The Economic Security Tightrope: EU Economic Security Strategy, Friend-Shoring and European Relations with Indo-Pacific States

By Michael Reiterer and Lee Il Houng

1.5.2024

The Journal of East Asian Affairs

Economic security and like-mindedness often go together without analysing costs and risks, which allows populists to advocate simple solutions. While there are valid strategic and security reasons to re-organise supply-, production-, and value chains, there is a need for close cooperation between the private and public sector to find the right policy mix. Otherwise, industrial policy and protectionism may go hand-in-hand in a problematic way, and across the board application of security induced measures may create unnecessary costs and lead to subsidy wars on top of trade wars. Rules have become even more important to avoid creating a situation in which might is right. It is in this context that this paper provides an analysis of the European conceptualisation of economic security in terms of the re-organisation of supply and production chains, investment policies, impact on trade policy, and measures designed to increase the resilience of economies, all meant to contribute to security by economic means. That is, we address how to deal with a political constellation in which security considerations overshadow economic gains, in which traditionally grown supply and production chains and relationships are altered. Of special interest is the analysis of “friend-shoring.” We also examine the impact all this has on EU diplomacy vis-à-vis the Indo-Pacific, notably in comparison to the same impact in its trans-Atlantic dimension.

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