[CTC] U.S. to end support for WTO e-commerce proposals, wants ‘policy space’ for digital trade rethink

[Arthur Stamoulis]

U.S. to end support for WTO e-commerce proposals, wants ‘policy space’ for
digital trade rethink

Inside US Trade, October 24, 2023 at 10:28 PM

The Biden administration will end its support for proposals on data flows,
data localization and source code being discussed in World Trade
Organization negotiations on e-commerce to ensure sufficient “policy space”
for the U.S. and others to assess their approaches to digital trade, Inside
U.S. Trade has learned.
The U.S. will announce the decision at the WTO on Wednesday morning at a
meeting of countries that are party to the joint statement initiative on
e-commerce.
In a statement, Office of the U.S. Trade Representative spokesman Sam
Michel noted that “many countries, including the United States, are
examining their approaches to data and source code, and the impact of trade
rules in these areas.”
“In order to provide enough policy space for those debates to unfold, the
United States has removed its support for proposals that might prejudice or
hinder those domestic policy considerations,” he added.
USTR believes the plurilateral initiative is important, however, and the
U.S. “intends to remain an active participant in those talks,” Michel said.
The move – which followed consultations with Congress – marks a departure
for the U.S. on digital trade sure to anger some tech companies and their
backers in Congress.
The decision drew praise from Senate Finance Committee member Elizabeth
Warren (D-MA), who has long contended that “Big Tech” companies are angling
to use trade deals to pre-empt domestic regulations and international
rules.
In a statement, she said “Big Tech lobbyists are trying to use trade deals
to undermine the Biden administration’s efforts to promote competition, and
it’s welcome news that [USTR] Ambassador Tai is rejecting that effort at
the WTO.”
“We need to make clear that digital rules favoring Big Tech monopolies are
a non-starter for the U.S. in any trade agreement, including IPEF,” she
added, referring to the U.S.-led Indo-Pacific Economic Framework for
Prosperity, which includes a digital trade component.
But Nigel Cory, associate director for trade policy at the Information
Technology and Innovation Foundation, a think tank focused on technology
policy that receives funding from a wide range of donors including major
tech companies, blasted the decision.
“The United States’ decision to walk away from long-running negotiations on
new, much needed digital trade rules is nonsensical,” he said in an email.
“Data and digital technologies are the future of the U.S. economy – not
steel, agriculture, or other traditional economic sectors. The United
States is stepping away from good faith efforts to work with likeminded
partners – Australia, Canada, Japan, Singapore, the United Kingdom, and
many others – to develop new, high-standard rules for today’s digital
economy.”
USTR, he charged, “doesn’t wanted balanced trade rules, but ones that allow
countries to discriminate against U.S. tech firms. It’s truly misguided
that USTR decided to withdraw from global efforts at the WTO in a response
to the views of a few progressive congressional representatives, who
otherwise tried and failed to pass to their own preferred competition
policy in the democratic forum of the U.S. Congress.”
Cory said the provisions USTR will back away from in the e-commerce talks,
covering data flows, data localization and source code, have larger
implications. He contended that they are “in direct response to Chinese
digital protectionism and authoritarianism, which the Biden administration
is otherwise supposed to be counteracting in cooperation with likeminded
trading partners. It also tells us all we need to know about what to expect
on data and digital trade in the Indo-Pacific Economic Framework – nothing
of substance.”
In August, Inside U.S. Trade reported that participants in the plurilateral
negotiations on e-commerce – more than 80 overall, including China, the
European Union and many other large economies – had largely agreed to
provisions on a swath of digital trade-facilitating provisions but remained
divided on thornier issues like privacy and cross-border data flows. The
negotiations are being led by Japan, Australia and Singapore; the three
have said they hope to achieve a “substantial conclusion” of the talks by
the end of 2023.
An Aug. 4 text, however, showed that while a majority of the provisions
were largely finished, a small number of key issues were still very much in
play – including some on privacy, cross-border data flows, data
localization and source code.
On cross-border data flows, participants as of August were not in agreement
on how much or even whether to narrow a commitment to allowing such flows.
The U.S. was backing the broadest option: “No [party/member] shall prohibit
or restrict the cross-border transfer of information, including personal
information, by electronic means, if this activity is for the conduct of
the business of a covered person,” the text read. -- Dan Dupont (
ddupont at iwpnews.com).




Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826
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