Does the Ban on Chinese Applications fall under Article XXI of GATT?
The past few months have seen rising tensions between India and China regarding claims over the Galwan valley.[1] Since May 2020, China has been objecting to the infrastructure development conducted by India in the Galwan Valley. In what is deemed to be the worst conflict between India and China since 1967, 20 Indian soldiers were killed in a violent clash between the security forces of the two sides in the Galwan Valley on June 15, 2020.[2] Thereafter, a statement was issued by the People’s Liberation Army (PLA) of China claiming sovereignty over the entire Galwan Valley, which has been tenuously opposed by India.[3] Diplomatic dialogue is continuously taking place in order to achieve disengagement at various friction points. However, the process is convoluted. The Indian government has implemented a range of economic measures amid the border tensions with China, the foremost of which is the ban on 59 Chinese applications (apps) on June 29, 2020.[4] China immediately reacted to this move stating it was ‘selective and discriminatory’ and violates India’s obligations within the World Trade Organization (WTO) framework.[5]
While dealing with the WTO compliance of India’s measure to ban Chinese apps, the first issue which arises is regarding the classification of digital applications as goods or services – a longstanding debate in the WTO.[6] It is possible to argue that apps such as ‘Shein’ which deliver clothes (tangible products) should be governed by the General Agreement on Tariffs and Trade (GATT). Contrastingly, ‘UC Browser’ provides a service, thereby falling under the ambit of the General Agreement on Trade in Services (GATS).[7]
On the one hand, it can be argued that India’s action to ban Chinese apps violates Art.I (most favoured nation treatment) and Art.XI (quantitative restrictions) of the GATT, unless it is covered under the exceptions of either Art.XX or Art.XXI. On the other hand, a member state’s obligations under the GATS depend upon the sector-specific commitments that it has undertaken,[8] and any violation has to be justified under the exceptions within the GATS (security exceptions under Art.XIV bis of GATS[9]is similar to Art.XXI of GATT[10]). This article focuses on whether India’s action falls under Art.XXI of the GATT.
Art.XXI of the GATT
Art.XXI(b) of the GATT provides that a contracting party shall not be prevented from taking any measures ‘which it considers necessary for the protection of its essential security interests’ in any of the three circumstances mentioned which relate to: (i) fissionable materials, (ii) traffic in arms; or (iii) at time of war or emergency in international relations.[11] The Panel in Russia- Traffic in Transit for the first time interpreted the national security exception under Art.XXI of GATT.[12] Russia implemented transit bans for goods originating from Ukraine (by road or rail) through the territory of Russia, and invoked the national security exception to justify these measures. Russia contended that the Panel lacked the jurisdiction to analyze the measures regarding which Art.XXI of GATT had been invoked. While deciding upon the issue of jurisdiction, the Panel concluded that there must be an objective assessment of whether the measure qualifies under any of the circumstances mentioned under subparagraphs (i)-(iii) of Art.XXI(b) and any unilateral measures taken by member states subjectively would belie the predictability of the WTO multilateral trading system.
Art.XXI(b)(iii) mandates that any contracting party can take measures during ‘war or other emergency in international relations,’ and there ought to be a chronological determination of this fact.[13] Further, the usage of the conjunction ‘or’ in subparagraph (iii) suggests that ‘war’ is one subset of ‘emergency in international relations.’[14] The Panel stated that a situation would fall within the ambit of Art.XXI(b)(iii) when it relates to defense and military interests, and the existence of political or economic differences would not warrant the invocation of the provision.[15] Thus, Art.XXI(b)(iii) would include instances of armed conflict or rising tensions between states that could culminate in an armed conflict.[16]
Objective assessment under Art.XXI(b)
Under Art.XXI(b)(iii), the Panel must objectively determine, on the basis of the evidence before it, that there exists an ‘emergency in international relations,’ and the measure was taken at a time when such a situation persisted.
The PLA of China has been making attempts since early May 2020 to unilaterally alter the status quo along the LAC between India and China.[17] Further, there has been a continuous strengthening of Chinese troops along the entire LAC in Ladakh since April-May 2020,[18] and the violent clash on June 15, 2020 resulted in casualties for both sides.[19] Even after completion of the first phase of disengagement, there has only been a partial pullback in the Pangong Tso area where the Chinese troops have come in 8 kilometers from the LAC and there remains substantial presence of thousands of troops along various points along the LAC.[20] Thus, it is evident that the border tensions with China involve the defense and military interests of India. The Panel in Russia- Traffic in Transit considered concerns raised by the United Nations (UN) as evidence of the existence of a border dispute between Ukraine and Russia.[21] Similarly, statements by the UN Chief Antonio Guterres[22] with regard to the tension between India and China along the LAC also act as evidence of the existence of a conflict between the two sides. In light of the precarious situation at the border it can be classified as an ‘emergency in international relations’ under Art.XXI(b)(iii).
