SSU Forum “Economic Coercion: Discussions in Japan and the U.S.”

On August 19, the Security Studies Unit at the Institute for Future Initiatives of the University of Tokyo and Institute for Asian Studies of Asia University co-hosted a forum in which Dr. Kotaro Shiojiri, Visiting Fellow of the Woodrow Wilson International Center for Scholars, was invited to deliver a keynote presentation on discussions in Japan and the U.S. about how to respond to economic coercion. Following the presentation, Professor Arata Kuno from Asia University and Associate Professor Ryo Sahashi of the University of Tokyo joined the conversation before receiving questions from the floor. The forum was moderated by Associate Professor Sahashi.

Keynote Presentation
Dr. Shiojiri opened his presentation by defining economic coercion with case examples in the U.S., EU, and Japan. He explained key concepts surrounding economic security, economic statecraft, and economic coercion, citing discussions taking place in Japan and the U.S. Regarding the legal aspects of economic coercion, he presented issues related to the WTO, customary international law, and domestic laws, and added an explanation on political and economic viewpoints as well. Dr. Shiojiri then discussed possible responses to coercion from the following three perspectives: analysis (which includes understanding the current situation, data, collaborating with the industrial sector, etc.), deterrence (considering different approaches to deterrence: “punishment” as a measure to confront coercion and “denial” to depreciate the effects of coercion), and countermeasures (referring to the EU’s Anti-Coercion Instrument (ACI) and other examples) . He concluded by sharing his views on prospects for future initiatives in Japan, collaboration between Japan, the U.S., and other like-minded partners including the G7 countries, and potential cooperation between the public sector and the business community.

Discussion and Q&A
Following Dr. Shiojiri’s presentation, Professor Kuno introduced the conditions for effective deterrence proposed by Eaton and Engers to discuss whether the introduction of countermeasures against economic coercion would work as deterrence. In particular, he shared his views on how the conditions laid out by Eaton and Engers apply to the countermeasures outlined in the EU’s ACI, touching on how they relate to the draft articles on Responsibility of States for Internationally Wrongful Acts. He then raised questions such as “Should Japan, too, introduce a framework to enable imposition of countermeasures against coercion?” “Or would it be more realistic to introduce a framework for depreciating the effects of coercion rather than imposing countermeasures?”

Associate Professor Sahashi joined the discussion and explained possible responses to coercion, the characteristics of Chinese coercion and response from the U.S., and implications from security theories, while summarizing and characterizing various concepts related to economic coercion in the course of his discussion. Concerning the coercer and its target, he noted that the target is not necessarily the government, but very often, the industry or private sector of the other country. He then delved into such topics as forming an international norm, the pros and cons of punitive deterrence measures, and the method of collaboration between the government and private sector in relation to possible Japanese responses.

After the discussion, the floor was opened for questions and an active Q&A session followed. A question was raised on the consistency between coercion countermeasures including those set out in the EU’s ACI, and WTO rules and other international laws in practice (e.g. their relation to DSU Article 23, provisions of the Responsibility of States for Internationally Wrongful Acts, and the applicability of security exceptions in GATT Article 21). It was pointed out that, while there are no clear answers to the question, coercion countermeasures are often justified by applying a broad interpretation of the security exception clause, as is often the case in the U.S. discourse. In response to a question about the particularity of Chinese coercive acts (difference with coercive acts by other countries), it was suggested that while arbitrariness and overtness are sometimes cited to describe Chinese coercion, there is not much difference from the acts of Western countries, when the definition of economic coercion is expanded. For example, measures imposed by Article 301 of the U.S. Trade Act and export control of semiconductors can also be considered as economic coercion. It was also pointed out that Chinese coercive acts were inventive and unique, often incorporating informal means. Compared to the acts of the U.S., they may seem to be consistent with WTO rules (SPS, AD, and other WTO agreements). When asked about available means of support that can be provided to third-party countries targeted by coercion, the panel cited possible efforts including supplying alternative goods between like-minded countries, providing tariff cuts and other preferential treatment for coerced countries by reviewing EPA/FTAs, and devising trade promotion activities, in addition to the IPEF and other existing initiatives. The discussion also covered such topics as the usefulness of WTO’s dispute settlement mechanisms in dealing with coercion and ways to cooperate with private businesses (e.g. establishment of reporting systems and development of an overall environment through information security, etc. that will facilitate information provision by private companies).

* This forum was held under the auspices of the Ministry of Foreign Affairs of Japan.

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