Pursuing geo-political interests through investment policies: undesirable and (un)feasible


The post-Cold War era saw the foundations being laid for a new global order in which the realms of politics and security on the one hand and the economic domain on the other, were relatively well-defined and distinct from one another. Security issues no longer dictated international relations and trade and investment decisions were mainly taken on the basis of economic considerations. However, recent developments suggest a significant shift with the emergence of geo-economics. In the contemporary environment, states increasingly pursue geo- political and security interests through trade and investment policies, thereby diverging from traditional reliance on political and military policies. Consequently, geopolitical power is increasingly derived from and dependent on economic power.

While employing trade and investment policies to address geopolitical and security matters presents an appealing and potentially effective alternative to direct military confrontation, this approach simultaneously poses challenges and partially undermines the established liberal international economic order and its associated institutions and norms developed in the post-Cold War era. Moreover, despite the significant influence of geopolitical and strategic motives in state decisions to enter into preferential trade agreements, international economic law offers limited leeway for states to employ trade and investment mechanisms in pursuit of geopolitical and security objectives once such agreements have been concluded.