Policy Space Conflict under GATS Art XIV: Limitation, Dilemma, and Challenge for Data Ethics in International Data Service Trade

Abstract

This article interrogates the contested policy space under Article XIV of the General Agreement on Trade in Services (GATS) in the governance of cross-border data services. It demonstrates how the indeterminacy of the public morals and national security exceptions (Articles XIV and XIV bis) enables states to justify trade-restrictive measures that contravene the multilateral disciplines of Most-Favoured-Nation (MFN) treatment, National Treatment (NT), Domestic Regulation, and the participation rights of developing countries. Considering the RESTRICT Act and recent social media sanctions as focal examples, the article argues that ethical concerns—ranging from privacy protection to algorithmic bias and moral dilemmas in automated decision-making—are increasingly instrumentalized as neo-protectionist tools. This juridical ambiguity not only expands domestic regulatory discretion but also entrenches structural asymmetries in the digital economy, particularly between the Global North and South. Against the backdrop of a paralyzed WTO Appellate Body, the article calls for recalibrating exception clauses through clearer necessity and proportionality tests, embedding technology-neutral standards, and reinvigorating multilateral negotiations to mitigate regulatory fragmentation in the data services trade.