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Abstract

Does economic interdependence lead to conflict or peace? More specifically, which strategies that states pursue under economic interdependence are common sense or unnecessarily antagonistic? I argue that national security investment screening, a geoeconomics tool for states under economic interdependence to protect their trade vulnerability, is a natural response to economic interdependence and is likely to become stricter over time. States will become more concerned with vulnerability, as interdependence implies dependence, and will take concrete steps to reduce their dependency on the other state in the trading relationship. However, this does not mean that national security investment screening will torpedo relations between the two countries. Certain industries are more securitized than others, and the broader trading relationship can remain intact. I draw on two investment screening mechanisms in the US, CFIUS and the newly proposed Outbound Investment Security Program, to evaluate how definitions of national security in investment screening have changed over time with respect to economic competition. I find that the definition of national security is politically determined and often vague; the broader trading relationship can sustain itself despite these skirmishes around politically charged industries. Further research is needed to determine the exact tipping point between cooperation and conflict under economic interdependence.

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