Wednesday, October 20, 2010

WTO Complaint Against China's "Great Firewall" Being Contemplated

WTO The ABA Journal carried an interesting international trade-related story recently regarding rumors that the United States and the European Union are considering filing a complaint against China under the dispute settlement processes of the World Trade Organization (WTO) with respect to China's restrictions on Internet access.  Also sometimes referred to as the "Great Firewall of China," the restrictions prohibit the vast majority of persons in China from freely accessing websites outside of China and from obtaining what the Chinese government considers to be politically senstive information.

The theory is that the Great Firewall violates China's obligations under the General Agreement on Trade in Services (GATS) by discriminating against foreign companies that maintain websites.  Article II of GATS contains a "most favored nation" principle which requires WTO Member States "to accord immediately and unconditionally to services and service providers of any other Member treatment no less favorable than that it accords to like services and service suppliers of any other country."  Thus, if China allows a different level of access to different Internet websites, it may be violating this provision.  In addition, Article XVII of GATS contains a "national treatment" obligation, which requires China to accord services and service suppliers of other WTO Member States treatment no less favorable than treatment given to domestic Chinese service providers.  This obligation only applies to those services sectors for which China has made a specific service commitment, however.

There are several possible weaknesses with these legal theories.  First, there may not be discrimination in fact if China places the same restrictions on all websites.  Second, it is not clear whether China has made a specific commitment under GATS which includes Internet service providers. Third, China is likely to argue that any such discrimination qualifies for an exception under Article XIV of GATS because the restrictions are necessary to protect public morals or to maintain public order.  As previously reported on this blog, there have been a number of WTO challenges to Chinese law and practices in the last couple of years and China has been found in violation of its WTO obligation on more than one occasion.  Therefore, this may be a case to watch. 


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Ultimately the WTO gambit will not work. However, corporate social responsibility initiatives will work. Google and GoDaddy’s defiance of China’s censorship mandate illustrates the power of corporate social responsibility initiatives to influence and reshape the repressive policies of authoritarian regimes.

Secretary Clinton’s recent remarks about the information curtain dividing the world early this year, reminded me of the apartheid era where much greater injustice and unspeakable acts against humanity were challenged and ultimately overcome through the use of corporate codes of conduct.

Given the success of codes of conduct in ending apartheid, we should look at applying the same principles to lift the information curtain China and in other repressive countries.

This was the subject of an article on the International Business Law Advisor—-The Great Firewall of China: How Lessons from the Apartheid Era Can Lift the Information Curtain published on January 22, 2010

Posted by: Santiago Cueto | Oct 24, 2010 12:22:42 PM

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