[CTC] Tai tells GOP senators she’s ‘proud’ digital trade stance is providing policy space

Fri Apr 19 05:57:33 PDT 2024

Tai tells GOP senators she’s ‘proud’ digital trade stance is providing policy space
Inside U.S. Trade, April 18, 2024 at 5:40 PM

U.S. Trade Representative Katherine Tai is “proud” that her decision to end support for longstanding digital trade positions has given the administration and Congress space to formulate policy, she said this week, rebutting Republican senators’ claims that she was running afoul of bipartisan congressional intent.

In an April 16 letter <https://insidetrade.com/sites/insidetrade.com/files/documents/2024/apr/wto2024_0442a.pdf> to Senate Finance Committee member Marsha Blackburn (R-TN), obtained by Inside U.S. Trade, Tai offered a staunch defense of her decision to withdraw U.S. proposals on digital trade, data localization and source code in plurilateral e-commerce talks at the World Trade Organization. She was responding to a March 19 letter <https://insidetrade.com/sites/insidetrade.com/files/documents/2024/mar/wto2024_0338a.pdf> that Blackburn, along with eight other Republican senators including Finance ranking member Mike Crapo (R-ID), had sent to Tai blasting the decision <https://insidetrade.com/node/179615> as an affront to Congress and a threat to U.S. leadership on digital trade. All of the signatories also were sent the letter by Tai.

In the plurilateral talks in Geneva, called a joint statement initiative, the U.S. is “working towards an agreement that provides benefits to workers, consumers, producers, content creators, and small businesses participating in the digital economy, and that supports participation of developing WTO members,” Tai wrote. “The Biden-Harris Administration remains mindful of ongoing domestic and global discourse on how to best approach the legislative and regulatory challenges posed by emerging technologies, including artificial intelligence, and the debate on the impact of digital trade rules on important policy objectives such as privacy, security, democracy, and competition. Additionally, it is important that the Biden-Harris Administration have a consistent negotiating posture across trade negotiations.”

Accordingly, Tai said, she withdrew support for the proposals – which, she noted, were put forth by the Trump administration – to “align our formal position in the JSI with the overall approach of the Biden-Harris Administration and ensure that we are provided enough flexibility in the ongoing negotiations to allow for updated domestic approaches to be considered, around which trade rules can then be crafted. Moreover, the United States remains engaged in the WTO JSI negotiations [and] is able to defend against attempts by any member, including China, to undermine our interests.”

“I am proud that my decision to withdraw support for certain attributions put forward by the previous Administration is helping create space for Congress and the Administration to act,” she added.

In her response to the senators’ contention that, since 2015, “there has been bipartisan agreement in Congress on digital trade issues,” Tai said Congress in recent years “has on a bipartisan basis actively debated these issues and put forward legislation to reform the tech industry and its practices.”

Her letter lists several examples, including debate during Congress’ consideration of the U.S.-Mexico-Canada Agreement over Section 230 of the Communications Decency Act, which provides limited federal immunity to providers and users of computer services – effectively keeping providers from being held liable for information posted by users.

As Tai notes, Section 230 has been controversial in the trade context and writ large, with many bills to reform it introduced in the last Congress. “In addition,” her letter states, “congressional committees have debated reforming Section 230 and members have launched investigations into the tech industry and the impact of Section 230.”

Lawmakers also have introduced a host of other bills related to the e-commerce proposals, “including legislation to enhance competition in the technology sector, protect online data privacy, and regulate the use of algorithms to support workers and address racial discrimination,” Tai contends. “Finally, during consultations regarding the Indo-Pacific Economic Framework, Members of Congress – including members of the Senate Finance Committee – raised strong concerns with the previous approach to these issues and urged USTR to adopt a new approach that reflected the ongoing debate in Congress.”

Tai also notes that both the administration and Congress have taken additional actions in the digital space since her decision was announced in Geneva. For one, President Biden in February signed an executive order <https://insidetrade.com/node/179269> to prevent access to Americans’ “bulk sensitive personal data” and U.S. government data by countries of concern. Also, the House has passed the “Protecting Americans’ Data from Foreign Adversaries Act,” crafted to prevent brokers from transferring personal data to adversaries such as China, she writes.

“My decision was informed by the many consultations USTR has held over the last few years with Congress, stakeholders and across the Executive Branch,” Tai adds. “We have heard a variety of views and perspectives including support for USTR’s decision to withdraw certain attributions from the WTO JSI from many stakeholders and members of the House and Senate who conveyed that our decision created policy space Congress and regulatory agencies need to address emerging technology issues such as data privacy, discrimination, competition, and workers’ rights.”

“Moving forward, I will continue to engage in the consultation process as the E-commerce JSI progresses and as these issues evolve,” she concludes.

During hearings this week before the Senate Finance and House Ways & Means committees, Tai faced a barrage of criticism – and some support <https://insidetrade.com/node/179801> – for her decision on digital trade. She offered a defense similar to that laid out in her letter.

At the Finance hearing, Tai told Sen. Todd Young (R-IN) that part of her reasoning involved how the U.S. might be able to defend policies that Congress was considering if challenged at the WTO.

The e-commerce proposals are “good signaling language,” she said. “The challenge is that it’s kind of defining where the companies and the private sectors can have free rein and it really cabins governmental action, regulatory action into the confines of some exceptions. One of the serious concerns we have – and at USTR it’s because we are trade negotiators, we’re also the trade litigators; we bring cases, we also have to defend – that those exceptions make us extremely nervous given the kinds of debate [on Capitol Hill] which are asserting the interests of American into this framework, which is not reflected in the proposals.”

Blackburn, however, rejected the idea that support for the digital proposals was mutually exclusive of privacy legislation, citing as an example the European Union’s enactment of its General Data Protection Regulation.
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Sen. Elizabeth Warren (D-MA), meanwhile, complimented Tai for “standing up to Big Tech’s digital trade agenda and China’s digital authoritarianism.” -- Dan Dupont (ddupont at iwpnews.com <mailto:ddupont at iwpnews.com>)

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

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