Weaponized Trade and Economic Coercion

Methodology

The project team compiled an extensive dataset of case studies for the project based on coercive measures reported across newspaper articles, government websites, academic literature and other sources. The resulting dataset is believed to be the world’s largest and most comprehensive open-access database of trade-related economic coercion.

The dataset focusses on case studies across a twenty year period from 2005 until the end of 2024, a period that coincides with the Global Financial Crisis and also with China’s economic ascendency and its growing influence in international rulemaking, as well as the declining leadership of the US and the newfound assertiveness of Russia, culminating in its further invasion against Ukraine in 2022.

Inclusion/Exclusion Criteria

To be included in the dataset, the trade incidents needed to meet the definition of Weaponised Trade, even if it was referrred to by another term, such as Economic Coercion or similar. In other words, trade disputes were excluded for the following reasons:

  • None of the sources claimed that the measure had a punitive, coercive or constraining element. The mere presence of a trade barrier, or a measure inconsistent with WTO rules, is not itself indicative of Weaponised Trade.
  • The measure was made in response to an open military conflict, regardless of whether the measure was imposed in response to a resolution of the United Nations Security Council or was a form of collective action.
  • The measure was part of a tit-for-tat trade war in which states impose protectionist measures on each other to protect their domestic industry,
  • The measure did not have a trade-related element – for example where the measure was principally an investment restriction. While such measures may constitute economic coercion, they do not fit within the definition of Weaponised Trade.
  • The measure was a denial of service through a cyberattack, or similar.
  • Generalised complaints about coercion that did not identify a specific product, industry or sector being targeted.
  • Measures which are justified on national security grounds, unless coercive allegations are made by the target in response. For example, we have included the banning of Chinese firm Huawei from 5G networks in a number of countries as an instance of weaponised trade (trade in services) because even though countries justified China’s exclusion on national security grounds, China alleged the measures had punitive, constraining and/or coercive intent.

Threats of trade action were included in the dataset, even where no actual measure eventuated, provided the other definitional criteria were met. This reflects research findings (in the context of sanctions) that threats themselves can be coercive and meaningfully influence the behaviour of a target country.[1]. Mere statements of discouragement were excluded – such as a government generally discouraging tourists to travel to a particular country (as opposed to issuing a formal warning against travel).

Definitional Ambiguity – A Note

It is important to note that, despite our rigorous criteria, some might dispute our inclusion or exclusion of a particular trade incident from the dataset. The potential for disagreement reflects the definitional ambiguity surrounding Weaponised Trade.[2] All researchers in this field face the same dilemma regarding the threshold for what constitutes Weaponised Trade. In many ways, efforts to identify instances of Weaponised Trade is an inherently subjective exercise, with no objective criteria suitable to resolve the legal and definitional issues.

Indeed, almost all instances of Weaponised Trade involve dual narratives invoked by the target and the instigator. For the sake of completeness we have endeavoured to include all of these case studies in the database, and we have not sought to adjudicate cases, simply to document their dimensions, impacts, and responses.

Language Limitations

Another limitation was our reliance on mainly English language sources. Some case studies had very limited English language material, and this carries the potential of bias towards certain perspectives. Searches in a broader range of languages would likely have yielded additional examples not covered in English-language sources. Mitigation strategies to address this shortcoming included contacting professional colleagues to ask about examples of Weaponised Trade in their jurisdictions, and undertaking country-domain-specific searches for the language specific equivalent of the term Weaponised Trade or derivatives thereof.  We also sought input from a Chinese-language researcher to help identify Chinese-language regulations, government statements, and media articles.

Counting of Instances

As with the presentation of any data, decisions had to be made about how to count a single instance of Weaponised Trade. Where a single type of mechanism (eg the suspension of import permits) impacted a related range of goods (eg animal produce) over an extended time frame (eg two years), this has been counted as a single instance of Weaponised Trade. For example, the Chinese suspension of multiple permits for Australian abattoirs for both beef and sheep meet, impacting ten Australian exporters across a two-year period has been counted as one instance of Weaponised Trade.[3] Conversely, where records disclosed coercive measures that could be differentiated by products, mechanisms, impacts and/or timespan, these were recorded separately. For example, a series of Russian decrees and directives laid the foundation for a ban on food and other agricultural products targeted at all countries imposing trade sanctions on Russia. Thus, the target countries included a large range of states – between five and eleven at any given point in time, including the European Union.[4] For the purposes of the Weaponised Trade database, each of the targeted states is listed as a separate instance, noting that the EU is counted as a single entity unless specific Member States are separately targeted, as was the case between China and the Netherlands in relation to medical supplies, where the EU at large was not targeted.[5]

