I am delighted to announce the publication of Joel Slawotsky's new article, "The Fusion of Ideology, Technology and Economic Power: Implications of the Emerging New United States National Security Conceptualization,"which appears in the Chinese Journal of International Law (2021; jmab007, https://doi.org/10.1093/chinesejil/jmab007). It's abstract suggests both its scope and importance:
Abstract: The historical narrative of the national security exception in trade and investment has long been understood from the perspective of measures to defend the nation from military attack or territorial invasion. The cornerstone of the existing global governance model encourages non-discriminatory trade and vigorous cross-border investment, thus the security exception in international economic agreements was envisioned as a “last-resort” allowing a nation to override international economic obligations only if necessary and invoked in good-faith to protect essential security. However, in a world of emergent technology, with potentially devastating future effects, theorizing national security is more difficult and complex. Moreover, the two primary global powers are locked in a hegemonic struggle. The United States has in recent years aggressively resorted to national security to justify investment and trade policies against China. The foundational basis for doing so is a new conceptualization of national security constituting a fusion of interests encompassing the ideological, technological and economic. This re-conceptualization radically re-defines the understanding of national security. Taken to its logical conclusion, the new conceptualization of security risks an unfettered broadening of the exception, driving a transformative re-alignment in the global international economic architecture.
The article is worth a careful read. It suggests, again, that in this age of profound transformation, back doors have become front gates, and that the exceptional has now become the norm. The ramifications are not confined to the United States but suggests, precisely because it does come form an imperial metropolis, that decoupling is proceeding apace and that globalization will soon be a profoundly different space.
The Introduction follows below along with very brief observations.
1. Professor Slawotsky effectively examines the transformation of the national security exception within the liberal democratic camp. It effectively examines the way that liberal democracy through its networked structures of legal internationalism in the economic sphere, sought to construct a web of regulation that would protect a vast space for unconstrained economic activity. And it nicely suggested the great emerging challenges to the vision (and assumptions) that had previously made the core premises on which this legal internationalism was based both plausible and apparently attainable.
2. Nonetheless, that analysis also points to the crisis (yet another one) for the normative structures and ideology of liberal democracy especially in its self conception of globalization as this happy and pacific space within which all states in sovereign equality will progress, united in their diversity, toward the "City on a Hill" (Matthew 5:14) under the guidance of the United States as its vanguard. Two forms of challenge are worth highlighting.
3. The first is changes in the nature of conflict, some of which was technology driven. Moving from first to sixth generation warfare involves both tech enhanced manipulation of space and time (see HERE) but also tech enhanced projections of destabilizing power that uses an adversary's apparent strengths against it (in the case of the United States its open and porous systems of economic, cultural, social, and political participation) to produce internal disintegration at little external cost. "In a new form of compellence, technology, political economy, war by remote, stand-off strikes, cyber warfare, malware, spywares, firewalls, backdoors and sanctions will play a major role. So be ready if anything related to computers and software goes wonky to the extent of taking over control, decapitation, short circuiting and even fire." (Sixth generation warfare). But it also suggests a new approach to the concept of total war that delies and effectively makes irrelevant the constraints (now increasingly obsolete) of the complex set of rules through which post 1945 warfare was to be first civilized and then effectively eliminated in its most egregious forms.
4. The second was the increased stakes and greater stakes in the emerging competition-conflict areas that increasingly were viewed not merely as challenging U.S. economic dominance, but also as projected to undermine the integrity of the liberal democratic order itself by exploding the stress points of internal factional fighting within the core of the liberal democratic imperial camp. When the technologies of commerce, of social discourse, and of cultural shifts are instrumentalized as truely effective weapons of warfare; when technology and its advances can be weaponized even in its most benign forms; when the technologies of modeling and predictive analytics can itself be turned to advantage by an adversary, then the old rules that were founded on categorical distinctions based on fixed function no longer work.
5. The problem was exacerbated, of course, precisely because it became clear that the United States and the liberal democratic camp was playing by rules that were of little interest to others. That difference in approach to rule compliance then produced the unequal playing field that could augment the disadvantage of the post 1945 openness principles that no longer seemed to guarantee harmony on a global scale. This became particularly apparent where state secrets laws and the nationalization of data was coupled with the weaponization of tech.
6. In that context, and ironically enough, it was the leading forces of those who rejected the open textured post 1945 system and who turned it to national advantage, that began to drive changes in the logic and application of the national security exception within the liberal democratic camp. And thus the great irony--the vanguard forces of decoupling, and of imperial competition--will see its wish fulfilled. Thsi article nicely analyzes its trajectories.
