Analysis On GATS Compliance Of China’s Restrictive Measures On Data Flow In The Perspective Of Digital Service Trade

Digital service trade,a new form of trade,is gradually becoming an important part of global trade.Data flow is a key medium and important driving factor of digital service trade.Since cross-border data flow may harm legitimate policy objectives such as personal privacy,public interest and even national security while promoting the development of digital service trade,many countries have enacted domestic laws to restrict the data flow.China has also adopted restrictive measures on the cross-border data flow.These restrictive measures have a negative impact on the digital service trade.In 2017 Report to Congress on China’s WTO Compliance,the United States suggested that China’s restrictive measures constitute non-compliance with respect to service trade and constitute a restriction on market access.The US further informed the WTO that China’s restrictive measures would impose significant restrictions on market access opportunities for cross-border service providers and constitute a potential breach of China’s commitments under GATS.The US may challenge China’s restrictive measures in the dispute settlement mechanism as a means of competition in the area of digital trade.Therefore,it is necessary to analyze the GATS compliance of China’s restrictive measures on cross-border data flow.On the analysis on GATS compliance,firstly,this paper studies the framework of GATS rules,analyzes whether GATS rules are applicable to restrictive measures on data flow and analyzes the steps and legal basis to determine the GATS-consistency of a measure.Secondly,on the basis of a study on China’s GATS commitments,this paper analyzes whether restrictive measures on data flow violate GATS rules.Ultimately this paper finds that China’s restrictive measures on data flow may violate market access commitment and national treatment commitment.But the measures do not violate the most-favored-nation obligation under GATS.Finally,this paper analyzes whether the GATS exception clauses can be invoked to justify these measures,specifically the public morality or public order exception,personal privacy exception,and security exception.For the public morality or public order exception and the individual privacy exception,the analysis is as follows:whether the measure is intended to protect public morality or public order and individual privacy,whether the measure meets the necessity test,and whether the measure meets the nondiscrimination requirement in the chapeau.For the security exception,the analysis is as follows:the analysis of WTO Members self-judging right,the connotation of essential security interest,and whether the measure meets the necessity test.After identifying the risk that China’s restrictive measures on data flow are inconsistent with the GATS rules,this paper puts forward proposals to improve the data flow rules.Firstly,the domestic rules should be improved,including adopting different data flow rules for different data,improving the security assessment mechanism for cross-border transfer of data,establishing a standard contract management mechanism and a data security protection certification mechanism.Secondly,as Article 5 of GATS allows WTO members to join other agreements that liberalize trade in services,this paper studies the RCEP and CPTPP rules,and examines the feasibility and plans for improving the data flow rules in the regional negotiations of RCEP and CPTPP.