Central Product Classification

Central Product Classification (CPC) The Central Product Classification (CPC) comprises a comprehensive product classification covering goods and services. Therefore, one of the main characteristics of CPC as a general-purpose classification is that it provides less detail than the other specific categorization systems in areas or for applications for which such systems are obtainable. CPC is a classification that is proposed to play a fundamental role in relating different types of international economic classifications and to serve a variety of purposes. The name “Central Product Classification” is intended to indicate that the purpose of CPC is to provide a framework for international comparison of various kinds of statistics dealing with goods, services and assets.

Principally, CPC is intended to be used for different types of statistics, for instance, industrial statistics and national accounts, price statistics, foreign trade statistics (including trade in services) and balance-of-payments statistics. Another key characteristic of CPC is that it contains a description of services. No international classification of services covering the whole spectrum of outputs of heterogeneous service industries and serving the different analytical needs of the various types of statistics has been presented until now. Online Services Although many entrepreneurs would dispute that online services are of a new sui generis category, the least far-fetched assessment of many services should be that they are simply online processing services. Semantically, definition entails an online service which processes data or information with no output, type of content prejudged. WTO members themselves would barely reach a consensus over the question of where within the CPC system these new online services belong, although fourteen member states of WTO (including Hong Kong China (but not China itself), the EU, Japan, Korea and the US) have approved that all computer-related services ought to be defined somewhere within the chapter for telecom services. This proclamation is far from being universally acknowledged and the chapter still contains several of the above-mentioned categories under which many countries like China remain unbound.

[1] However, other circumstances points most online services, and in particular search engines, to “online processing services” (CPC843) under which China et al, would be bound. The CPC classification system existed only in a draft, provisional version at the time of drafting of GATS or of the first accessions to the WTO, and members are only encouraged to align their national classifications with the international reference ones – there are no obligations or legal agreements forcing members of the UN or even the WTO as an organisation to do so, in the way it is mandatory to define commitments in trade in goods under the Harmonized System (HS). The speedy growth of the Internet and information technology (IT) has led to the growing electronic cross-border delivery of services.

[2] Today, merchants of market research, advertising intermediaries, creative and advisory services toil with the Internet as with any other media.

Advertising is vital for these companies to make earnings. Most countries, however, remain unbound with respect to advertising; and hence would not breach their WTO commitments if they implemented restrictions on advertising that discriminated against foreign suppliers. As per this, countries would not limit market access for websites, but would effectively strangle their revenue stream.

They would therefore significantly reduce their country’s attractiveness as a target market for online media, leaving their national online market entirely to domestic actors or others who comply fully with the censorship. Internet Censorship By requiring foreign Internet service providers and search engines to censor and filter political contents, governments simultaneously prevent users from participating in the international trading system as consumer-participants and inhibit users from exercising their freedom of expression.

[3] The double-edge nature of censorship pressed Google and other commentators to argue that Internet censorship by governments—in both political and cultural forms—constitutes an “unfair trade barrier,” leading them to appeal for actions through the international trading system.

[4] Internet censoring or related requirements constitute trade barriers in breach of the most favored nation and national treatment obligations of the WTO General Agreement on Trade-in Services (GATS). The main concern posed by this proposition is that authoritarian governments can validate internet censorship measures under the “public morals” exception of GATS Article XIV to protect legitimate domestic values.

[5] Past Power Abuse User-generated activities include discussing and disseminating information, forming alliances and networks, waging protests and mobilizing for change, thus transforming political activism into economic activities. Any intervention in these political activities would not only disrupt and prevent social relationships and human interactions, but it would also interfere with international trade.

[6] Such censorship of the Internet heavily influences the international trade system, because internet essentially functions as a trade platform.

[7] Traditionally, developed countries often use human rights arguments as an excuse for protectionism

[8] or for asserting political powers to escape obligations under the WTO.

