Legal and Economic Implications of Travel Restrictions in the China-US Trade Dispute

Abstract

The trade dispute between China and the US has brought new problems for international trade law, mainly regarding travel restrictions as a potential tool for the economy. Although trade disputes have usually focused on tariffs and barriers to market access, travel restrictions, such as restrictions on visa access or travel advisories, have emerged as an important form of economic diplomacy. This article discusses how travel restrictions create challenges for the current international laws, particularly the General Agreement on Trade in Services (GATS), which covers areas like tourism, education, and business travel. The main objective of this research is to explore the application of national security exceptions under the General Agreement on Trade in Services (GATS) to travel restrictions. The study introduces the Proportional Security-Trade Integration Model (PSTIM) as a framework for balancing national security concerns with trade. Using case studies, the PSTIM assesses the legal and economic implications of US visa restrictions on Chinese students and China’s travel advisory restrictions. The results reveal the economic impacts, such as the US education sector is estimated to experience a $15 billion to $20 billion loss of revenue each year due to decreasing enrolment of Chinese students, and the tourism between the US and China has an estimated loss between $25 billion to $28 billion due to travel restrictions. The results further confirm the evidence of how travel restrictions fundamentally contradict the key principles of GATS, especially market access and non-discrimination. The research advocates for a restructuring of the WTO security exceptions to limit their misuse, which is currently becoming more prevalent, resulting in expanding the meaning of the original purpose of the exceptions. The research emphasizes the need for a balance between national security and trade. The research presents policy reforms such as a Security-Trade Advisory Committee established by the WTO specifically to be used for ensuring national security measures are balanced, transparent, and assessed based on evidence. This study contributes to academic scholarship and provides practical proposals for policymakers concerned about preserving a fair and rules-based international trading system.