[CTC] Anti-China Trade Bill Is Big Boost for Big Tech

Fri May 28 12:14:38 PDT 2021

https://theintercept.com/2021/05/28/trade-bill-china-big-tech/ <https://theintercept.com/2021/05/28/trade-bill-china-big-tech/>

ANTI-CHINA TRADE BILL IS BIG BOOST FOR BIG TECH
By Sara Sirota, Ryan Grim
5/28/21

ON THURSDAY AFTERNOON, the U.S. Senate was presented with an 850-page amendment to a bipartisan piece of legislation that has already drawn controversy for a provision that preps a $10 billion bailout <https://theintercept.com/2021/05/25/jeff-bezos-blue-origin-senate-bailout/> for a space firm run by Jeff Bezos.

In the scramble that followed, they were given just a few hours to read it, and only four senators — Tom Cotton, R-Ark., Josh Hawley, R-Mo., Marco Rubio, R-Fla., and Bernie Sanders, I-Vt. — voted against the measure. In the wake of the vote, the contours of what the Senate passed with more than 90 votes is beginning to come into view. At its heart, the measure strips authority from the new U.S. Trade Representative Katherine Tai, who has already shaken up the global trade order by launching a direct challenge to the pharmaceutical industry over its vaccine patent rights <https://theintercept.com/2021/05/12/intercepted-covid-vaccine-intellectual-property-waiver/>.

The bill instead shifts power to Big Tech, insisting the Office of the U.S. Trade Representative recognize a host of new restrictions on the ways that governments around the world are allowed to challenge the monopolistic power of technology companies.

The measure justifies its defense of Big Tech by claiming that it is standing up against censorship in China, but critics argue it is in fact intended — and will be used — to push back against data privacy efforts around the world, which have become a threat to the tech business model.

The trade bill was the cause of much mayhem on the Senate floor and, despite the lopsided vote, now threatens Senate Majority Leader Chuck Schumer’s prized China bill. Schumer initially forbade trade amendments to the Innovation and Competition Act but eventually relented after Sen. Mike Crapo, R-Idaho, threatened to blow up the legislation if they weren’t included.

The amendment, sponsored by Sens. Crapo and Ron Wyden, D-Ore., the two most powerful lawmakers on the Senate Finance Committee, got a last-minute inclusion in the China bill with little time for lawmakers to scrutinize or even seriously review its content. One particular proposal in the bill modifies the Trade Act of 1974 to support Big Tech’s fight against international online censorship — much to the concern of activists who worked behind the scenes seeking its removal.

The provision calls on the Office of the U.S. Trade Representative to come up with an annual report of trading partners whose digital censorship regulations harm American technology companies’ business operations — which Crapo and Wyden claim would address anti-competitive trade practices like China’s so-called Great Firewall <https://theintercept.com/2019/08/08/china-censorship-bypass-app/>.

A group of consumer and labor rights organizations warned lawmakers, however, the language in the trade bill could have severe consequences for the global movement to defend user privacy rights, employment protections, and, ironically, competitive markets. A dozen organizations — including Color of Change, Decode Democracy, Jobs with Justice, and Public Citizen — sent Senate Democrats a letter Thursday, after Schumer and Crapo’s deal, urging them to abandon the censorship report plan. The letter also opposed two other Big Tech-friendly provisions that Wyden and Schumer authored, both of which were ultimately left out of the final text.

“This amendment would require the Office of the U.S. Trade Representative (USTR) to become an agent of Big Tech, continually monitoring other nations’ existing and proposed digital governance policies to undermine important pro-consumer, pro-worker, pro-privacy, pro-competitive and pro-fair-business-practices policies and proposals,” wrote the coalition. A copy of the letter was reviewed by The Intercept.

Wyden’s office dismissed concerns about his amendment as the Schumer-Crapo conflict dragged on, and the likelihood of other trade-related regulations even finding their way into the China bill seemed in doubt.

“Unfortunately, a few people seem to be misunderstanding what the amendment says,” Wyden spokesperson Keith Chu told The Intercept Wednesday. “To be clear, the Wyden-Schumer proposal would do nothing to stop Europe or democratic countries from regulating tech companies on biased algorithms, antitrust, privacy or any other legitimate policy objective.”

But free speech for people and free speech for corporations are not synonymous and are often in tension. Digital corporations have long relied on claims of First Amendment protections to challenge any regulation that threatens their revenue models.

Verizon, for example, famously sued the Federal Communications Commission a decade ago to overturn net neutrality rules, arguing government requirements for undisrupted digital traffic infringe on internet service providers’ First Amendment rights, noted Matt Stoller, an antitrust expert and director of research at the American Economic Liberties Project. AELP signed onto the letter advocating against Wyden’s proposal.

“If this were just about China instead of helping Big Tech, that section would be written solely to target China,” Stoller told The Intercept. “When you’re talking about censorship, unless you’re defining it very clearly, you open the door to a very expansive … corporate First Amendment reading.”

Meanwhile, the broader trade bill includes other Big Tech-friendly tariff relief proposals.

Specifically, the bill extends the Generalized System of Preferences program that offers developing countries duty-free access to the U.S. in exchange for adopting pro-democracy and poverty-reducing practices. But it also adds new language to persuade countries to refrain from “digital trade barriers,” such as “unnecessary or discriminatory data localization or data transfer restrictions.”

This could deter governments from adopting strong digital governance policies designed to protect consumers, workers, and competitive markets.

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

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