Would there be Blanket ban on Chinese Apps & Smart phone too – WTO Norms - Revisiting Security exceptions of GATT.

On 27th July 2020, India banned yet another 47 Chinese apps including PUBG, Alibaba stating engaged in “activities which are prejudicial to sovereignty and integrity of India, defence of India, security of state, and public order.”

Ban on Chinese app also paves the wave to ban on Chinese smart phone. Since Chinese smart phone due to their smart features in low cost attracted major share of Indian Smart phone market.

However, after suspicion on Chinese apps & subsequently ban, it has been since long the Chinese smart phones are under suspicion that these smart phones are secretly stealing individual data. Therefore, Nevertheless, many Chinese smartphone users are wondering, "will Chinese phones be banned in India?" "When will Chinese phones be banned in India?" and more.

As the tensions between the two countries continue to escalate Chinese mobiles are likely to be next on the line to be banned in India. Brands like Oppo, Vivo, One Plus, Realme, Xiaomi etc. that are ruling the Indian mobile market could be among the most affected if the decision in that direction is taken.

Ban & Measures –

Any country has two several motives to ban a company or business entity from doing business in its country, amongst relevant to the current situation, India can ban under these two circumstances 1) To protect Sovereignty, 2) Art XXI of GATT (Security Exceptions) 

Since we are into a global market policy, any nation simply cannot ban any MNC company or institution. To ban on particular company there should be prima facie evidence against the company as it violating internal security, trade norm, which may result in threat to Sovereignty, Security of a country.

However, in case of Chinese mobiles as of now, there is no as such step taken by Indian government or any Smart phone maker is under suspicion as such. However, there were allegation on Xiomi , Huwai of stealing private data & sending it to china.

A report says, Xiaomi has been accused of collecting browsing data from its users, according to a new sensational report by Forbes. When cybersecurity researcher Gabi Cirlig examined the Mi Browser on the Redmi Note 8, he found that the phone was collecting a users’ behaviour including websites visited, search queries in Google.

Things get a little tricky, when Cirlig found that the tracking continued even when the phone’s browser was set to private or “incognito” mode. Researchers also found that even searches on the so-called privacy-centric DuckDuckGo web browser were being sent to China. Forbes cited multiple security researchers who said that the company was collecting information on unique numbers identifying a device as well as the version of Android it’s running.

Looking at the number of circumstances, Huwai must be only tele company which was banned more than 5 countries. Countries like America, Britain, Australia European Union has been accused of stealing private data of users, in such a consequences Indian government can ban on few of these alleged Chinese Smart phone makers.  Hence in this background whether India’s next move will be ban on Chinese smart phone

Art XXI of GATT states that,

Nothing in this Agreement shall be construed so as to:

(b) to prevent any (member country) from taking any action which it considers necessary for the protection of its essential security interests

(i) relating to fissionable materials or the materials from which they are derived;

(ii) relating to the traffic in arms, ammunition, and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment;

(iii) taken in time of war or other emergency in international relations.

Interestingly, it is crucial to note that Ji Rong, the spokesperson of the Chinese embassy in India, has already called this move “discriminatory” and says that it “abuses national security exceptions” of the WTO rules.

In the given scenario, a blanket ban on these goods & services might be inconsistent with WTO norms, but still it can be justified under Article XX (General Exceptions) and Article XXI (Security Exception) of the General Agreement on Tariffs and Trade, 1994 [“GATT”]. Measures under Article XX of GATT are subjected to Panel’s review, but since there is a deviation of opinion on Article XXI of GATT as to whether the same is self-judging or not, many times Super power have often try to invoke security exception.

As a consequence, Security Exceptions under Article XXI of the GATT and Article XIV bis of General Agreement on Trade in Services [“GATS”] provides members of WTO, a right to derogate from the existing WTO framework in case of any security exigency. That being so, certain powerful nations such as the U.S. and Russia often try to justify their WTO inconsistent measures under the garb of security exception. As is evident, the reasoning applied by these countries lies on the ground that security exception is self-judging in nature. 

GATS or GATT?

However, it is disputed whether Apps fall under the definition of Service or Product, admittedly, ban on app & ban on smart phone would differ in nature, accordingly provision for taking any measures also differs. Nevertheless, India can take recourse of” Self-Judging “on account of recent Chinese war like activities at border line, however, how feasible it would to take recourse under Art. XXI of the GAAT is subject of reconsideration.