[CTC] Industry groups push Tai to work toward Indo-Pacific digital trade pact

[Arthur Stamoulis]

Industry groups push Tai to work toward Indo-Pacific digital trade pact
By Madeline Halpert, Inside US Trade 
9/13/2021
 
More than a dozen industry and business groups are calling on the Biden administration to develop digital trade rules with “trusted partners” in the Indo-Pacific region.

In a letter to U.S. Trade Representative Katherine Tai <https://insidetrade.com/sites/insidetrade.com/files/documents/2021/sep/wto2021_0430.pdf> last week, the groups – including the U.S. Chamber of Commerce, the Semiconductor Industry Association and the Information Technology Industry Council – write that a proliferation of digital protectionist measures around the world demands that the U.S. ramp up efforts to establish digital trade rules.

“Developing inclusive digital trade rules with trusted partners in the Indo-Pacific, whether by leading in the development of a new plurilateral agreement or pursuing the expansion of existing agreements, should be a critical element within a broader U.S. trade agenda to counter protectionist digital economy trends, safeguard the interests of U.S. workers, and bolster U.S. political, strategic, and economic equities and opportunities in the region,” the groups write. “We therefore respectfully urge you to prioritize engagement with Indo-Pacific economies to advance such rules and re-assert U.S. leadership on trade policy in this strategically important region.”

The White House has been mulling a digital trade deal as a way to counter China, though it remains in the early stages – holding internal discussions, consulting with some in the business community and making contact with other countries about digital trade issues, Inside U.S. Trade recently reported <https://insidetrade.com/node/172121>.

The administration has held conversations about digital trade with several countries in recent months. Australian Minister for Trade, Tourism and Investment Dan Tehan in August said he had held “very good discussions <https://insidetrade.com/node/17190>” about a digital regional trade agreement with both Tai and U.S. lawmakers. Tai also has discussed digital trade with Singapore’s minister of trade and industry. Last month Tai said the U.S. was “actively working <https://insidetrade.com/node/172024>” with other countries to establish digital trade rules and discussing how best to create new standards for digital economic activity.

The letter comes as Tai this week is set to meet with members of the Association of Southeast Asian Nations. Tai on Monday will participate in consultations with ASEAN economic ministers and on Wednesday will participate in the ASEAN East Asia Summit economic ministers meeting, according to USTR. All of ASEAN’s 10 members are party to the Regional Comprehensive Economic Partnership – signed by 15 countries in total in 2020 – which China has been pushing as an alternative to digital trade rules advanced by the U.S. and its allies, the business groups note in the letter.

Beijing, the groups warn, is pushing for digital trade policies that “greenlight” digital authoritarianism.

A U.S.-led digital trade accord in the Indo-Pacific would benefit U.S. companies and workers by “fostering a free and open internet, promoting inclusive trade, opening new market opportunities, and addressing discriminatory and protectionist digital trade restrictions,” the groups write in their Sept. 10 letter.

The U.S. has been a leader in advancing international rules on digital trade, the organizations contended, pointing to digital trade provisions in the U.S.-Mexico-Canada Agreement as well as a U.S.-Japan digital trade agreement negotiated by the Trump administration in 2019. 

Some of the U.S.’ closest trading partners in the Asia-Pacific region also have sought to expand digital trade rules, the letter states. Singapore and Australia in 2020 signed a digital economy agreement. And Singapore, New Zealand and Chile in 2020 signed the Digital Economy Partnership Agreement, which includes new provisions on digital inclusion, capacity building and small and medium-sized enterprises, the groups noted. Some U.S. analysts have urged the Biden administration to consider joining DEPA <https://insidetrade.com/node/171842> as an interim step for digital trade in the Indo-Pacific.

South Korea this week officially announced its intent to join the agreement. After completing domestic procedures to initiate DEPA negotiations in recent months, including informal consultations with DEPA members, a feasibility study and a public hearing, South Korea’s Ministry of Trade, Industry and Energy on Monday notified New Zealand, the depository of DEPA, that it intended to join the agreement, according to the South Korean government.

“The DEPA has the potential to serve as an extensive platform for the establishment of a digital cooperation network in the Asia-Pacific region,” the ministry said in a statement. “The government will initiate official negotiations to swiftly join the Agreement and actively participate in discussions on digital trade rules.”

Singapore and Australia’s DEA as well as DEPA have created “formalized and regular structures” for stakeholder engagement, the business groups contend in their letter to Tai. Despite these efforts, digital protectionist measures have increased in recent years, they add, pointing to a recent study from the Information Technology and Innovation Foundation that found that data localization requirements around the world more than doubled over the last four years.

As for RCEP, the groups write that while it “contains an e-commerce chapter, it is excluded from dispute settlement and rests on self-judging exceptions that will frustrate any efforts to hold China or other countries accountable for protectionist, authoritarian, or predatory digital policies.”

While the Biden administration’s engagement in the Indo-Pacific to date – including Vice President Kamala Harris’s recent trip to Singapore – is “encouraging,” the groups say, the “increasing frequency of data-restrictive practices and digital protectionist measures around the world requires that the United States play a more active role in the establishment of global norms governing digital trade.” 

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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