Fighting China's Censorship Through The WTO?

Earlier this week, I mentioned that Google seems to be cooperating with China's requests that it censor websites that its government deems harmful. Today, the Wall Street Journal reports a new wrinkle in China's battle to censor computers: it might conflict with its obligations under the World Trade Organization. U.S. Secretary of Commerce Gary Locke and U.S. Trade Representative Ron Kirk sent a joint letter to China today that demands China lift a requirement that computers sold to its people include software to censor the internet. They claim it violates World Trade Organization guidelines. I'd give them an "A" for effort, but find it unlikely their argument will change China's censorship policy.

Let's break this down. First from the WSJ article:

The U.S. letters "expressed that the U.S. government is seriously concerned about the Green Dam [requirement], including wide-ranging concerns about the scope of the measure, the censorship implications, trade impact and security flaws which create serious problems for the IT industry and Chinese consumers," the U.S. official said.

Green Dam is China's censorship software that, as of July 1st, must be installed in any computer sold in China. Here's an expert from today's Commerce Department press release that explains our officials' argument:

The letter points out that the proposed new rule raises fundamental questions regarding regulatory transparency and notes concerns about compliance with World Trade Organization (WTO) rules, such as notification obligations. Locke and Kirk also listed for MIIT Minister Li Yizhong and MOFCOM Minister Chen Deming numerous concerns raised by global technology companies, Chinese citizens, and the worldwide media about the stability of the software, the scope and extent of the filtering activities and its security weaknesses. All of these problems have serious implications for consumers and businesses.

This all seemed like Chinese Greek to me, so I called to a trade lawyer with significant WTO expertise to help me make sense of it. He asked not to be named, as this could affect some of his clients' business.

The U.S. is claiming that China's insistence on requiring this software violates "notification obligations" under the WTO. Essentially, the WTO says its members cannot create requirements that might inhibit trade. If new technological requirements, like including new computer software on computers sold to your people, are imposed by a country, then it must notify the WTO well before that requirement takes effect. That way, the firms located in other member nations can have ample time to prepare.

As you can see, this isn't exactly an argument that would prevent censorship. Instead, the U.S. is essentially saying, "Hey you didn't give us enough warning that you wanted to censor stuff." To which China can reply, "Oh. Our bad. Yeah, we like to censor the internet. Now you know. Please comply."

If the U.S. computer companies don't like censorship software, China can just say that's their problem. China is not saying U.S. firms can't sell computers in China, just that they must have the Green Dam software on the machines they sell there. That's why it's unlikely that the WTO would see this action as protectionist.

My source thought it was relatively unlikely that this tactic by the U.S. would scare the Chinese, as they have pretty strong WTO expertise these days. At best, the U.S. can hope to start a conversation about the censorship software requirement. Unfortunately, the U.S. has little leverage to prevent the Chinese from censoring the internet its people use.