5 WTO Rules on Data Protection
International Law imposes limits to state activities. The WTO system, as an international law institution, also imposes some legal limits to domestic policies. As far
as these policies do not affect the trade among its Members, States are free to do
whatever they want. It is generally expected that sovereign governments do respect
the rules and principles they agreed upon and, though the international dispute
resolution and sanctions systems are relatively weak, these expectations are normally
respected.
Data protection was no trendy topic when the WTO agreement was signed in
1994. Nevertheless, an important rule in this respect was included in the GATS
agreement, namely:
Art. XIV (c) (ii)
(. . .) nothing in this Agreement shall be construed to prevent the adoption or enforcement by
any Member of measures:
(c) necessary to secure compliance with laws or regulations which are not inconsistent with
the provisions of this Agreement including those relating to:
(ii) 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.
The purpose of this rule is to explicitly except state policies regarding the
protection of personal data from the coverage of liberalization rules, including the
most favoured nation clause, when applicable, and the national treatment standard. It
is open to discussion whether the effects of a domestic measure that are openly
discriminatory can be accepted on the basis of this exception and, so far, no case has
been brought to the Dispute Settlement system under this article.
4
The GATT contains no equivalent disposition. Consequently, measures on data
protection have no special status in comparison with any other kind of policies. Since
the GATS article XIV sets exceptions, the GATT cannot be construed to incorporate
such rule. So, it shall not produce effects equivalent to an import tax or quantitative
measure, just as it cannot be implemented in a discriminatory way or, in other words,
contrary to most favoured nation clause or national treatment standards. The Dispute
Settlement system discussed two cases (DS196 and DS171) on “test data protection
for agricultural chemicals”, which are not covered by the meaning of “data protection” in this report.
Nevertheless, there is a clear potential use of data protection policies to restrict or
divert trade. In particular, the use of adequacy criteria to allow cross-border data
transfers whenever the target jurisdiction is in a white list have a strong potential to
be equated to a restrictive discriminatory measure.
4 Data in https://www.wto.org/english/tratop_e/dispu_e/dispu_agreements_index_e.htm, consulted
in January 21st, 2018.
484
J. A. F. Costa
International Law imposes limits to state activities. The WTO system, as an international law institution, also imposes some legal limits to domestic policies. As far
as these policies do not affect the trade among its Members, States are free to do
whatever they want. It is generally expected that sovereign governments do respect
the rules and principles they agreed upon and, though the international dispute
resolution and sanctions systems are relatively weak, these expectations are normally
respected.
Data protection was no trendy topic when the WTO agreement was signed in
1994. Nevertheless, an important rule in this respect was included in the GATS
agreement, namely:
Art. XIV (c) (ii)
(. . .) nothing in this Agreement shall be construed to prevent the adoption or enforcement by
any Member of measures:
(c) necessary to secure compliance with laws or regulations which are not inconsistent with
the provisions of this Agreement including those relating to:
(ii) 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.
The purpose of this rule is to explicitly except state policies regarding the
protection of personal data from the coverage of liberalization rules, including the
most favoured nation clause, when applicable, and the national treatment standard. It
is open to discussion whether the effects of a domestic measure that are openly
discriminatory can be accepted on the basis of this exception and, so far, no case has
been brought to the Dispute Settlement system under this article.
4
The GATT contains no equivalent disposition. Consequently, measures on data
protection have no special status in comparison with any other kind of policies. Since
the GATS article XIV sets exceptions, the GATT cannot be construed to incorporate
such rule. So, it shall not produce effects equivalent to an import tax or quantitative
measure, just as it cannot be implemented in a discriminatory way or, in other words,
contrary to most favoured nation clause or national treatment standards. The Dispute
Settlement system discussed two cases (DS196 and DS171) on “test data protection
for agricultural chemicals”, which are not covered by the meaning of “data protection” in this report.
Nevertheless, there is a clear potential use of data protection policies to restrict or
divert trade. In particular, the use of adequacy criteria to allow cross-border data
transfers whenever the target jurisdiction is in a white list have a strong potential to
be equated to a restrictive discriminatory measure.
4 Data in https://www.wto.org/english/tratop_e/dispu_e/dispu_agreements_index_e.htm, consulted
in January 21st, 2018.
484
J. A. F. Costa