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The Fusion of Ideology, Technology and Economic Power: Implications of the Emerging New United States National Security Conceptualization
I. Introduction
1. The historical narrative of the “national security” or “essential security” exception (“security exception”)1 in international trade and investment agreements has long been understood from the perspective of “use of force” in State-to-State disputes, i.e., physical defense of the nation.2 Conceptualized in the decades following WWII with the understanding global governance should encourage nondiscriminatory trade and vigorous cross-border investment,3 the security exception is grounded ideologically on the international law principle of necessity.4 Thus, a State invoking the exception in an international economic agreement is ostensibly required to demonstrate “necessity”; the need to respond to a dire and imminent peril, show no other viable alternative was available, and provide proof the invoking State was not a contributor to the crisis.5 However, this standard—taken from the ILC Articles on State Responsibility—and used in several arbitrations arising from the U.S.-Argentinian BIT, has been critiqued since “the legal test of ‘necessary’ as expressed in the exception clause and the ‘necessity’ defense in customary international law are separate legal tests”.6 While the definition and contours of “necessity” remain amorphous, there is agreement that nations can invoke the exception only in good-faith.7
2. The security exception has been interpreted relatively infrequently and in fact the first WTO interpretation did not take place until 2019.8 Yet when interpreted, the exception has consistently been construed within the parameters of defense to military threats or territorial integrity as opposed to other objectives such as national or societal goals.9 Even a State’s measures during an extreme financial crisis has not been found to satisfy “necessity”10 except when a nation faces catastrophic financial ruin leading to imminent “total collapse of the Government and […] State” which arguably implicates territorial stability and physical defense of the nation.11
3. Corroborating the orientation of security as geared towards defending the peace and ensuring territorial integrity,12 the 2019 WTO Panel decision in Ukraine discussed the national emergency clause of the GATT essential security exception within the framework of military conflict and territorial defense.13 The Panel Report explained the circumstances in this dispute were “very close to the ‘hard core’ of war or armed conflict”14 defining an “emergency in international relations” as:
a situation of armed conflict, or of latent armed conflict, or of heightened tension or crisis, or of general instability engulfing or surrounding a state.15
4. Similarly, the 2020 WTO Panel interpreting the TRIPS security exception16 held essential security interests were relegated to defense of the population and territory and triggered when threats related to the “defence or military interests, or maintenance of law and public order interests” are sufficient to establish the existence of an “emergency in international relations”.17
[T]he [essential security] interests identified […] are ones that clearly “relat[e] to the quintessential functions of the state, namely, the protection of its territory and its population from external threats, and the maintenance of law and public order internally”.18
5. Notwithstanding the consistency of conceptualizing security in terms of physical defense, two transformational developments are creating interrelated complexity with respect to interpreting the exception. First, emergent and dual-use technology renders security threats no longer limited exclusively to armed attack or threats to territorial integrity.19
Cyber-threats, social stability, economic warfare, environmental threats, and terrorism impinge on national security as much as (or more than) open military conflict. […] Furthermore, national security is not only military preparedness; national security encompasses a wide range of important bulwarks in defence of the good of the nation such as peace, prosperity, and stability.20
6. Second, the United States, sensing its hegemonic status at risk,21 has expansively invoked national security in a variety of trade and investment contexts citing justifications far beyond the historical narrative of armed conflict or physical defense.22 Illustrative is the U.S. claim that Huawei—a global leader in 5G23—is a State-linked entity24 presenting a threat to U.S. national security.25 The U.S. has even spearheaded a global campaign to encourage allies to ban Huawei.26 In response, Huawei argues that “competitive jealousy” is the precipitating factor in U.S. national security claims.27
7. Unquestionably, the impact of the geo-political competition with China has significantly impacted the U.S. conceptualization of national security. Demonstrating the interrelation between emerging technology and the hegemonic rivalry, when tightening foreign investment restrictions and imposing export restrictions, the U.S. has asserted national security concerns over China’s military-civilian fusion strategy, stating:
The [United States] is implementing the Foreign Investment Risk Review Modernization Act to update and strengthen the capacity of the Committee on Foreign Investment in the United States (CFIUS) to address growing national security concerns over foreign exploitation of investment structures, which previously fell outside CFIUS jurisdiction. This includes preventing Chinese companies from exploiting access to United States innovation through minority investments in order to modernize the Chinese military. The United States has updated its export control regulations, particularly in light of Beijing’s whole-of-society MCF strategy and its efforts to acquire advanced technologies related to hypersonics, quantum computing, artificial intelligence, biotechnology, and other emerging and foundational technologies.28
Moreover, the effects of the hegemonic contest on the conceptualization of national security will likely be long-term. As discussed below, notwithstanding claims that the erosion in U.S.-China relations was proximately caused by the Trump Administration, it is not probable the U.S-China dynamic will revert to a warmer relationship in the near future. The fissures were seen during the Obama Administration and early indications augur for a continuation of the trend and perhaps even an intensification going forward under President Biden.29
8. The U.S. has also invoked GATT’s “Article XXI—to impose steel and aluminum tariffs on many of its trading partners” based upon national security threats.30 Invoking the national security exception against allies is not in harmony with notions of defending against military attack or territorial integrity. The extensive invocation of national security by the U.S. has raised accusations that invoking national security serves as an excuse for protectionism and violates international economic law.31
9. While the U.S. imposition of tariffs on allies is clearly an expansion of national security beyond the existing narrative and into the economic realm,32 the framework for dramatic escalation and further expansion of national security was established in 2020. Exemplified by a May 2020 strategy document, and in a series of significant policy speeches by U.S. government leaders during the summer of 2020, the United States is reshaping the understanding of national security into a fusion of inextricably-linked overlapping interests encompassing ideological, technological and economic factors.
