[NOTE: 
This is a continuation of the seemingly never-ending run-ins between Internet giant Google and emerging economic giant China.] It was perhaps only a matter of time before Google claimed that Internet censorship constituted a violation of international trade law. In November of last year I featured a report by our friends at the European Centre for International Political Economy (ECIPE) arguing that China's censorship is a violation of services trade provisions under the WTO's General Agreement on Trade in Services (GATS). Since then, matters have gotten progressively worse between the two, culminating in Google scaling down its mainland operations and Secretary of State Clinton making a not-so-veiled speech on the importance of Internet freedoms. While we have offered our own take on these occurrences in Foreign Affairs, it appears the Google folks have mounted twin counteroffensives.
First, they have a new article out in Foreign Affairs as well that makes the case for a "digital disruption" that I still believe overstates how the Internet has changed the world. Second, the Google Public Policy blog points us in the direction of a white paper that claims "[i]n addition to infringing human rights, governments that block the free flow of information on the Internet are also blocking trade and economic growth." However, I should of course point out that the white paper does not actually make the case that blocking the Internet hinders economic growth.
Which leaves us with the ECIPE theme of censorship being a trade violation. The paper begins with an urging to get the US and EU to "break down barriers." In this post, I will take special exception to the third point...
Bottom line: it's a lot of wishy-washy stuff that can only make life more difficult for Google. By identifying too closely with the US government at a time when America's capacity to establish international rules is no longer what it was, Google runs the risk of being perceived by others as an American policy tool (if it isn't already). I would be very surprised if Google in concert with other US Internet firms successfully pushed for the successful inclusion of these rules in plutilateral or multilateral deals. Moreover, plans to introduce Internet freedom-style clauses in WTO Doha and the TPP are simply unrealistic. This white paper is a wish list of things that are likely to remain just that--wishes.
Ah, but enough of me. Here's what they have to say on why disrupting the Internet may violate trade rules:
This is a continuation of the seemingly never-ending run-ins between Internet giant Google and emerging economic giant China.] It was perhaps only a matter of time before Google claimed that Internet censorship constituted a violation of international trade law. In November of last year I featured a report by our friends at the European Centre for International Political Economy (ECIPE) arguing that China's censorship is a violation of services trade provisions under the WTO's General Agreement on Trade in Services (GATS). Since then, matters have gotten progressively worse between the two, culminating in Google scaling down its mainland operations and Secretary of State Clinton making a not-so-veiled speech on the importance of Internet freedoms. While we have offered our own take on these occurrences in Foreign Affairs, it appears the Google folks have mounted twin counteroffensives.First, they have a new article out in Foreign Affairs as well that makes the case for a "digital disruption" that I still believe overstates how the Internet has changed the world. Second, the Google Public Policy blog points us in the direction of a white paper that claims "[i]n addition to infringing human rights, governments that block the free flow of information on the Internet are also blocking trade and economic growth." However, I should of course point out that the white paper does not actually make the case that blocking the Internet hinders economic growth.
Which leaves us with the ECIPE theme of censorship being a trade violation. The paper begins with an urging to get the US and EU to "break down barriers." In this post, I will take special exception to the third point...
To realize the full potential of the Internet as a global marketplace and platform for innovation, policymakers in the United States, the European Union, and elsewhere should pursue three steps to break down barriers to free trade and Internet commerce:Elsewhere in the paper, the authors argue that the United States should pursue more explicit references to the free flow of information via the Internet in trade deals as per existing clauses in the still non-operational Korea-US FTA. The paper makes the case that most WTO documents predate the rise of the Internet, so Internet-specific provisions should be included in the Doha Development Agenda. Also, it suggests that the same should be done with the Trans-Pacific Partnership. (The authors erroneously fail to point out that the TPP is already operational.) While I am a Google user--witness this blog--I sometimes doubt whether Google understands IPE. For instance, did it ever occur to the authors that the already much-delayed Doha round would become even more difficult to complete if the US started haranguing other WTO members about the inclusion of Internet censorship provisions? Even more far-fetched is Google's stated desire to foist a more stringent GATS on those wishing to enter the WTO like Russia:
● Focus on and publicly highlight as unfair trade barriers those practices by governments that restrict or disrupt the flow of online information services.
