For the first twenty-plus years of the WTO, the vast majority of cases brought before the Appellate Body have been grounded on General Agreement on Tariffs and Trade (“GATT”) claims. Over the twenty years of the WTO’s life, however, digital trade and cross-border data flows have grown from nearly non-existent to larger in volume and gross product value than trade in goods. As digital trade has accelerated to more than $400 billion each year, many countries have attempted to erect barriers that protect domestic industry while attempting to claim exceptions to the General Agreement on Trade in Services (“GATS”). These justifications range from protections for citizens’ privacy, ensuring cyber-security, and strengthening national security. As a major exporter of digital services trade, the United States would greatly benefit from bringing a case against at least one of these countries to remove or revise the restrictive laws and regulations. Three WTO members, namely the European Union, China, and Russia, not only have such laws and regulations, they have also created those laws based on questionable logic and assumptions. This Note will start by analyzing the individual WTO and GATS commitments made by Russia, China, and the EU. It will then scrutinize applicable WTO case law under the GATS, as well as the Russian localization, EU privacy, and Chinese cybersecurity laws. These laws are then compared with the language of the WTO and GATS, as well as other trade agreements to which the countries are party. Finally, the Note will conclude by summarizing the likelihood of success the United States would have in complaints against each of the three WTO members.

Continue reading Reading the Trade Tea Leaves: A Comparative Analysis of Potential United States WTO-GATS Claims Against Privacy, Localization, and Cybersecurity Laws