Last week, Google posted a paper entitled "Enabling Trade in the Era of Information Technologies: Breaking Down Barriers to the Free Flow of Information." There's a Technical Appendix (p. 17 of the document) called "Applicability of the WTO rules to restrictions on free flow of information." It seemed interesting enough, but I couldn't think of anything to say about it, so I didn't mention it on the blog. But now Yohai Baisburd (of the new International Trade and Customs blog) points out another part of the paper, which I had not noticed initially because I skipped directly to the WTO legal analysis part:
[governments should] ensure that rules in the next generation of trade agreements reflect new challenges of Internet trade. In this new era, addressing the trade-related problems posed by government censorship and disruption of the Internet will be critical. Fresh, creative thinking will be required in order to properly address the unprecedented problems and opportunities that arise every day.
In particular, Google says that governments should do two things:
First, governments must close gaps in the existing WTO framework in order to ensure that all GATS disciplines apply to all Internet trade. Second, governments must negotiate new rules that reflect today’s information economy and include them in bilateral and multilateral trade agreements.
I'm going to focus on the latter part, i.e., the new rules. Google elaborates on this a bit by arguing for three "priorities for promoting internet trade" in the negotiation of new trade agreements: "advancing the unrestricted flow of information; promoting new, stronger transparency rules; and ensuring that Internet services can be provided without a local investment." My sense is that transparency is not all that controversial. As for the "local investment" part, this seems to be a simple case for anti-protectionism. This is controversial in a sense, but in predictable ways. All governments want to give advantages to domestic companies. Trade agreements simply set the rules on the extent to which they can do so.
The most interesting part is the call for the "unrestricted flow of information":
Advancing the unrestricted flow of information
Information is the currency of the Internet and the innovation economy. The Internet’s power and ability to deliver benefits, including to the international trading system, depends on the free flow of information across the entire global network. When data is blocked or disrupted, a wide range of businesses and consumers who depend on the Internet as a tool of trade are potentially affected.
Governments should therefore insist on trade agreements that explicitly recognize this and establish a presumption in favor of the free flow of electronic information. In some sense, this is simply applying the same concepts that have long been accepted in the realm of goods
trade, and updating them to adapt to the 21st century economy.
Governments have long agreed that any restriction on the importation of goods should be
prohibited. In addition there is consensus that, to the extent that any technical regulations
are imposed that restrict trade, they should be limited to pursuit of legitimate governmental objectives and tailored to be no more trade restrictive than necessary to achieve that objective. Other than tariffs, which have to be negotiated on a reciprocal basis, the default
position under the WTO is that governments may not restrict imports of goods, and any deviations from that must be justified.
Trade officials should work to ensure that all governments accept the same presumption for the Internet – a presumption that governments may not restrict online information flows.
While this concept can be translated into binding trade agreement language in different ways, the end result must put the burden on governments to justify with particularity any
censorship or other disruption of the Internet. And in such scenarios, governments must tailor restrictions narrowly, spell out legitimate government objectives that are being advanced, and provide basic legal process to affected service providers.
The United States and Korea took an initial, positive step in this direction in 2007 by agreeing to the following provision in the Korea-U.S. Free Trade Agreement (KORUS): “Recognizing the importance of the free flow of information in facilitating trade, and acknowledging the importance of protecting personal information, the Parties shall endeavor to refrain from imposing or maintaining unnecessary barriers to electronic information flows across borders.” This provision applies to any measure that disrupts information flows and applies to all digital content, whether goods or services.
The U.S. and other governments should improve the KORUS language and incorporate it into other trade agreements. Among other things, the provision should be revised to be binding – in KORUS it is an agreement to “endeavor to refrain from” certain restrictions – and it should apply to all electronic information flows, not just those “across borders”.
In essence, Google is asking for trade agreements to include a necessity requirement for information flows. In this regard, they mention this preambular provision from the KORUS FTA (Article 15.8): “Recognizing the importance of the free flow of information in facilitating trade, and acknowledging the importance of protecting personal information, the Parties shall endeavor to refrain from imposing or maintaining unnecessary barriers to electronic information flows across borders.” They say they want to put this provision in other trade agreements and make it binding. This would constitute a general necessity requirement applying to all measures affecting "information flows," similar to what already exists in TBT Agreement Article 2.2 for measures that are "technical regulations" (which they also refer to).
The underlying issue here is establishing the proper balance between the free flow of information and other policy goals. The key other goals are likely to be national security, public order and public morals. Google wants to put constraints on governments' ability to pursue these goals (or rather, it wants governments to constrain themselves, through trade agreements). By contrast, some governments are likely to want to maintain a good deal of flexibility in these matters.
So what are the chances of success for Google in achieving this? My guess is that in the context of the WTO, they may have some trouble. What they are suggesting would lead to a shift in the current balance between international oversight and flexibility in domestic regulatory autonomy. It would certainly be an interesting debate if WTO Members were to look closely at these issues, but I'm not at all sure what the ultimate result would be.
On the other hand, it may be possible to find a few countries who would agree that a tightening of international rules is desirable, and thus they may find takers for their proposed changes in particular bilateral or regional FTAs.