Not Trading With the Enemy: The Case of Computer Chips

Abstract

Drawing on the analysis of international trade law and the research on the regulation of the semiconductor industry in key players, the United States of America (US), the Netherlands, and Japan, this paper explores under which conditions export controls are compatible with the international trade law framework. To this end, it focuses on the scope of national security exceptions under the agreements of the World Trade Organization (WTO) and examines to which extent export controls on the semiconductor industry can be justified under such exceptions. It discusses the direction in which the current practice and jurisprudence of WTO panels are heading and the possible effects of governments’ ‘decoupling’ strategies toward China on shaping international trade law. This paper suggests that governments might have difficulties justifying their imminent cybersecurity and geo-economic concerns under existing security exceptions and that they should consider either clarifying the scope of such exceptions or changing the approach to dealing with national security issues under the WTO framework. Export controls, computer chips, semiconductors, WTO law, decoupling with China, security exception, geopolitical rivalry