Pre-emptive depoliticisation: the European Commission and the EU foreign investment screening regulation

ABSTRACT

In March 2019 the European Union adopted the first pan-European investment screening framework, thus joining the bandwagon of growing investment screening mechanisms around the world. This article explores why the European screening framework was adopted swiftly and with no politicisation, even as the negotiations unfolded against the background of heightened politicisation of trade and investment policy. The paper develops three expectations: (1) converging member state preferences; (2) securitisation of investment policy; and (3) Commission entrepreneurship. It then explores them empirically through process-tracing, drawing on extensive interviews with the actors involved. We argue that the European Commission played a pivotal role. To avoid falling into another strand of politicisation and to defuse political mines, the Commission engaged in a ‘pre-emptive depoliticization’ strategy that shortened the policy process, limited the number of actors involved, and justified the policy options in a legalistic framing.

KEYWORDS:

• Depoliticisation; European Commission; FDI; investment screening; ISM

Acknowledgements

In addition, the paper has been presented at the 17th Biennial EUSA Conference (Miami, May 2022), the conference ‘The Politics and Regulation of Investment Screening Mechanisms’ held at Princeton University in November 2022, and the 18th Biennial EUSA Conference (Pittsburgh, May 2023). We would like to thank Dirk De Bièvre and Andreas Dür for their helpful feedback during the work on the paper, the anonymous reviewers for their constructive comments to the manuscript, as well as to all our interviewees for sharing their insights with us.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2019:079I:TOC

2 Austria, Denmark, Finland, France, Germany, Italy, Latvia, Lithuania, Poland, Portugal, Spain.

3 Proposal for ensuring an improved level playing field in trade and investment attached to the Letter to the Commission by France, Germany and Italy, February 2017.

4 10 MEPs from European People’s Party: Weber, Caspary, Saifi, I. Winkler, Cicu, Proust, Quisthoudt-Rowohl, Reding, Schwab, Szejnfeld, European People’s Party.

5 For example EU’s laws in energy sector on certification of foreign-owned / controlled companies.

6 Respective policy proposal was submitted in May 2021

7 Proposal for a Regulation of the European Parliament and of the Council on foreign subsidies distorting the internal market {SWD(2021) 99 final} - {SWD(2021) 100 final} - {SEC(2021) 182 final}

8 Regulation (EU) 2022/1031 of the European Parliament and of the Council of 23 June 2022 on the access of third-country economic operators, goods and services to the Union’s public procurement and concession markets and procedures supporting negotiations on access of Union economic operators, goods and services to the public procurement and concession markets of third countries.

9 Proposal for a Regulation of the European Parliament and of the Council on the protection of the Union and its Member States from economic coercion by third countries market {SEC (2021) 418 final} - {SWD(2021) 371 final} - {SEC(2021) 372 final}

Additional information

Funding

This paper has been presented at the workshops ‘Reacting to the Contestation of Trade Policy in the Transatlantic Area’ organised by Dirk De Bièvre, Andreas Dür and Scott Hamilton at the University of Antwerp in November 2021 and University of Salzburg in May 2022 under financial support by the Jean Monnet Network for Transatlantic Trade Politics via the Erasmus + programme of the European Union (Grant Number 620450-EPP-1-2020-1-CA-EPPJMO-NETWORK). This research is part of the project ‘Beauty Contests: The Changing Politics of Foreign Investment in Europe’ financed by the Independent Research Fund Denmark (1028-00003B).

Notes on contributors

Anna Vlasiuk Nibe

Anna Vlasiuk Nibe is a PhD Candidate in the Department of Political Science and Public Management at the University of Southern Denmark (Denmark).

Sophie Meunier

Sophie Meunier is a Senior Research Scholar at the Princeton School of Public and International Affairs, Princeton University (USA).

Christilla Roederer-Rynning

Christilla Roederer-Rynning is a professor (with special responsibilities) in comparative European politics in the Department of Political Science and Public Management, University of Southern Denmark (Denmark).