European Union trade policy finds itself at a crossroads. After three decades of neoliberal dominance in the design of economic policy at large, and trade policy in particular, recent changes in the international system have led to a dramatic rupture of the liberal international order. 

The authors of this policy brief –  Werner Raza and Bernhard Tröster – argue that nostalgia for the good old days of hyper-globalisation and the liberal international order is neither warranted nor helpful. They call on progressive policymakers to adapt to a new reality, in which political-economic competition between the great powers is likely to increase and trade policy is used for promoting national security objectives, including by extracting concessions from other countries. 

Given such an environment and the EU’s pronounced external dependencies, EU trade policy will have to be realigned and made to serve an economic policy strategy that is no longer focused on supporting export-led growth but is based on the concept of defensive regionalism. Such an economic model wants to leverage domestic sources of growth, in particular by stepping up investment in the green and digital transformation, and combine this with extending the European social model, while using trade policy to promote the security of the supply of critical goods, increase the EU’s economic resilience and promote international cooperation. Six guiding principles, as proposed in this policy brief, aim to support such a new trade policy agenda.

With respect to international economic governance issues, the EU should spearhead a discussion about a new and more balanced global trade order. By deepening the sustainable trade agenda in cooperation with trade partners and helping trade partners to implement their own green transformation processes, the EU could regain international recognition and help to promote a more cooperative post-neoliberal international system.

The draft of this policy brief was discussed at the expert seminar on 13 November 2025 Evolutionary leap of the European trade policy.

The policy brief is part of the Progressive Economic Network project, co-organised by FEPS, the Friedrich-Ebert-Stiftung (FES) and Das Progressive Zentrum (DPZ). For this publication, the Austrian Federal Chamber of Labour (AK EUROPA) joined as a partner.