Trade without trust: procedural coexistence and trade-security in international economic law

Abstract

This paper aims to identify a predispute governance gap at the trade-security interface and develops an institutional architecture for lawful US-China trade and investment under strategic rivalry and limited trust. It combines functional analysis of the conditions required to complete lawful transactions with comparative institutional analysis of WTO transparency and dispute settlement, investment screening, export controls, sanctions and domestic security review. Lawful transactions can become commercially infeasible before prohibition because firms and financial intermediaries remain uncertain about coverage, required evidence, settlement, compliance, review and exit. The resulting financing, compliance, delay and unwinding costs can dissipate commercial value before a formal measure or dispute emerges. The argument is conceptual and institutionally focused. It does not test the Board empirically or resolve all political feasibility questions. Further research should assess pilot sectors, statutory design, third-jurisdiction spillovers and interaction with existing WTO, sanctions, export control and investment-screening regimes. Once governments reach limited political agreement on sectors or transaction classes, the proposed Trade and Investment Board provides a phased architecture for covered transactions. It defines scope, separates technical review from political bargaining, preserves lawful settlement channels, monitors compliance and mitigation and specifies review, remedies and exit in advance while retaining existing national-security authorities. The framework provides an implementable architecture for designated sectors once both governments agree on categories of lawful exchange. Clear procedures could reduce avoidable disruption to lawful commerce, financing, supply chains and payment channels while preserving security authority. When mistrust cannot be eliminated, disagreement can still be made governable. To the best of the authors’ knowledge, this paper introduces a transaction-level, predispute institutional architecture for governing lawful exchange before uncertainty produces commercial paralysis or matures into interstate dispute.