10. The invocation of measures based upon this new model of security threats is illustrated in U.S. actions taken against WeChat and TikTok linking national security with Chinese social media and communications businesses. For example,
[The] Department of Commerce […] today announced prohibitions on transactions relating to mobile applications (apps) WeChat and TikTok to safeguard the national security of the United States. The Chinese Communist Party (CCP) has demonstrated the means and motives to use these apps to threaten the national security, foreign policy, and the economy of the U.S.33
11. The fusion of interests is also increasingly impacting financial markets. In banning U.S. investors from certain Chinese corporations, the U.S. portrayed China’s domestic model of economic governance as a tool of the Chinese State34 constituting a dire threat to the U.S. economy and national security.
[T]he PRC’s military-industrial complex […] constitutes an unusual and extraordinary threat […] to the national security, foreign policy, and economy of the United States.35
12. The expanded understanding of security interests is also creating a domino effect wherein other nations re-orient their investment and trade policies.36 For example, China is engaging in more robust and expansive notions of security encompassing data generated in electric vehicles.37 In a further exemplar, the new China Export Control Law restricts exports when trade constitutes threats to national security conceptualized as infringement on Chinese security and interests.38
Throughout the ECL, references to “national security” in prior drafts were replaced with references to “national security and interests.” Distinguishing “national security” from “national interests” provides an explicit basis for export control measures designed to advance foreign policy or industrial policy goals unrelated to conventional defense and security risks.39
13. Moreover, China’s Draft Data Security Law broadly conceptualizes “security interests” far beyond typical military defense, encompassing national interests and goals such as economic security and social stability.40 The Draft Data Security Law also incorporates a broad-based theory of extra-territorial jurisdiction as the law is applicable to data activities both within China and extraterritorially when conduct “may harm China’s national security, public interests, or the rights of Chinese citizens may be subject to this law”.41
14. Globally, security concerns are increasingly a significant factor in trade and investment policies.42 States are linking civilian technologies and consumer products to national security: Germany banned U.S.-made dolls;43 Russia banned LinkedIn;44 and India has blocked TikTok.45 Furthermore, in what may be a harbinger of nations corroborating other nations’ findings of security threats46 (which may lead to alliances of self-interest with respect to security determinations as discussed below), President Trump’s Executive Order banning TikTok cited to India’s ban as support for finding legitimate national security threats posed by TikTok.47
15. Investment review mechanisms are expanding notions of national security. An example is the potential expansion of security threats to embrace threats to “strategic assets”.48 There is a push in the EU for FDI screening to focus on strategic assets, particularly industrial power and important economic sectors. “Strategic assets are crucial to Europe’s security, and are part of the backbone of its economy”.49
16. Strategic assets are defined broadly as involving energy, essential public services, financial stability or a threat to a “fundamental interest of society”.50 Fundamental interests might be threatened when a foreign government entity is connected to data, media, financial infrastructure and real estate.51
17. Conceptualizing security as a fusion of economic, ideological and technological supremacy has immense and potentially far-reaching implications on international economic governance. In a re-conceptualized understanding of security, securing supply-chains and retaining economic sectorial strength may fall within the ambit of legitimate security. But risks abound that States will use security as an excuse for improper motives such as protectionism and may incentivize escalation of security-based measures imperiling the existing trade and investment architecture.52
18. Despite the potentially sweeping effects on international economic law, the re-conceptualization of security has received scant attention. Moreover, national security as a rationale for measures overriding international investment and trade obligations are being increasingly challenged and arbitral bodies will need to address and resolve whether security threats are indeed triggered in contexts beyond the conventional understanding of national security.53 This Article endeavors to remedy the dearth of literature and discusses the incipient re-conceptualization’s impacts on international economic law. The Article observes that given the political-economic perspective of the U.S-China hegemonic contest, it is likely that the U.S. re-definition of national security will increasingly be incorporated globally with comprehensive implications on international economic governance.
19. The Article proceeds as follows: Part II discusses the historical narrative of the security exception as invocable when necessary for the physical defense of the national bastion. Part III focuses on the U.S.-China hegemonic rivalry and recent pronouncements which emphasize how the strategic competition is affected by the fusion of ideological, technological and the economic interests. Part IV analyzes how the new broadened conceptualization will impact international economic law.
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