Classification of Sectors

A non-technical system of classification was used to group targeted sectors, with the database being tagged with a range of relevant keywords to allow the case studies to be found by interested readers. In addition, wherever possible, the general tags have been supplemented with tags indicating the HS Code of Goods at a Chapter level. While the database would ideally categorise goods in detail by HS Code, specific data is rarely available even where a coercive measure is based on a formal regulation, let alone when it is an informal restriction identifiable only through media and other accounts. Services have been tagged by sector as well as a generic ‘service’ tag. Where there is an investment component together with a trade issue, this has been tagged with an ‘investment’ tag. Digital trade and currency each have their own distinct category.

Within one case study, it is common for a range of formal and informal measures to be used by the imposing country. For example, an formal import ban may be accompanied by informal slowing of processing of goods at the border. Where the sources suggested that multiple mechanisms we being used, we have included each mechanism in our statistics. For this reason, the total number of Weaponised Trade measures will exceed the number of case studies.

Treatment of Weaponised Trade involving Services

The treatment of services in the dataset requires further explanation, especially for those familiar with WTO legal principles. Services are classified differently from the perspective of trade professionals as distinct from the typical language used by media or business.  We have chosen not to categorise Weaponised Trade instances by their mode of supply [6] as this does not clearly indicate who the instigator and target of the measure are for the purpose of our database. 

For example, Saudi Arabia imposed a ban on its citizens travelling to Iran in 2016. [7]  In trade law parlance, this would be considered a ban on the export of services by Iran, with Iran being the provider of services under GATS Mode 2 (consumption abroad of services).  In non-technical discussion, Iran would be referred to as the target of measures by Saudi Arabia. Our database counts this as a ‘miscellaneous measure’ imposed by Saudi Arabia against Iran in order to avoid the confusion of import versus export restriction in services. 


India’s ban on apps including TikTok is a restriction on a foreign service provider (Chinese company ByteDance) offering services to Indian consumers.[8] Depending on the specifics of the app and its services, this could be one of several modes of supply under the GATS (usually Mode 1 and/or Mode 3).  This categorisation does not help explain the motivation of the instigating country or the impact on the target country. For that reason our database and this report has used language consistent with our treatment of situations involving goods. We count these in our database as another type of miscellaneous measure, even though it is substantively different from the tourism example above from the perspective of the GATS.



[1] Schneider, Gerald; Weber, Patrick M. (2019) : Biased, But Surprisingly Effective: Economic Coercion afer the Cold War, CESifo Forum, ISSN 2190-717X, ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München, München, Vol. 20, Iss. 04, pp. 9-13 at 9, commenting on Morgan, T. C., N. Bapat and Y. Kobayashi (2014), “Threat and Imposition of Economic Sanctions 1945–2005: Updating the TIES Dataset”, Conflict Management and Peace Science 31, 541–558.

[2] See previous reports from this project – https://dx.doi.org/10.2139/ssrn.4154030

[3] For the full case study, see Beef and Sheepmeat (Australia – China) Weaponised Trade and Economic Coercion Database (2024), online at https://economiccoercion.com/2024/10/10/beef-and-sheepmeat-australia-china/

[4] For a translation of the regulations, see https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Russia%20Extended%20Food%20Import%20Ban%20Through%20End%202021_Moscow_Russian%20Federation_12-18-2020

[5] See MEDICAL SUPPLIES & BOYCOTT THREAT (NETHERLANDS – CHINA), Weaponised Trade and Economic Coercion Database (2024), online at https://economiccoercion.com/2024/10/17/netherlands/

[6] Article 2 of the GATS. For an explanation of modes of supply of services, see thttps://www.wto.org/english/tratop_e/serv_e/gatsqa_e.htm

[7] https://economiccoercion.com/2016/10/31/travel-and-trade-iran-saudi-arabia/

[8] https://economiccoercion.com/2020/06/30/mobile-apps-china-india/