40 US trade bodies urge govt to reassert leadership on digital trade

In October 2023, the office of the US trade representative (USTR) withdrew its support for proposed World Trade Organisation (WTO) disciplines that protect cross-border data flows, prohibit data localisation mandates, preclude discrimination against US companies and the digital goods and services they produce, and safeguard sensitive source code from malicious cyberactivity and theft, the associations said.

This action followed USTR’s abandonment of these core US policy priorities in the Indo-Pacific Economic Framework for Prosperity (IPEF) discussions–a major factor in the collapse of the IPEF trade negotiations, a joint letter by the associations addressed to National Security Council director Jacob Sullivan and National Economic Council director Lael Brainard said.

The 2024 National Trade Estimate (NTE) Report on Foreign Trade Barriers released by USTR omits many digital trade barriers contrary to the digital trade priorities outlined by bipartisan congressional majorities and its statutory obligation to describe and quantify barriers to e-commerce and services exports, the letter said.

USTR’s ‘harmful approach’ to digital trade has faced considerable pushback. Democrats and Republicans in the House of Representatives and Senate have demanded transparency about the decision-making process that led to this major departure from longstanding policy.

Forty-five business organisations representing US companies in every sector of the economy stated that the digital trade positions USTR put on hold “advance US innovation and competitiveness, fuel economic growth, and support the exchange of knowledge and information necessary to address climate, health, and other global challenges.”

Small and medium enterprises (SMEs) noted that USTR’s decision “weakens the global competitiveness of US start-ups.

Civil rights, civil liberties, open Internet advocates, and digital trade experts asserted that USTR’s about face on digital trade could “signal an abandonment of those principles of openness, freedom, and non-discrimination.”

In the months since USTR’s WTO announcement, inaccurate statements have been repeated by the USTR, the letter alleged.

USTR has aligned itself with fringe voices advocating that strong digital trade rules only benefit big tech, which is a fallacy, the associations stressed.

These rules protect American digitally-enabled exports from discriminatory treatment and prevent cutting edge US technologies from being stolen in foreign markets. Additionally, SMEs stand to benefit most from strong digital trade rules.

Strong digital trade rules do not stand in the way of agencies that regulate the US economy or impede Congress from passing laws. USTR has sought to justify its WTO decision by stating that the United States needs ‘policy space’ for new laws on privacy and other issues before it can negotiate on digital trade. This is not accurate, asserted the letter.

The associations, therefore, requested the US administration to return to policies that safeguard cross-border data flows and prevent discrimination against American companies.

Fibre2Fashion News Desk (DS)