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The term “economic security” has drawn increasing attention recently, especially since the enactment of the Economic Security Promotion Act in Japan in May 2022. The policy especially targets semiconductor supply chains, which are critically important across industries. What, then, does economic security really mean? How relevant are semiconductor supply chains? What policy measures have been implemented, and which of them are effective? Our new book, Economic Security and Semiconductor Supply Chains, presents an effort by scholars and practitioners from various fields, including international economics, international trade law, and international relations, to address these questions.
 
Chapters 1 and 2 by NISHIWAKI Osamu define “economic security” and explore the significance of semiconductor supply chains. Today, semiconductors are essential for building and maintaining the social infrastructure; their production processes are distributed and linked across different countries through supply chains. As their production cannot be contained within national borders, the interdependence between countries through these supply chains leads to a mutual vulnerability whereby one country can exploit another. International institutions, most notably the World Trade Organization (WTO), have helped manage such risks through interstate cooperation. However, the rise of China has shaken this U.S.-based order, and economic security at the country level has come to the front.
 
Building upon SUZUKI Kazuto's classification of the two aspects of economic security—the defensive aspect, which involves means to overcome the vulnerability exploited by other countries, and the offensive aspect, aimed at securing technological advantages—NISHIWAKI points out that the newly legislated Economic Security Promotion Act includes both of these goals. In Chapter 4, MATSUMOTO Izumi details the specific measures that the United States and Japan have taken in respect of these two aspects and explains them from the perspective of international trade law, including their background and significance.
 
How should we evaluate these policies, particularly Japanese ones? Chapter 3 by TODO Yasuyuki provides an answer to this question based on his expertise in international economics. The geopolitical risks surrounding Japan's involvement in semiconductor and electronics supply chains are especially high compared with those in other countries, given its dependence on China and Taiwan. However, to address this issue, the government should not rely solely on measures to bring back production to Japan or target-specific firms as a subsidy policy. It should allocate more resources to reinvigorate competition in the market and provide public goods that markets tend to undersupply; for example, helping Japanese firms diversify their supply chains, particularly toward friendly countries with fewer geopolitical risks, and supporting research and development.
 
In Chapter 5, YOSHIMOTO Iku (the author of this article) explores how policies related to semiconductor supply chains have been formed through domestic political processes in the United States. Even though consistent policies seem to have emerged (export controls as offensive economic statecraft and enhancing the resilience of supply chains as defensive economic security), in their background are various political and economic interests held by policymakers and private firms. As a result, existing policies reflect the balance of these interests. For example, from the perspective of the presidential leadership, the protection of domestic industries—most notably through semiconductor industrial policies as reflected in Donald Trump's goal of reducing trade deficits or in Joe Biden's “foreign policy for the middle class”—has had a significant impact. Conversely, the diversification of interests within the semiconductor industry stemming from the proliferation of its supply chains has made it less susceptible to state interventions that can increase production costs or damage supply chains.
 
Although the authors of this book argue from the viewpoints of their respective fields, they share a willingness to offer common ground for discussing the relationship between economic security and semiconductor supply chains. To discuss economic security as a policy, we first need a clear definition of the term, its goals and means to achieve them, and the effects of actual policies. As YOSHIMOTO has demonstrated, in the United States, “economic statecraft” emerges from a mixture of various interests, including protectionism and promotion of industrial policies, which might then lead to inefficiency owing to the prevention of competition and not result in expected effects, as TODO points out. We hope that this book will help readers understand and analyze the economic security surrounding semiconductor supply chains, and consider what to expect and what to do in the near future.
 

(Written by YOSHIMOTO Iku, Lecturer, Graduate School of Arts and Sciences / 2023)