The Impact of Polycrisis on GPNs—a Focus on the EU’s Trade Policy Response to the Climate Crisis

This paper explores how policy responses to the polycrisis seek to reshape Global Production Networks, encouraging new forms of decoupling and recoupling. The author focuses on the EU’s trade policy responses to the climate crisis, especially carbon tariffs and the deforestation regulation. These new measures represent a shift from traditional trade policy and a conscious effort to “decouple” EU Global Production Networks from certain geographies where negative environmental externalities are considered unacceptably high. The author argues that, compared with previous state interventions motivated by strategic or geopolitical objectives, this represents a novel form of sustainability-based decoupling that is likely to reshape incentive structures and the geography of global production networks.