This thesis provides a comprehensive analysis of Foreign Direct Investment (FDI) within the European Union (EU), exploring the nuanced interplay between EU trade policies, external economic shocks, and their cumulative impact on FDI flows and positions across member states. The study's objectives were to elucidate how these dynamics influence the EU's attractiveness to foreign investors and to identify actionable strategies for enhancing equitable economic development within the Union. Through an extensive review of existing literature, analysis of FDI data, and examination of key EU policy milestones, this research offers insights into the complex factors shaping FDI trends in the EU.