Pushing the Limit of Global Governance: Trading Rights, Censorship, and WTO Jurisprudence – A Commentary on China-Audiovisual Services

Abstract

For decades, China has maintained state import monopoly in cultural products. The opaque state-trading operations ensure a maximum level of flexibility and efficacy in the censorship of imports desired by the Communist Party. The recent WTO decision in China–Audiovisual Services held that this practice is inconsistent with China’s trading rights commitments under its Accession Protocol and cannot be justified by the public morals exception of the GATT. To comply with the WTO ruling, China must restructure its censorship regime, which may well result in stricter restrictions on cultural imports than the current system. By requiring China to restructure its censorship regime so as to ensure private trading rights, the WTO judiciary has pushed global governance to a new level. This decision is the latest indication that the world trading system has moved beyond its traditional governance model solely concerned with economic protectionism, towards a new model that mandates convergence in domestic governance norms. In rendering this decision, the Appellate Body broke new ground in WTO jurisprudence. But its jurisprudence is ultimately problematic because it failed to interpret the trading rights provisions in their systemic context and in the light of their object and purpose. As a result, the Appellate Body committed serious errors in its legal analysis and was unable to provide any policy rationale in support of this far-reaching decision.