[CTC] Big Tech trying to ‘weaponize’ U.S. trade talks, Democrats warn

[Arthur Stamoulis]

https://www.washingtonpost.com/politics/2023/04/24/big-tech-trying-weaponize-us-trade-talks-democrats-warn/ <https://www.washingtonpost.com/politics/2023/04/24/big-tech-trying-weaponize-us-trade-talks-democrats-warn/>

Big Tech trying to ‘weaponize’ U.S. trade talks, Democrats warn
By Cristiano Lima
4/24/23
A group of prominent Democratic lawmakers is urging the Biden administration to reject efforts by Big Tech to influence U.S. trade talks, warning that industry groups are trying to co-opt negotiations to evade regulations both at home and abroad. 

In a letter Friday <https://www.washingtonpost.com/documents/1c8ae425-392a-49bf-afe1-d3d0ff0e8601.pdf?itid=lk_inline_manual_7> to the Commerce Department and the U.S. Trade Representative (USTR), Sen. Elizabeth Warren (Mass.) and other lawmakers sounded the alarm on what they called a push to “tie Congress’s and regulators’ hands” in its ongoing negotiations over Indo-Pacific trade.

If successful, the tech giants may be able to dodge rules targeting anti-competitive conduct in the sector by claiming those policies constitute “illegal trade discrimination,” the lawmakers wrote in the letter, shared exclusively with The Technology 202. 

The missive reflects mounting concern in Washington that tech companies are trying to preempt regulatory threats through under-the-radar trade provisions while Congress is still debating its next steps on issues like competition and privacy.

The warning arrives as the administration tries to hammer out a trade framework with 13 other countries, including Japan, South Korea and Australia, in one of the first major tests of how it will approach the contentious debate around digital trade.

The bloc has said it plans to tackle <https://ustr.gov/sites/default/files/2022-09/IPEF%20Pillar%201%20Ministerial%20Text%20(Trade%20Pillar)_FOR%20PUBLIC%20RELEASE%20(1).pdf> issues around the “digital economy,” including how to advance “inclusive digital trade by … addressing discriminatory practices,” but it is still negotiating a deal. Lawmakers and consumer advocates have expressed concern <https://www.washingtonpost.com/politics/2023/03/15/advocates-urge-us-not-offer-big-tech-favored-terms-trade-talks/?itid=lk_inline_manual_14> about U.S. negotiators reusing past language that companies could seize on to push back on regulations, including those the United States struck in its trade pact with Mexico and Canada.

It’s an issue that has forged unlikely alliances between officials on both sides of the aisle. In 2019, Sen. Ted Cruz (R-Tex.) and House Speaker Nancy Pelosi (D-Calif.) each <https://www.politico.com/news/2019/11/01/ted-cruz-online-liability-trade-deals-063911> urged <https://www.wsj.com/articles/nancy-pelosi-pushes-to-remove-legal-protections-for-online-content-in-trade-pact-11575503157> the Trump administration to drop from its talks with Canada and Mexico language that could limit Congress’s ability to tackle the tech industry’s liability protections under Section 230.

“The U.S. is committed to building trust and promoting confidence in the digital economy and seeks to include provisions designed to avoid unfair trade practices, while recognizing the need to be able to address legitimate public policy objectives in the digital trade area,” USTR spokesman Sam Michel said in a statement.

“We have received the letter and will respond through appropriate channels,” Commerce spokesman Charlie Andrews said in an email.

In the latest Indo-Pacific trade talks, U.S. officials have offered a digital trade proposal that closely resembles its past pact with Mexico and Canada, according to two people familiar with the matter who spoke on the condition of anonymity to discuss the sensitive material.

That previous deal included a digital trade section <https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/Text/19-Digital-Trade.pdf> that stated that no participating countries “shall accord less favorable treatment to a digital product … of another” or “prohibit or restrict the cross-border transfer of information, including personal information, by electronic means.”

Congressional offices in recent weeks have reviewed the new proposal, which is classified, at secure facilities on Capitol Hill, the people said. 

While Democratic lawmakers declined to address the terms of the proposal in their letter, they expressed concern that industry groups are trying to "weaponize" its provisions to kneecap efforts to rein in companies’ competition and data privacy practices and their use of artificial intelligence.

A spokesperson for Warren, who led the letter, declined to comment on the contents of the U.S. proposal. 

The letter was co-signed by a number of Democratic leaders on competition, privacy and trade policy, including Sens.Amy Klobuchar (Minn.), Sherrod Brown (Ohio) and Richard Blumenthal (Conn.) and Reps. David N. Cicilline(R.I.), Jan Schakowsky (Ill.) and Rosa L. DeLauro (Conn.).

Lawmakers are also raising concern about the “speed” and opaque nature of the talks.

They noted that “only a few cleared advisors, Members of Congress, and their staff with security clearances were allowed to see” the proposal the United States has offered “due to its classification status, hindering the ability of Congress and the public to meaningfully engage.”

While USTR has not publicly disclosed any negotiating text regarding digital trade for the Indo-Pacific talks, the agencyreleased a summary <https://ustr.gov/sites/default/files/2023-04/IPEF%20Pillar%201%20text%20summaries%20USTR%20April%202023.pdf> stating that the “proposed text includes provisions addressing data protection, consumer protection, and artificial intelligence that support inclusive growth by promoting trust in the digital economy.”

Michel, the USTR spokesman, said the agency has conducted nearly 400 briefings with members of Congress in the past year, including on the Indo-Pacific talks.

Foreign officials have said the Indo-Pacific talks could wrap as soon as November <https://insidetrade.com/daily-news/fiji-minister-ipef-talks-expected-conclude-november-after-six-more-rounds>.
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