[CTC] Tai: U.S. ‘actively working’ with partners to establish digital trade rules

Tue Aug 24 06:59:08 PDT 2021

Tai: U.S. ‘actively working’ with partners to establish digital trade rules
By Madeline Halpert, Inside US Trade 
8/20/2021

The U.S. is “actively working” with other countries to establish digital trade rules and discussing how best to create new standards for digital economic activity, according to U.S. Trade Representative Katherine Tai.

The White House in recent months has been mulling <https://insidetrade.com/node/171819> a digital trade deal in the Indo-Pacific region as a way to counter China, though the administration has not publicly revealed its plans.

But Tai, in an interview published this week by Northwest Asian Weekly <https://nwasianweekly.com/2021/08/talking-trade-with-ambassador-tai/> said the U.S. has been engaging “robustly” with trading partners in Europe and in the Asia-Pacific region.

“This is an area that we are actively working on with our partners to establish rules and have conversations that we need to establish mutually beneficial relationships and to figure out the best ways to create rules for our economic activity,” Tai said, according to the interview. Tai recently traveled to Washington State <https://insidetrade.com/node/171931> to meet with agriculture and farm stakeholders in an effort to “reconnect” with America and with economic constituents, as she said in the interview.

The COVID-19 pandemic has fueled the “digital nature” of the economy, Tai said, according to the report. The digital trade space, she said, has “implications for more than just our economic values but both our political and societal values.”

“It is an area that we have been engaging robustly with a lot of our trading partners in Europe and in Asia-Pacific,” she said, adding that the U.S. needs leadership and “new thinking” in the digital trade area.

The administration in recent months has discussed digital trade with several countries, according to readouts from USTR. In June, Tai discussed digital trade with Singapore Minister of Trade and Industry Gan Kim Yong. And in March, digital trade was on the agenda for Secretary of State Antony Blinken’s meeting with Japanese Foreign Affairs Minister Toshimitsu Motegi.

Earlier this month, Australian Minister for Trade, Tourism and Investment Dan Tehan said <https://insidetrade.com/node/171910> he had held “very good conversations” about a digital trade agreement with Tai as well as members of Congress during a trip to the U.S. Australia, Singapore, Japan, South Korea, Canada, New Zealand and Chile are all prime candidates for an agreement, Tehan said, adding that Australia’s digital economy agreement with Singapore could serve as a blueprint.

Many members of Congress and prominent U.S. industry associations have called for the U.S. to forge a digital trade agreement with allies, especially those in the Asia-Pacific region. Some see it as a step toward more engagement in the area in the wake of the Trump administration’s decision to end U.S. participation in the Trans-Pacific Partnership. A digital trade agreement between the U.S. and Japan and the digital trade provisions in the U.S.-Mexico-Canada Agreement have been named as possible blueprints for the U.S. should it engage in talks on a broader deal.

 U.S. Chamber of Commerce Senior Vice President for International Policy John Murphy this week advocated for the U.S. to pursue a digital trade agreement because, he said, the country finds itself “at a moment of promise and peril on digital trade.”

"Export opportunities for U.S. small businesses and service industries are expanding rapidly, and the United States is well positioned to build on its formidable advantages in these areas,” he said in an essay <https://www.uschamber.com/issue-brief/digital-commerce-the-crossroads-the-case-digital-trade-agreement> published by the Chamber. “However, these opportunities are endangered by the spread of digital protectionism and the accumulation of discriminatory digital rules that often target American firms.”

Small American businesses and exporters stand to benefit from the digital revolution, Murphy wrote, contending that digital technologies offer new opportunities to overcome “longstanding hurdles facing small exporters.” The U.S. services sector would benefit as well, he said.

But as countries around the world erect barriers to trade in the form of data localization requirements and data flow restrictions, American workers and companies’ ability to tap overseas markets is increasingly uncertain, Murphy said.

“While these challenges are formidable, the Chamber and its members are convinced that the best defense against this trend is a good offense: The United States must act swiftly to strengthen international rules for digital trade,” Murphy said. "This should include rules to guarantee the ability to move data across international borders, prohibit forced localization of data, and bar customs duties on electronic transmissions, among other objectives.”

A host of countries in the Asia-Pacific region have expressed interest in a digital trade agreement, Murphy said. The “architecture” of such a deal should be open, he contended, leaving room for other countries from all around the world to join if they can adhere to the deal’s commitments.

The U.S. must be a leader on digital trade, Murphy said. “It is time for the United States to move forward on this important initiative,” he writes.

The Biden administration is mulling next steps on digital trade while it also conducts a sweeping review of its policies toward China. That includes a top-to-bottom review of trade policy at USTR. In the interview with Northwest Asian Weekly, Tai did not provide specifics on the review – expected to be completed in the fall – but said she feels “a serious sense of responsibility” to develop a strategic vision for the U.S.-China relationship.

Tai said has spent much time and energy on the review and is working “across the administration” to develop that vision.

“It’s to ensure that our strategy with respect to China is coordinated and ultimately effective in placing the American economy – our farmers, workers, businessmen, and fishermen on the strongest possible competitive footing as we can in the global economy – where we will be competing with China in the years to come,” she said.

The U.S.  must “define” the challenge it faces with China, Tai added. “It is a very serious challenge,” she said, according to the report.

“We have to approach our problems and challenges and also the formulation of our solutions and strategies with coherence and sobriety,” she said, “because at the end of the day, we need to have very rational policies and a very clear vision in order to ensure that we can navigate our way to a really strong position while competing.”

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

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