[9] Under the garb of “stability maintenance,” China created the Golden Shield, also called the Great Firewall, a large multi-agency Internet censorship regime.[10] The Golden Shield filtered and censored “sensitive” keywords including “Tiananmen Square,” “Dalai Lama,” “democracy,” “human rights,” “Jasmine,” and the likes. In April 2010, China adopted an amendment to the State Secrets Law requiring Internet and telecom companies to cooperate with the government on matters relating to national security by blocking transmission of defined state secrets, by alerting the government of possible breaches, and by suppressing content.[11] The Chinese government continued to hold a firm position in response to international pressure against such degree of censorship.[12] The Chinese Council of State’s Information Bureau released the official White Paper on the Internet, justifying its repressive measures as essential to ensuring respect for local laws and maintaining stability. “Public Morals” in Trade and Human Rights: Moral Here but Not There? The augment of Internet censorship, against the merging of political activism and consumer-participant trade activities, must at least imply re-examining the linkage of trade and human rights values. Formulation of “Public Morals” The WTO’s “public morals” exception is embodied in several key regulations,[13] while the concept is interpreted and given meaning by the WTO’s Understanding on Rules and Procedures Governing the Settlement of Disputes (Dispute Settlement Understanding or DSU).[14] In order to determine the possibility of linkage, it is necessary to examine the authority and equivalent capacity of the DSU adjudicating bodies to interpret the GATS Article XIV(a). This method allows the WTO to address an elementary flaw in the public international law system and particularly in human rights law—the lack of an effective enforcement mechanism. However, in doing so, the adjudicating bodies must assure that “recommendations and rulings of the Dispute Settlement Body (DSB) cannot add to or diminish the rights and obligations provided in the covered agreements.” There is no mechanism for integrating diverse legal rules, e.g., in situations of conflicting interpretations or conflict of law.[15] The limited body of law applicable to the WTO dispute resolution[16] and the lack of linkage mechanisms led to substantive problems.

For example, questions often arose when particular conduct was restricted by WTO regulations but, at the same time, required under non-WTO law; or alternatively, WTO law permitted conduct that would otherwise be forbidden under domestic or other international law. The question that has emerged from Internet censorship belongs to the latter: Does the WTO permit conduct that seeks to violate international human rights law as justified by the “public moral” exception? To answer such a question, the values that constitute “public morals” must first be determined, as set forth in the General Agreement on Tariffs and Trade (GATT) Article XX and GATS Article XIV.[17] The WTO regulations prohibit members from raising trade barriers as protectionist measures.[18] However, China and other regimes that engage in Internet censorship, restrictions, and private information demands could justify their measures under the general exception clause for social concerns recognized by GATS.[19] GATS Art. XIV(a) permits otherwise illegal measures when they are “necessary to protect public morals or to maintain public order.”[20] Conclusion The Internet creates an open forum that assists human interaction in a pragmatic and comprehensive manner, economically, politically, and socially. As of 2011, the number of people who use the internet are approximately 2,267,233,742 out of approximately seven billion people worldwide.[21] Any meddling affecting such magnitude requires a serious reconsideration of all available international legal institutions and instruments to determine ways in which these already existing institutions might build capacity. Although censorship is a trade barrier and a contravention of human rights, it can be warranted under both the WTO general exceptions clause.[22] Due to the similarity between and relatedness of these “public morals” exceptions, a narrow and mutually beneficial linkage can be formed.

[1] World Trade Organization, TN/S/W/38

[2] Organisation for Economic Cooperation and Development (OECD).

[3] See International Covenant on Civil and Political Rights arts. 18, 22, Dec. 16, 1966, 999 U.N.T.S. 171 [hereinafter ICCPR]. The violation of the freedom of expression on the Internet also violates other rights protected by the ICCPR, including those addressed in Article 18, the right to freedom of thought, conscience and religion, and Article 22, freedom of association with others. . arts. 18, 22.

[4] See Bob Boorstin, Promoting Free Trade for the Internet Economy, GOOGLE PUBLIC POLICY BLOG (Nov. 15, 2010, 10:07 A.M.), https://googlepublicpolicy.blogspot.com/2010/11/promoting-free-trade-for-internet.html; see also Google, the Internet and China: A Nexus Between Human Rights and Trade: Hearing Before the Congressional Executive Comm. on China, 111th Cong. 6-8 (2010) (testimony of Ed Black); Tim Wu, The World Trade Law of Internet Filtering, 7 CHI. J. INT’L L. 263, 270-87 (2006) [hereinafter Wu, Internet Filtering] (discussing censorship as a trade barrier); Brian Hindley & Hosuk Lee-Makiyama, Protectionism Online: Internet Censorship and International Trade Law 2, 19 (ECIPE, Working Paper No. 12/2009, 2009); EUR. PARL. DOC. (INI 2185) (2007) (taking a similar stance, the European Parliament passed a resolution treating Internet censorship as a trade barrier: European Parliament resolution of 19 February 2008 on the EU’s Strategy to deliver market access for European companies).

[5] See Wu, Internet Filtering; see Hindley & Lee-Makiyama,

[6] See Khaled Y. Oweis, Syria Blocks Facebook in Internet Crackdown, THOMSON REUTERS (Nov. 23, 2007), https://www.reuters.com/article/2007/11/23/us-syria-facebook-idUSOWE37285020071123 (discussing the Syrians’ use of Facebook to communicate with relatives and friends abroad; Facebook also assisted civil society in Syria to form civic groups outside governments).

