I actually saw this idea floated on a couple of blogs last week and ignored the issue as it is really stupid. Unfortunately it seems to be gaining traction in the media, some trade lawyers have chimed in, and the US Trade Representative’s office has not formally closed the door on the possibility. So I’m kind of being dragged into this kicking and screaming, as it were.
Bottom line: does the U.S. have a solid case against China that would allow them to prevail in a WTO dispute? Someone please shoot me in the head, and be quick about it, please.
Some groups are calling on the United States to challenge China‘s “firewall” before the , as a bilateral row over cyberattacks on Google adds to trade tensions.
As President Barack Obama awaits answers from Beijing on the cyberstrikes, Washington is being asked to contest China’s as a breach of global trade rules to which the Asian giant, as a WTO member, is subject.
“The US can argue that China’s ‘Great Firewall’ — a system of filters and bottlenecks that effectively shutters the country within its own intranet — is an illegal restraint on Peter Scheer, executive director of the First Amendment Coalition. (AFP)because it bars foreign companies from competing, via the Internet, in the vast Chinese market,” argues
First comment, to this Mr. Scheer: the First Amendment does not apply in China. Apparently this particular organization has taken its US law-based agenda overseas. (OK, that was unduly snarky. I don’t know anything about this group, and while I am on board with their ultimate goals, I think using the WTO as a forum to reach those goals is sorely misguided.)
Second, where’s the restraint on trade? Someone please tell me. With respect to Google, I don’t see a national treatment issue. Google is free to stay in China and operate just like any other search engine (e.g. Baidu) as long as it follows applicable China laws. Where’s the discrimination? (No one has alleged a violation of MFN principles, so I won’t get into that.)
Third, the WTO has no problem with censorship per se, usually discussed in terms of either national security or public morals. Look no further than the A/V Products case, the appeal to which was won by the U.S. last year. Nowhere in that opinion does the panel say anything to suggest that China’s censorship regime is in violation of any WTO law.
More weirdness ensues:
China’s action to halt Internet commerce at its “borders” is akin to a government regulation requiring perishable agricultural exports from the US to sit for days on China’s docks prior to transhipment to internal distribution facilities, Scheer said.
I’m not exactly sure what “Internet commerce” means. E-commerce? Providing content? I’m confused.
This is a complex legal area. China law on what “e-commerce” means has changed quite a lot over the past five years or so. I’ll give Mr. Scheer the benefit of the doubt on the nomenclature issue.
Let’s assume for the moment that he is talking about certain services that are currently restricted (i.e. Value-added Services). These were dealt with in China’s GATS (WTO law dealing with services) Schedule, agreed to when China acceded to the WTO ten years ago.
But even if there is some sort of dispute about Value-added Services and China’s service commitments, I’m not sure what that has to do with Google. I thought the issue was censorship, or perhaps hacking. Either way, that has nothing to do with any restriction on Google that is inconsistent with WTO law.
Not so, say some trade lawyers, who believe that if Google is being treated differently than domestic search engines, then there could be a national treatment matter. Sure. Where’s the evidence for that? I haven’t heard anything so far. Google has been operating over here for a while, and as long as they followed the rules, they were able to carry on with their business, right?
They further say that the censorship exceptions (national security and public morals) have narrowed in recent years and that China’s regime is possibly vulnerable.
I don’t buy it. Granted, I have not researched this issue in depth, although I have looked at China’s services commitments many times in the past. Sure, the language was written a long time ago, things have changed, and some folks might be able to argue about what does/does not constitute Internet commerce and so forth.
Fair enough. But the basis of this challenge is Net censorship, and unless someone can clearly show that Google is being treated differently than other companies here, there is no discrimination. I don’t think anyone would argue (without giggling a lot) that Baidu doesn’t have to follow censorship rules.
I also don’t see any merit in arguing that censorship operates the same way as an import restrictions. Are we supposed to equate imports sitting on the dock, for example held up because of a hygiene standard, with Net content that is being blocked at the border?
That’s just weird. Information, in and of itself, is not a product or service. Providing information can be a service, but that service is subject to the normal rules of any country, which may include censorship. Moreover, if those rules apply to all content providers, there is no discrimination.
I’ve gotten myself into a lather. Better wrap this up.
I would be happy to change my mind on this issue should new facts come to light or if I’m way off on my WTO law, but so far this idea of a WTO case sounds like a lot of wishful thinking by the media, which is trying to milk this Google incident for a couple of extra days’ coverage.