Google and Goliath
How the WTO and free trade unknowingly pioneered free speech
A Chinese flag flies over the company logo outside the Google China headquarters in Beijing.
Even by its own standards, it was dramatic news when Google claimed in January 2010 that the People’s Republic of China had not only attacked its servers and hacked into email accounts of Chinese dissidents, but also stolen data belonging to various multinational corporations. Google’s response was immediate and, some would say, bold: It threatened to leave China unless the country’s meticulous control of the Internet came to a halt. Thus began the story of how a private corporation ventured into one of the biggest challenges in decades against the Communist Party in China.
The Chinese regulatory environment for dotcom firms is, to say the least, rather unfriendly. While there are many foreign investors complaining about China, dotcom firms fare significantly worse than other sectors. China’s censorship of the Internet is arguably the most pervasive and effective in the world. Literally all Internet traffic (including chats and SMS) going in and out of the country is monitored. This Big Brother-type system is supported by the government’s employment of several hundreds of thousands of security police specialists in what is called the Great Firewall of China.
Few people outside China realize how different the Internet looks there. The vast majority of most popular sites on the Web are blocked. Websites unavailable to Chinese users include not only well-known brands such as Flickr, YouTube, Amazon, Twitter and Facebook, but also a host of 18,000 non-Chinese media, social media, streamed video and blog portals. Nevertheless, if not content-wise, the void created by this censorship does not last long, since local Chinese copycats—more pliable to the needs of censorship—quickly fill up the places left behind by blocked sites.
The government makes clear to those who are allowed, and willing, to operate in China, that they will be severely restricted in what they can do. It is made clear that failure to comply with government guidelines puts anyone at risk of being shut down without warning. In these circumstances, it is not surprising that not long ago a Google search on Falun Gong or Dalai Lama used to produce no hits. A further consequence of this system is that of the nearly 70 million Chinese blogs, none of them are hosted abroad or are in English, since this would make them illegible for censors.
All this seems pretty much set in stone and no one would think that the government could be forced into relaxing its grip on the World Wide Web. But following the cyber attacks against its servers, Google had enough—and it seems to have found an unexpected way to bring down Goliath.
Enter the WTO
China’s accession to the World Trade Organization (WTO) in 2001 was the crest of the country’s transition to capitalism. Its objective was to use the accession to this multilateral organization as a means to enhancing its access to foreign markets and, by extension, fuelling its remarkable economic growth rates. This strategy, however, seems to have overlooked all the implications involved in the Chinese WTO accession. As it turned out, China (and many other countries with it) had unknowingly agreed to unrestricted market access for Internet services.
The fact that censorship restricts free speech is something the WTO cares very little about. What is more problematic for China, however, is that its current model of Internet censorship effectively discriminates against foreign firms in favor of domestic companies deemed reliable in the eyes of Beijing.
As Beijing has already found out, violating WTO rules can cost dearly. For instance, the WTO Dispute Settlement Body (the mediation court of the organization) has already struck down China’s overly complicated rules and state monopoly on imports of books and DVDs on similar grounds. The fact that the Chinese leadership justified its action by highlighting that Google violated Chinese law and several agreements with Chinese authorities will not add much to the legal battle that could follow. Even if Chinese authorities are in part right, China’s regulations are nonetheless subject to international standards set by trade agreements. As it turns out, these provisions significantly limit the Chinese authorities powers at home, which is clearly something that Chinese negotiators seem to have overlooked.
God and the Internet
China is far from being the only country enforcing censorship. Although countries like Iran, Iraq, Syria, Russia, North Korea and Turkmenistan are not yet members of the WTO (and therefore are exempt from its laws), there are plenty of WTO members that censor Web pages for moral, religious or political reasons. Many Muslim countries have blocked sites containing blasphemy and immoral content, for instance. This, however, is not unique to the Muslim world; even the US enforces a legal ban (albeit not full technical blocking) of online gambling. Attacks on political figureheads, or lése majesté, are also sensitive—YouTube was shut down in Turkey for defaming Kemal Atatürk, the country’s founding father.
In truth, the WTO is indifferent to censorship; it even goes as far as acknowledging the right of each member to set its own standards. Neither does it bother with excessive punishment—even when that means being sent to labor camps for checking your email as you could be in Cuba. It simply enforces its member’s commitments to open markets by ensuring that they employ the least trade restrictive options to attain a set objective. For example, do countries block individual blasphemous videos on YouTube or shut down the entire Web site? Do they blatantly discriminate against foreign companies? Even if there is no international law protecting free speech; but there are legally binding rules protecting the right to export.
Looking at the WTO commitments of some prominent Muslim countries reveals that many (e.g. Saudi Arabia, UAE, Oman, Jordan, Malaysia) have granted unrestricted access to their markets—much like China. Oman, Pakistan, Egypt, Jordan and Malaysia have also granted relatively unfettered access for telecom services, which includes broadband or mobile access and cheap IP telephony services like Skype. Furthermore, Oman and Jordan agreed to unrestricted access for audiovisual services. This means that YouTube may only be shut down on moral and religious grounds when and if these governments can prove that they have extinguished all alternative options to try to accommodate the interest of foreign companies. In the economic legal world, this is a mighty—if not improbable—task.
Could the Google incident happen elsewhere?
There is a difference between censorship rooted in religious rules and China’s case. First, China’s censorship is clearly motivated by economic protectionism. Second, China has developed an impressive technical and administrative apparatus to control the Internet that a smaller country in the GCC region is clearly unable to copy. Furthermore, the latest estimates put the Chinese Internet user (read consumer) market at around 300 million users. This is considerably higher than all GCC countries put together. By extension, GCC countries are of lesser economic interest than China to exporters in Silicon Valley, which reduces the likelihood of a costly legal battle involving a GCC member.
Nevertheless, search engines, Twitter, blogs or Facebook have serious security policy implications, as proven by last year’s uprising in Iran—revealingly labeled a “Twitter revolution” in the media. The strategic importance of the Internet seems to have been unforeseen by business and security communities—not least by China. We might see that many of the measures adopted against terrorism might interfere with international trade law if, for instance, foreign telecom companies are denied right of establishment on grounds of national security. This could clearly become a ground for legal battles in the future.
Google stopped censoring its services in China after the incidents in January. So far China’s political elite has chosen not to react. The unlikely mix of business, civil rights groups, security policy planners and computer nerds are now closely observing how China will respond. China’s next move will not only prove important in terms of signaling the resilience of the Chinese administrative apparatus to international pressures, but may also create crucial precedents in the international economic legal sphere.
Hosuk Lee-Makiyama - Co-director of the European Centre for International Political Economy, a Brussels-based think-tank.
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