[7] See Opening Welcome: The State of the Internet Industry, IT CONVERSATIONS (Oct. 5, 2004), https://itc.conversationsnetwork.org/shows/detail270.html [hereinafter Opening Welcome].

[8] See ERNST-ULRICH PETERSMANN, CONSTITUTIONAL FUNCTIONS AND CONSTITUTIONAL PROBLEM OF INTERNATIONAL ECONOMIC LAW: INTERNATIONAL AND DOMESTIC FOREIGN TRADE LAW AND FOREIGN TRADE AND FOREIGN TRADE POLICY IN THE UNITED STATES, THE EUROPEAN COMMUNITY AND SWITZERLAND 100-12 (1991) (offering characteristics of the new protectionism).

[9] See Christine Breining-Kaufmann, The Legal Matrix of Human Rights and Trade Law: State Obligations Versus Private Rights and Obligations, in HUMAN RIGHTS AND INTERNATIONAL TRADE, 234-35 (Cottier et. al. eds., 2005) (offering a brief introduction about proliferation and core issues of trade verses human rights debate and noting that WTO members are reluctant to approach trade while accounting for human rights). [10] See OPENNET INITIATIVE, INTERNET FILTERING IN CHINA 10 (2009), avaliable at https://opennet.net/sites/opennet.net/files/ONI_China_2009.pdf; see also Internet Enemies, [11] See STRATFOR GLOBAL INTELLIGENCE, CHINA SECURITY MEMO (Apr. 29, 2010); Huazhong Wang & Xing Wang, Police to Work with Phone, Internet Providers, CHINA DAILY, Apr. 27, 2010 [12] See INFO. OFFICE OF THE STATE COUNCIL OF THE PEOPLE’S REPUBLIC OF CHINA, THE INTERNET IN CHINA IV (Jun. 8, 2005), https://www.china.org.ch/government/whitepaper/node_7093508.htm [hereinafter WHITE PAPER]. [13] See General Agreement on Trade in Services art. XIV(a), Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1B, 1869 U.N.T.S. 183 [hereinafter GATS]; see also GATT, , art. XX(a); Agreement on Government Procurement art. XXIII(2), Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 4B, 1915 U.N.T.S. 103; Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) art. 27(2), Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, 1869 U.N.T.S. 299. [14] See Understanding on Rules and Procedures Governing the Settlement of Disputes, art. 3.2, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 2, 33 I.L.M 1125 [hereinafter DSU]. [15] See Joel P. Trachtman, The Domain of WTO Dispute Resolution, 40 HARV. INT’L L.J. 333, 338 (1999). [16] See David Palmeter & Petros C. Mavroidis, The WTO Legal System: Sources of Law, 92 AM. J. INT’L L. 398, 399 (1998) (arguing that the texts of the WTO agreements “do not exhaust the sources of potentially relevant law”). Palmeter and Mavroidis refer to articles 3(2) and 7 of the DSU as the ostensible basis for incorporation of non-WTO international law. However, these provisions refer only to interpretation of relevant provisions of WTO agreements “in accordance with customary rules of interpretation of public international law.” see also Thomas J. Schoenbaum, WTO Dispute Settlement: Praise and Suggestions for Reform, 47 INT’L & COMP. L.Q. 647, 653 (1998); Appellate Body Report and Panel Report, United States–Standards for Reformulated and Conventional Gasoline, 17, WT/DS2/9 (May 20, 1996) [hereinafter U.S.–Gasoline] (“[T]he General Agreement is not to be read in clinical isolation from public international law.”). [17] GATS Article XIV and GATT Article XX will be used interchangeably in this discussion for the simplification of case law analysis that derives from disputes under the GATT. [18] See Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994, 1867 U.N.T.S. 154 [hereinafter Marrakesh Agreement]. [19] For a discussion of whether GATS applies to online services, such as search engines like Google, and to other networking and news media sites, see Wu, Internet Filterin,; Hindley & Lee-Makiyama, supra note 10, at 5-13. [20] GATS, Art. XVII [21] Usage and Population Statistics, INTERNET WORLD STATS (Dec. 31, 2011), https://www.internetworldstats.com/stats.htm (last visited Oct. 15, 2012). [22] See generally Office of the United Nations High Commissioner for Human Rights, Human Rights and World Trade Agreements: Using General Exception Clauses to Protect Human Rights, U.N. Doc. HR/PUB/05/5 (Nov. 2005), available at https://www.ohchr.org/Documents/Publications/WTOen.pdf (discussing the use of general exception clauses in WTO agreements).

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