On June 29, 2020, the Ministry of Information Technology banned 59 Chinese apps for maintenance of the ‘security of the state and public order.’[23] Over the last few years, India has emerged as one of the largest digital markets in the world, but it has simultaneously given rise to concerns regarding data privacy and security of the polity. TikTok, ShareIt, WeChat, UC Browser, Helo and Clubfactory are amongst the apps that have been banned.[24] Out of the 450 million Indian users who possess smartphones, 300 million unique internet users (approximately 66.67%) use Chinese apps.[25] The decision to ban the apps was taken after receiving multiple complaints from numerous sources regarding the underhanded transfer of user information to servers located outside India.[26] The Indian Cyber Crime Coordination Centre and the Computer Emergency Response Team have also provided detailed recommendations to ban the Chinese apps in light of the security concerns of India and the privacy of its citizens.[27] The National Security Council Secretariat also seconded the banning of these apps since there were serious concerns regarding the apps being used as spyware or for malicious purposes.[28] The usage of these apps establishes a link to Chinese hardware and software, which might be used to hamper communication services in the event of a conflict.[29] Thus, considering the threat the use of these apps pose to the ‘sovereignty and integrity of India,’ the government decided to ban the usage of 59 Chinese apps. This action falls under Art.XXI(b)(iii), given the fact that it satisfies the requirement of being ‘taken at time of war or emergency in international relations.’ It has been established above that the border tensions between India and China qualify as an ‘emergency in international relations’ and the measure of the government was taken on June 29, 2020, which chronologically, is during the time when the border standoff persists between India and China, where total de-escalation has not been achieved. Therefore, the action to ban 59 Chinese apps can pass the muster of the objective consideration by the Panel under Art.XXI(b)(iii).
Chapeau of Art.XXI(b) of GATT
The chapeau of Art.XXI(b) provides that a member state can implement measures that are necessary for the protection of its essential security interests. The term ‘essential security interests’ refers to certain functions of the state, including protection of its territory from threats and maintenance of law and order.[30] The member state that invokes the security exception under Art.XXI(b)(iii) must establish that the measure is plausibly related to the protection of the essential security interest.[31] In the current scenario, India took the decision to ban Chinese apps in light of the threat of them being used for malicious intent and hampering communication services in light of the ongoing border conflict in the Ladakh area. The fact that there have been previous instances where poisoned apps were used for spying in an international conflict between two states[32] also provides credence to the possibility of Chinese apps being used for the same purpose amid the persisting border tensions. Therefore, India can dispel its burden to prove that the action of banning Chinese apps is related to the protection of its essential security interests and territorial integrity, thereby satisfying the chapeau requirements of Art.XXI(b).
Conclusion
The security exception under Art.XXI(b)(iii) of GATT gives a member state the freedom to implement measures which it considers necessary for the protection of its essential security interest, taken during war or other emergency in international relations. The border standoff between India and China is classified as an ‘emergency in international relations’ as it pertains to the defense and military interests of India. Further, protection of India’s territorial integrity falls under its ‘essential security interests,’ for which the Indian government banned the use of Chinese apps. There were complaints received of private user information being transferred outside India, and several intelligence agencies pointed towards the possibility of these apps being used as spyware. Further, communication facilities can be effectively hampered in the event of a conflict considering that more than 60% of India’s smartphone users download those banned Chinese apps, which exacerbates the security threat posed by them. The action was taken on June 29, 2020, which is during the period of the border conflict. Therefore, in the unlikely event that China pursues a case against India at the WTO Dispute Settlement Body,[33] India can successfully invoke the security exception under Art.XXI(b)(iii).
[1] Ananth Krishnan, ‘Who does the Galwan Valley belong to?’ The Hindu (June 21, 2020) <https://www.thehindu.com/news/national/the-hindu-explains-who-does-galwan-valley-belong-to/article31879418.ece> accessed 12 July 2020.
[2] Dinaker Peri, Suhasini Haider and Ananth Krishnan, ‘Indian Army says 20 soldiers killed in clash with Chinese troops in the Galwan area,’ The Hindu (16 June 2020) <https://www.thehindu.com/news/national/indian-army-says-20-soldiers-killed-in-clash-with-chinese-troops-in-the-galwan-area/article31845662.ece> accessed 12 July 2020.
[3] Ananth Krishnan, ‘China lays claim to entire Galwan Valley,’ The Hindu (Chennai, 19 June 2020) <https://www.thehindu.com/news/national/chinas-galwan-valley-claims-mark-shift-from-past/article31867941.ece > accessed 12 July 2020.
[4] Yuthika Bhargava, ‘Government bans 59 apps including China-based TikTok, WeChat,’ The Hindu (New Delhi, 29 June 2020) <https://www.thehindu.com/news/national/govt-bans-59-apps-including-tiktok-wechat/article31947445.ece> accessed 12 July 2020.
[5] Reuters, ‘China says India’s ban on Chinese apps may violate WTO rules,’ The Economic Times (30 June, 2020) <https://economictimes.indiatimes.com/tech/ites/china-says-indias-ban-on-chinese-apps-may-violate-wto-rules/articleshow/76713829.cms#:~:text=%22India%27s%20measure%20selectively%20and%20discriminatorily,New%20Delhi%2C%20said%20in%20a> accessed 12 July 2020.
