U.S. questions China at WTO on banking technology restrictions

Thu Mar 26, 2015 12:42pm EDT
 
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By Tom Miles

GENEVA (Reuters) - The United States is concerned about China's restrictions on the use of foreign information technology equipment by the banking sector, according to a filing published by the World Trade Organization on Thursday.

U.S. business groups have already complained about the new rules, which China announced in December, and senior officials including Secretary of State John Kerry have written to their Chinese counterparts about them.

Japan and the European Union have echoed U.S. concerns about the regulations, which China says aim to promote cybersecurity.

By bringing up the issue at the WTO, where member countries can legally challenge foreign laws that affect trade, the United States has put pressure on China to explain how the regulations - which aim to promote "secure and controllable" banking technology - comply with global trade rules.

"Could China explain what 'controllable' means?," the U.S. filing asked. "Do the guidelines apply to foreign-owned banks operating in China?"

Although it did not question China's right to improve cybersecurity, it said the definition of "secure and controllable" would severely limit access to the commercial banking sector for many foreign products and services and dictate the business decisions of financial institutions.

That raised the question of compliance with WTO rules, which bar countries from favoring domestic producers over competitors abroad, the United States said.

The regulations specify that all new computer servers, desktop computers and laptop computers and 50 percent of new tablets and smartphones bought by the banking industry must meet "security and controllability" requirements, it said.   Continued...

 
U.S. (L) and Chinese national flags flutter on a light post at the Tiananmen Square ahead of a welcoming ceremony for U.S. President Barack Obama, in Beijing, November 12, 2014. REUTERS/Petar Kujundzic