Could Google-China smackdown lead to WTO complaint?

Updates:

4 Feb -> Drezner holds little hope for a WTO challenge, he doesn't think the differences in national treatment are great enough.  Lester over at IELP Blog agrees.  Having empirical data on differences would be helpful here.

6 Jan -> WSJ Asia piece on Chinese censorship equaling protectionism

26 Jan -> More from ECIPE on the trade options for the US government and why it could prevail in a WTO challenge

14 Jan -> Financial Times and IPEZone
are also reporting that US might have a legal basis for suing China at
the World Trade Organisation. For more background on application of WTO
rules to Internet services and censorship, see previous work by Sacha Wunsch-Vincent and Tim Wu as well as a more recent 2009 working paper, Protectionism Online: Internet Censorship and International Trade Law, from the free market think-thank European Centre for International Political Economy.

15 Jan -> Via IELP Blog, Foreign Policy makes the argument that web censorship just an excuse to drive out foreign competition and give a boost to Chinese brands.


Citing instances of espionage and surveillance of its customers, Google announced in coordinated fashion yesterday that they are no longer willing to continue censoring results on Google.cn, and threatened that it might withdraw operations from China entirely.  The move is being viewed widely as a positive step, and Google should be commended for supporting human rights norms of privacy and freedom of expression within Internet governance.

But some are wondering if Google would actually walk away from the China market.   Frankly, China routinely leverages the size of its market and counts on the fact that no business dares to give up a market of that size. But when businesses are willing to play rough and threaten exit they are more likely to get positive results than when they kow-tow.  That being said, you don't make the move Google did without a plan.  And that makes me think we might be witnessing the precursor to a major development in the application of trade principles to Internet governance.

As IGP talked about in its 2007 paper, Google has long framed censorship as a trade issue.  Google’s invocations of trade came after it and other U.S. high-technology firms were subjected to severe criticism by advocacy groups and the U.S. Congress for collaborating with China’s censorship and human rights abuses. In explaining its decision to establish a censorship-compliant Google.cn site, the company noted that persistent and systematic Chinese government efforts to censor Google.com made its service slow and unreliable, and that that effect “appears to have been a major – perhaps the major – factor behind [Google’s] steadily declining market share” in China. Google concluded its testimony with the following call to action:

“The U.S. Departments of State and Commerce and the office of the U.S. Trade Representative should continue to make censorship a central element of our bilateral and multilateral agendas. …At the risk of oversimplification, the U.S. should treat censorship as a barrier to trade, and raise that issue in appropriate fora.”

If the Chinese government refuses to ease its censorship policies aimed at services accessed through Google.cn, might their ongoing efforts to censor the same services accessed through Google.com become the basis for a trade discrimination complaint?  The USG diplomatic machinery is already at work, we'll see which government flinches first.

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