find effective and efficient ways of dealing with the two key challenges that might hinder its strategic development. At the political level, this concerns the clash between the member states’ short-term interests and the EU’s longer-term goals; while at the business level, the main challenge is the diverging priorities between companies and sectors, with particular emphasis on the ‘cleavage of interests’ that separates multinational corporations (MNCs) and small and medium-sized enterprises (SMEs), both at home and abroad. How should the EU and its member states go about dealing with these challenges?

 

First, the engagement of EU member states and other key stakeholders needs to be strengthened. The aim should be to develop effective mechanisms for joint identification and the prioritization of European economic diplomacy’s objectives, which are understood as a blend of both distinct EU-level and more cross-cutting EU/EU member state elements. This includes the development of proper impact assessment of EU missions and other economic diplomacy actions. Also, information-sharing with and among European businesses should be intensified, along with intelligence-gathering on the key economic undertakings of foreign actors, both inside and around the EU. 

 

Second, regulated dialogues and control mechanisms for European economic diplomacy within the European Council are required in order to minimize the risks (whether real or perceived) stemming from attempted EU competence creep. In addition, in order to foster efficiency and accountability, the more practical side of decision-making responsibilities should be delegated to (existing) working groups that are headquartered in Brussels. As for actual implementation, strategic economic diplomacy will entail the development and pursuit of targeted (that is, country/regionspecific) priorities, relying on ‘on-site’ EU and EU member states’ representatives in order to achieve tailored goals - as opposed to a clearly flawed one-size-fits-all approach. Finally, on a broader level, such a strategic overhaul would also yield major ‘normative’ returns, by helping to establish a concrete framework that is able to explicate and promote European values. 

 

Ultimately, upgrading European economic diplomacy is about maintaining a level playing field for businesses within and outside the EU, upholding a rules-based system of global trade and economic governance, and promoting sustainable models of development. Economic diplomacy would thus not only be useful for the EU to foster greater internal prosperity and stability, but it would also prove a very good approach for reviving Europe’s slowly shrinking relative weight within the global arena.