Friday, 26 June 2009

Green Dam discussion at IELP blog

The PC Filtering Software Issue

From USTR:

Today U.S. Secretary of Commerce Gary Locke and U.S. Trade Representative Ron Kirk sent a joint letter to their counterparts in China's Ministry of Industry and Information Technology (MIIT) and Ministry of Commerce (MOFCOM) urging China to revoke a proposed rule (Circular 226) that would mandate that all computers produced and sold in China pre-install a widely-criticized Chinese Internet filtering program called Green Dam. This proposed measure is scheduled to take effect on July 1, 2009.

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

"China is putting companies in an untenable position by requiring them, with virtually no public notice, to pre-install software that appears to have broad-based censorship implications and network security issues," Locke said.

"Protecting children from inappropriate content is a legitimate objective, but this is an inappropriate means and is likely to have a broader scope. Mandating technically flawed Green Dam software and denying manufacturers and consumers freedom to select filtering software is an unnecessary and unjustified means to achieve that objective, and poses a serious barrier to trade," Kirk said.

Both U.S. government officials offered China an opportunity to exchange views with U.S. and Chinese government and industry officials on ways in which parental control software can be promoted in the market consistent with the goals of user choice, system reliability, freedom of expression, and the free flow of information.

The USTR press release doesn't say much about the legal theory, and the letter that is mentioned has not, as far as I know, been made public.  So what is the legal claim?  The WSJ explains it as follows:

U.S. officials argue the tight deadline for implementing the software requirement constitutes an unfair trade barrier. PC makers have expressed concerns about being able to meet the July 1 start date.

Foreign and domestic PC makers in China are required to begin shipping computers with the software on July 1, so the U.S. would have to show Chinese manufacturers had more notice or information to meet that deadline for a WTO complaint to succeed.

More from Bloomberg here


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Joe said...

So, how many computers sold in the US are produced in China? Would computers sold here to US consumers come pre-installed with Chinese software?

Julia Qin said...

There is a WTO-plus obligation of China in the Accession Protocol that may serve as a legal basis for the US complaint: China is required to "provide a reasonable period for comment to the appropriate authorities before [new] measures are implemented". The Green Dam rule was made public in early June, and the implementation date is July 1. The less-than-a-month period is probably not reasonable.

Henry Gao said...

I think there are at least two possible legal claims:
1. MFN. The software only has Windows version and doesn't have a Mac version. This means either Apple computers can be sold in China without pre-installing the software, or that Apple computers cannot be sold in China at all. Either way it's a violation of MFN;
2. Domestic content requirement: As the software is a domestically produced in China, requiring it in imported products would amount to a domestic content requirement in violation of TRIMS.

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