GENEVA - CENSORSHIP of the Internet is open to challenge at the World Trade Organization as it can restrict trade in services delivered online, a forthcoming study says.

A censorship case at the WTO could raise sovereignty issues, given the clear right of member states to restrict trade on moral grounds - for example, by blocking access to child pornography websites.

But a WTO ruling could set limits on blanket censorship and compel states instead to use more selective filtering, according to the study, to be published on Thursday by think-tank ECIPE.

'Censorship is the most important non-tariff barrier to the provision of online services, and a case might clarify the circumstances in which different forms of censorship are WTO-consistent. Many WTO member states are legally obliged to permit an unrestricted supply of cross-border Internet services,' said the study by Brian Hindley and Hosuk Lee-Makiyama.

Many countries censor the Internet for political or moral reasons. China has developed one of the most pervasive systems, in Cuba all unauthorised surfing is illegal, and many Western countries limit access to child porn sites.

Internet use is particularly strong in Asia. China, with 298 million people online, overtook the United States in numbers of Internet users in 2008, the study said. Internet censorship can have a serious impact on businesses, it said, noting how local search engine Baidu, which follows official rules on censorship, has overtaken global leader Google in the Chinese market. -- REUTERS