Shaping a New International Trade Order: Competition and Co-operation among the European Union, the United States, and China

Shaping a New International Trade Order

Following the establishment of the World Trade Organisation in January 1995, American and European trade relationships were for a time characterised by ‘competitive interdependence’, as the US and EU simultaneously aimed to advance their commercial interests in third countries. Under conditions of competitive interdependence, trade actors’ resorted to certain policy choices in order to gain advantage for their producers while restricting others’ ability to enter a market. However, in the last decade, European and American trade policymakers have faced the challenges of a more competitive world and the emergence of newer trade powers such as China. As a result, both actors have veered away from multilateral deals as their preferred trade policy choices.

In this paper, Diego A. Salazar-Morales and Mark Hallerberg use the Sbragia (2010) framework to analyse the trade policy shifts made by the EU and the US in the last decade. The authors argue that what had been a relationship of ‘competitive interdependence’ has recently changed to become a trilateral structure in which both the EU and the US have focused their attention on countering Chinese competition.  Moreover, China’s emergence has also pushed the US to reinvigorate the role of unilateralism and the EU to bolster bilateralism as they both seek to secure their commercial shares worldwide.

Download the working paper here.

Diego A. Salazar-Morales is a Research Associate at the Hertie School in Berlin.

Mark Hallerberg is Dean of Research and Faculty and Professor of Public Management and Political Economy at the Hertie School.


Keywords: Trade Policy, Patterns, Typology, Unilateralism, Multilateralism