[CTC] Bipartisan Group Of 14 Senators Urges Financial Services Data Fix In TPP

[Arthur Stamoulis]

Inside U.S. Trade - 03/11/2016
Bipartisan Group Of 14 Senators Urges Financial Services Data Fix In TPP
March 10, 2016

A bipartisan group of 14 senators, including six Democrats whose votes would likely be needed to pass the Trans-Pacific Partnership (TPP), has urged Treasury Secretary Jacob Lew and senior trade officials to fix the exclusion of financial services from a ban on local data storage requirements otherwise applicable in the agreement.

They urged the administration officials in a March 7 letter to fix this problem flagged by the financial services industry in TPP and adopt a uniform approach in any trade and investment agreement. This includes the Transatlantic Trade and Investment Partnership (TTIP), the U.S.-China Bilateral Investment Treaty and the Trade in Services Agreement (TISA), the senators said.

"We request that your agencies address the gaps in the current approach and adopt a single approach going forward to ensure that we can increase data security and ensure that all U.S. companies benefit from strong rules on cross-border data flows, including a prohibition on data localization requirements," they said. "We look forward to your timely engagement to address these issues.”

In the TISA negotiations, the administration has not taken a position on how it wants to handle financial services in the e-commerce chapter, a clear sign that no policy decision on this issue has been made, industry sources said. But the administration has made clear in TISA that its proposal banning local performance and local content requirements does not cover the data localization issue, they said.

The administration has been considering industry demands for financial services firms to be covered by a ban on local data storage requirements, including during meetings of cabinet secretaries at the White House, but so far has not made a decision.

Also this week, Commerce Undersecretary Stefan Selig said the issue is under consideration. "I can tell you that the Administration is working closely with industry and our regulators on this very issue," he said at a March 9 WITA event.

One industry source following the issue said that the tone of the letter clearly reflects the fact that the administration is considering how to deal with this issue.

Of the six Democrats signing the letter, four voted for the final passage of fast-track legislation earlier this year. They include Sens. Tom Carper (D-DE) and Michael Bennet (D-CO), who both sit on the Finance Committee, as well as Sens. Claire McCaskill (D-MO) and Jeanne Shaheen (D-NH), who do not sit on committees with jurisdiction over trade.

The Democrats who signed the but did not vote for fast track are Sen. Robert Menendez (D-NJ), who also sits on the Finance and Banking committees, and Sen. Gary Peters (D-MI).

The Republicans signing the letter all voted for fast-track. They include Sens. Michael Rounds (R-SD) and Bob Corker (R-TN), who both sit on Senate Banking. Four of the Republican signatories sit on Finance: they are Sens. John Thune (R-SD), Pat Roberts (R-KS), Johnny Isakson (R-GA) and John Cornyn (R-TX). The letter is also signed by Sens. Kelly Ayotte (R-NH) and Roy Blunt (R-MO).

In addition to Lew, the letter is addressed to National Economic Council Director Jeffrey Zients, U.S. Trade Representative Michael Froman, and Commerce Secretary Penny Pritzker.

The letter comes after a similar one sent in January by 63 House lawmakers urging the administration to ban local server requirements for the financial services sector in the Trans-Pacific Partnership (TPP) and future trade agreements (Inside U.S. Trade, Jan. 15).
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