[6] Stewart A. Baker and others, ‘E-products and the WTO,’ (2001) 35(1) The International Lawyer < https://www.jstor.org/stable/40707591> accessed 12 July 2020.
[7] Shubhangi Agarwalla and Siddharth Sonkar, ‘Where Does India’s Ban on Chinese Apps Fit Into the Global Trade Debate?’ The Wire (5 July 2020) <https://thewire.in/tech/india-china-apps-global-trade-debate> accessed 12 July 2020.
[8] R.V. Anuradha, ‘Technological Neutrality: Implications for Services Commitments and the Discussions on E-Commerce,’ (2018) Working Paper, CWS/WP/200/51, Centre for WTO Studies, Indian Institute of Foreign Trade <http://wtocentre.iift.ac.in/workingpaper/WorkingPaper51.pdf> accessed 12 July 2020.
[9] General Agreement on Trade in Services 1994, art XIV bis.
[10] Ji Yoo and Dukgeun Ahn, ‘Security Exceptions in the WTO System: Bridge or Bottle-Neck for Trade and Security?’ (June, 2016) 19(2) Journal of International Economic Law <https://doi.org/10.1093/jiel/jgw049> accessed 16 July 2020.
[11] General Agreement on Tariffs and Trade 1994, art XXI(b).
[12] WTO, Russia: Measures Concerning Traffic in Transit- Panel Report, (5 April 2019) WT/DS512/R [Russia- Traffic in Transit].
[13] ibid.
[14] ibid.
[15] Russia Traffic in Transit (n 12).
[16] ibid.
[17] PTI, ‘India-China border face-off part of Chinese Communist Party’s “aggressive” stance, says White House,’ The Hindu (Washington, 2 July 2020) < https://www.thehindu.com/news/international/india-china-border-face-off-part-of-chinese-communist-partys-aggressive-stance-says-white-house/article31968283.ece > accessed 11 July 2020.
[18] Vijaita Singh, ‘Ladakh face-off Tense standoff continues along LAC,’ The Hindu (New Delhi, 28 June 2020) <https://www.thehindu.com/news/national/indian-chinese-troops-still-in-eyeball-to-eyeball-standoff/article31939397.ece> accessed 12 July 2020.
[19] Peri, Haider and Kirishnan (n 2).
[20] Suhasini Haider and Ananth Krishnan, ‘India, China for timely troop pullback,’ The Hindu (New Delhi, 10 July 2020) <https://www.thehindu.com/news/national/india-china-call-for-timely-disengagement-set-for-more-talks/article32045538.ece> accessed 12 July 2020.
[21] Russia Traffic in Transit (n 12).
[22] PTI, ‘UN chief expresses concern about reports of violence, deaths at LAC between India, China,’ India Today (16 June 2020) <https://www.indiatoday.in/india/story/un-chief-concern-reports-violence-deaths-lac-india-china-1689746-2020-06-16> accessed 12 July 2020.
[23] Ministry of Electronics and Information Technology, ‘Government Bans 59 mobile apps which are prejudicial to sovereignty and integrity of India, defence of India, security of state and public order,’ Press Information Bureau (29 June 2020) <https://pib.gov.in/PressReleseDetailm.aspx?PRID=1635206> accessed 12 July, 2020.
[24] ibid.
[25] ET Bureau, ‘India bans 59 Chinese apps including TikTok, WeChat, Helo,’ The Economic Times (New Delhi, 10 July 2020) <https://economictimes.indiatimes.com/tech/software/india-bans-59-chinese-apps-including-tiktok-helowechat/articleshow/76694814.cms#:~:text=The%20government%20banned%2059%20Chinese,press%20release%20late%20on%20Monday > accessed 12 July 2020.
[26] Ministry of Electronics and Information Technology, ‘Government Bans 59 mobile apps which are prejudicial to sovereignty and integrity of India, defence of India, security of state and public order,’ Press Information Bureau (29 June 2020) <https://pib.gov.in/PressReleseDetailm.aspx?PRID=1635206> accessed 12 July 2020.
[27] Ibid.
[28] Shishir Gupta, ‘Intel agencies red-flag use of 53 mobile apps with links to China: Complete list,’ Hindustan Times (New Delhi, 19 June 2020) <https://www.hindustantimes.com/india-news/intel-agencies-red-flag-use-of-52-mobile-apps-with-links-to-china-complete-list/story-B50Slf39aSnVOrCcS92l1N.html> accessed 12 July 2020.
[29] ibid.
[30] Russia- Traffic in Transit (n 12).
[31] ibid.
[32] Crowdstrike Global Intelligence Team, ‘Use of Fancy Bear Android Malware in Tracking of Ukrainian Field Artillery Units,’ (22 December, 2016) <https://www.crowdstrike.com/wp-content/brochures/FancyBearTracksUkrainianArtillery.pdf> accessed 12 July 2020.
[33] Prabash Datta, ‘Ban on Chinese apps: Why China can’t expect relief at WTO,’ India Today (New Delhi, 3 July 2020) <https://www.indiatoday.in/news-analysis/story/chinese-apps-wto-china-india-1696594-2020-07-03> accessed 12 July 2020.