The European Union’s New Trade and Economic Powers : Theory-guided Analysis of the Anti-Coercion Instrument

Abstract

In recent years, the European Union has strategically transformed its trade policy in response to increasing geopolitical competition and weaponised economic interdependence. The Anti-Coercion Instrument (ACI), officially adopted in 2023, marks a pivotal development in the EU’s trade and foreign policy toolkit. Historically, the EU has been seen as a normative actor grounded in multilateralism, liberal principles, and rules-based governance. However, it now positions trade as a vital tool to create open strategic autonomy. This thesis explores how the ACI embodies and implements the EU’s evolving approach to power within global politics.

While much existing research has concentrated on the ACI’s legal design and institutional consequences, there has been limited exploration into how this tool impacts the EU’s ability to wield various forms of power in international relations and its broader power characteristics. This thesis addresses this gap by analysing the ACI through the theory of power, utilising Michael Barnett and Raymond Duvall’s taxonomy of power as an analytical framework. Their taxonomy categorises compulsory, institutional, structural, and productive forms of power, which can be used to thematically present the different powers that the ACI possesses.

This study is grounded in the field of international relations and the traditions of realism, liberalism, and constructivism, which form the basis for this qualitative theory-guided content analysis. The main sources include the European Commission's proposal of ACI, the final regulation (2023/2675), the impact assessment report, and various supporting legislative texts, official communications, and policy documents. The analysis is thematically organised around Barnett and Duvall’s four types of power, providing a comprehensive overview of the EU’s new trade and economic powers closely linked to foreign policy.

The findings indicate that the ACI establishes a more intricate and layered form of power. It allows the EU to respond directly to coercion (compulsory power), introduces an efficient legal process that circumvents unanimity voting, and creates a nexus between trade and foreign policy (institutional power). It leverages EU alliances and legislative powers as well as shapes market interdependencies (structural power) and constructs a new identity as a good geopolitical actor (productive power). This analysis reveals that the ACI is not just a defensive trade measure but reflects a broader paradigm shift in EU external policy. By combining trade and security policy, the EU transcends normative rhetoric, adopting tools that align with a more competitive global landscape.

This thesis enhances academic discussions by clarifying the conceptual and empirical consequences of the EU’s geoeconomic shift. It shows that the ACI not only addresses immediate threats but also reshapes the EU’s power dynamics. In doing so, the research deepens our understanding of how the EU navigates the blurred boundaries between trade, security, and foreign policy in a multipolar world. Ultimately, the thesis concludes that the ACI embodies a hybrid form of power projection combining both normative and geopolitical power. Consequently, the EU has embraced value-based realism, in which it continues to uphold its rules, legislative influence (termed the Brussels Effect), norms, and values, while increasingly gearing up to protect these through hard power strategies in its engagement with power politics.one that challenges dichotomies between soft and hard power, and that repositions the EU not just as a rule-setter, but as a strategic geopolitical actor in a contested international order.