● Take appropriate action where government restrictions on the free flow of online
information violate international trade rules.
● Establish new international trade rules under bilateral, regional, and multilateral agreements that provide further assurances in favor of the free flow of information on the Internet.
If the Doha Round moves forward and negotiations proceed on trade in services, free flow of information should be on the table. There are also opportunities at the WTO in the context of negotiations regarding new Members. Russia is in the final stages of its WTO accession negotiations, and various Middle Eastern countries are negotiating accession too. Many of these countries impose onerous restrictions on the Internet, so pursuing specific agreements in the context of their accessions makes sense.This sort of American exceptionalism is worryingly removed from reality. I simply do not think these folks understand the difficulty of what they propose. The WTO being a consensus-based organization, the US would have to persuade the likes of China and other erstwhile enemies of digital freedom to assent to such a regime. The authors also mention that the Trans-Pacific Partnership (TPP) should make reference to free trade in information. Which, again, would be great if the TPP didn't contain Vietnam among those negotiating to join. The paper itself notes that "Vietnam has blocked Facebook since last year, and is threatening to filter more sites in Internet cafes in Hanoi with a new regulation, to be fully effective in 2011." So good luck there.
Bottom line: it's a lot of wishy-washy stuff that can only make life more difficult for Google. By identifying too closely with the US government at a time when America's capacity to establish international rules is no longer what it was, Google runs the risk of being perceived by others as an American policy tool (if it isn't already). I would be very surprised if Google in concert with other US Internet firms successfully pushed for the successful inclusion of these rules in plutilateral or multilateral deals. Moreover, plans to introduce Internet freedom-style clauses in WTO Doha and the TPP are simply unrealistic. This white paper is a wish list of things that are likely to remain just that--wishes.
Ah, but enough of me. Here's what they have to say on why disrupting the Internet may violate trade rules:
IV. How disrupting the free flow of information can violate international trade rules
Governments often pursue restrictions on accessibility of certain kinds of information in ways that directly hurt international trade and the international trading system. Governments in the United States, the EU and elsewhere have a variety of existing trade agreements – principally the WTO General Agreement on Trade in Services (GATS) – that can and should be applied where appropriate to combat restriction and disruption of information delivered by the Internet.
The GATS has been in place since 1995, and expands the WTO rules from trade in goods to trade in services, from financial services to telecommunications and computer services, including cloud and other Internet-based services. Indeed, decisions by the WTO Appellate Body in recent cases, especially in the case of China’s regulation of the import of various media content, demonstrate that information restrictions are subject to GATS disciplines. The rules in GATS can and should be used to help constrain government behaviors limiting information flow.
The GATS imposes restrictions on the way that governments can regulate trade in services, a broad category including knowledge- or information-based trade. In particular, GATS requires WTO Members to:
● Be transparent about government actions affecting trade in services;
● Provide judicial or independent review of administrative decisions affecting trade in services;
● Reasonably, objectively, and impartially administer rules affecting trade in services;
● Provide non-discriminatory treatment, including treating foreign firms no less favorably than domestic firms;
● Ensure that foreign service suppliers have reasonable and non-discriminatory access to public telecommunications networks, including to move information within and across borders; and
● Provide fair market access for services and service providers.
There are clearly exceptional cases when pledges of transparency, review, impartial administration, non-discrimination and market access will not be followed. But the WTO negotiators set clear limits on the ability of Members to invoke such exceptions. For example, a “public order” exception is only available in situations where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society. And, in order to justify any derogation from the rules, governments must:
● Show that the measure is necessary to achieve a stated objective (that is not simply “public order” but rather a serious threat to society);
● Not have any “reasonably available” less restrictive alternative; and
● Apply the measure without prejudice.
It is now up to other Members to ensure that exceptions do not become the rule -- protecting Members’ right to pursue legitimate policy goals while preventing the broad application of exceptions that would undermine the value of the GATS. Trade officials should continue to enforce international trade agreements, including the legal framework described in more detail in the Technical Appendix to this paper, to promote the free flow of information.
