Paulsen: The Past, Present, and Potential of Economic Security

Mona Paulsen (London School of Economics - Law) has posted The Past, Present, and Potential of Economic Security (Yale Journal of International Law, forthcoming). Here's the abstract:

In a highly interdependent globalised economy, industrialised states have increasingly invoked economic security rationales to justify exceptional measures, even if they violate international trade rules. Over the past decade, governments have announced new economic security strategies that embed this logic in a range of trade issues, such as export controls, screening investment flows, or building resilient supply chains. Economic security is thus deeply embedded in modern policy frameworks. The conventional position among commentators is that these economic security strategies present novel threats to multilateral trade governance. But this Article demonstrates that the conventional position is short-sighted. Rich, detailed archival research reveals how ‘economic security’ claims are not dramatically new. The historical record provides evidence for why security has never been exceptional to the foundations of global economic institutions but is a structural feature that helped organise the competitive conditions among strategic resources and goods. The Article reconstructs the arguments for multilateral coordination on trade while pursuing economic security strategies in the early Cold War, helping commentators and governments assess each as constituting elements of an overarching plan for leadership in economic growth and military preparedness.

This Article comprises an in-depth archival investigation into two case studies where the United States (US) used trade to fulfil its foreign economic policies in the late 1940s and early 1950s. First, the US adopted unilateral trade controls to bar exports of technology and materials to Eastern Europe. While US businesses and Congress approved this strategy, the nascent international community brought together by the General Agreement on Tariffs and Trade (GATT) offered targeted support to the US without confirming the legality, morality, or longevity of US plans. Second, the US established a conference of ‘free world’ economies to allocate the short supply of selective critical minerals and commodities after the invasion of Korea in 1950 – in what one US congressperson called a ‘super-government’ cartel.

Both case studies detail how the US carefully engineered legal principles, used different techniques to regulate trade among allies, and simultaneously relied on discriminatory practices against rivals. As history demonstrates, US trade policy never separated economics and security. A central lesson from this Article is that trade and multilateral coordination were vital to US economic statecraft. The Article depicts how governments underwent complex bargaining to dictate the breadth and depth of security interests for global economic governance at the dawn of the Cold War. Furthermore, it gives life to our understanding of the birth of global trade governance, addressing the trade-offs that every policymaker must make in weighing the future functions of law. Accordingly, by learning from history, states can reposition legal debates on pursuing multi-dimensional security imperatives while fostering strategies sensitive to how multilateral coordination can help sustain trade and alliances.