Study on the Most Relevant Redefinitions Required in the European Union’s Trade Policy in Light of Ongoing Developments in the International Geopolitical and Geoeconomic Landscape

The foreign direct investment (FDI) screening framework of the European Union (EU) has evolved from a largely national competence supported by EU-level coordination into a more structured instrument of economic security governance. Regulation (EU) 2019/452 created a cooperation mechanism through which Member States and the European Commission exchange information on foreign investments likely to affect security or public order. Building on the experience of this framework, the European Commission launched a reform proposal in 2024, followed by a provisional political agreement between the EU co-legislators in 2025. This paper examines the current EU framework for FDI screening and compares the provisions of Regulation (EU) 2019/452 with the main elements of the ongoing reform process. The analysis focuses on the shift from voluntary coordination among Member States toward a more convergent framework based on a common minimum scope and key minimum requirements for national screening mechanisms. Using comparative document analysis of the current Regulation, the Commission’s 2024 proposal and the 2025 provisional political agreement, the paper addresses two research questions: (1) how does the reform modify the current EU framework for FDI screening, and (2) what are the practical implications of these changes for public administrations and companies involved in sensitive transactions? The findings indicate that the reform strengthens procedural convergence among Member States by expanding the scope of national screening, clarifying procedural steps and improving the collection and exchange of relevant information. At the same time, the final decision on individual transactions remains at Member State level. This creates a governance trade-off between greater EU-level coherence and continuing national discretion. For public administrations, the reform increases the need for institutional capacity, inter-agency coordination, sectoral expertise and secure information management. For companies, it implies earlier and more detailed due diligence, higher compliance costs and the integration of screening considerations into transaction planning from the outset, especially in high-risk sectors and complex cross-border transactions. The paper contributes to the academic and policy debate by translating the evolving EU reform agenda into an operational governance perspective, highlighting the balance between procedural convergence, national discretion, administrative effectiveness and business predictability.