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home > trade topics > services > gats: fact and fiction > the wto and internet privacy

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Misunderstandings and scare stories:
The WTO and Internet privacy

Following a speech on the need for protection of on-line consumers, made in Washington on 9 January 2001, Mr. Ralph Nader was quoted as saying that "particularly in the area of internet privacy protections, the WTO is forcing governments to forego sovereign privacy protections deemed to be overly restrictive to international trade". This is difficult to understand. No decision or action on the protection of Internet privacy has ever been taken in the WTO. Far from "forcing governments to forego sovereign privacy protections" (which it would have no power to do in any case), the WTO has had nothing whatever to do with Internet privacy. Moreover, a safeguard for individual privacy is built into the framework of the GATS itself. One of the General Exceptions in Article XIV of the GATS, overriding all other provisions, covers measures Governments might find it necessary to take for "the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts".


Once made, GATS commitments are irreversible

Governments are always free to liberalize unilaterally without making commitments in the GATS. However, GATS commitments have real value in providing secure and predictable conditions of access to markets, which benefits traders, investors, and, ultimately, all of us as consumers. This is why so many Governments have chosen to make binding commitments in the GATS framework, where they are intended to be legally secure.

Nevertheless, GATS commitments, like tariff bindings, are not irreversible. There are four ways in which a country can modify, suspend or even withdraw a commitment if it finds that to be necessary.

Any commitment may be withdrawn or modified after it has been in force for three years. On request, "compensation" may need to be negotiated with Members whose trade is affected. This does not mean monetary compensation, as some have alleged, but merely the replacement of the commitment withdrawn by another of equivalent value. This process is similar to the renegotiation of tariff bindings under the GATT, which has been in use for 50 years.
  • Secondly, in case of need the General Exceptions in Article XIV of the GATS can be invoked, where it is necessary to act to protect major public interests, including safety, human, plant or animal life or health, national security or public morals. These exceptions override all other provisions in the Agreement, entitling a Government to violate or withdraw its own commitments if necessary.
  • Thirdly, under the WTO Agreement Governments may seek a temporary waiver from any obligation.
  • It is also possible for a Government to suspend commitments in the event of serious balance-of-payments difficulties.

In addition, negotiations are now in progress under the GATS on the question of developing an Emergency Safeguard Measure, whose purpose would be to permit the suspension of a commitment in case of damage or the threat of damage to a domestic industry.

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