Lawyers said that Google and the US might have a legal basis for suing China at the World Trade Organisation, a move that would further complicate relations between Washington and Beijing.
US-China relations have recently been strained by Washington’s moves to complete long-planned arms sales to Taiwan and ahead of an expected meeting between President Barack Obama and the Dalai Lama.
But over the past year each government has also brought a string of emergency trade restrictions and legal cases against the other. Last month the WTO appeals body handed the US a victory, upholding an earlier ruling that China had broken WTO rules by requiring foreign companies to use Chinese distributors for music, books and films, including products delivered online.
Earlier this week China requested a WTO hearing on the US’s recent decision to impose emergency tariffs on Chinese tyres.
US officials on Wednesday made their concerns clear. ”The recent cyber intrusion that Google attributes to China is troubling to the US government,” the US commerce department said.
Deborah Mesloh, a spokeswoman for the trade representative, said: “Google has not requested assistance from USTR in this particular matter, but we would work closely with any company that saw its trade rights being damaged.”
According to lawyers, the US could argue that Beijing’s censorship in effect discriminated against foreign services such as Google, contrary to its commitments under the General Agreement on Trade in Services (Gats).
“If China imposes harsher web filtering restrictions on Google than on local search engines, such as Baidu, Google may have a WTO discrimination claim,” said David Spooner, a former assistant secretary of commerce, now at the law firm Squire Sanders & Dempsey.
The outcome of a case would depend on how a WTO dispute resolution panel classified search engines. Much of the WTO law addressing internet services and online products is unclear. The last global trade agreement was negotiated in the early 1990s when the technology was in its infancy. But trade experts said a succession of rulings had narrowed governments’ room for manoeuvre, and particularly their ability to use national security or the protection of public morals as defence for censoring words and images on the web.
Gary Horlick, a leading international trade lawyer, said: “We will have to know a lot more about the facts, especially what the [Chinese] government is doing, but the Gats has a lot of unexplored obligations which might protect Google.”
Additional reporting by Daniel Dombey in Washington
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