Security Externalities of Trade

This project studies how trade enriches and empowers states as well as how this relationship between commerce and power affects international relations. Such an investigation is impor- tant because most recent studies have focused on the non-military benefits of trade. As a result, researchers often argue that increasing trade between countries would strengthen their peace- ful relations because states do not want to lose these benefits. This line of explanations, though dominant, would struggle at explaining conflicts where states military power is further boosted by their openness to international trade such as Chinas recent conflict with the U.S. and Rus- sias conflict with Ukraine and the EU. Our project can contribute to the existing wisdom via a careful analysis of how states translate trade gains into military power, a mechanism that has been sidelined for decades. It can therefore also contribute to more effective policymaking, particularly about trade policies and conflict management. To carry out this research, we will take three main steps. First, we study whether and how trade affects states military power. To do so, we draw from recent developments in network analysis which will allow us to examine how much states trade with each other, how their trade partners trade with other countries, and how central each state is in the respective networks over time. Building on this measurement, we will also examine how it affects country As relations with country B. Second, we expand our focus and study how factors beyond a pair of countries further complicate the above relationship. In particular, we study how preferential trade agree- ments (PTAs), in addition to promoting trade within a community, also exclude other countries. This can make the excluded states less capable of exploiting gains from trade and potentially more willing to fight. Finally, we will draw policy lessons from the above studies and examine different tool kits states can tap into to reduce security concerns and manage potential conflict. These can include targeted measures such as dual-use export controls or broader regimes such as economic embargoes. Taken together, our project proposes innovative ideas and measurement that advance trade-conflict studies and holds important implications for policymakers. 1