The EU, the US, and trade policy: competitive interdependence in the management of globalization

Competitive interdependence characterizes the EU–US relationship vis-à-vis third markets. Each defines success in relation to the other while each also views the other as its key geo-economic competitor in the world economy. CI has developed as the EU has attempted to manage globalization in the field of trade policy by focusing on the multilateral level and then by reversing course and privileging the regional, which in turn has expanded the EU's territorial influence. The reversal occurred largely because the Bush Administration in Washington pursued free trade agreements (FTAs) in a process of ‘competitive liberalization’. The US outflanked the EU by negotiating FTAs that favored US firms in third markets. The EU, to protect its own firms, then began to negotiate FTAs itself. Geo-economic competition between the EU and the US is thus key to shaping EU trade policy.