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<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">“Like other recent trade deals, the TPP is a vehicle for helping powerful US interests write the rules of the global economy … Deals like the TPP effectively curtail Congress's authority,
potentially committing the country to abide by its rules for decades to come. That deprives us of the option to change our minds …”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span style="font-family:"Trebuchet MS","sans-serif"">How the TPP could impact regulation of everything from cars to medical devices</span></b><span style="font-family:"Trebuchet MS","sans-serif""><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">Vox<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">By Timothy B. Lee<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">November 29, 2015<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><a href="http://www.vox.com/2015/11/29/9760918/tpp-ecommerce-chapter">http://www.vox.com/2015/11/29/9760918/tpp-ecommerce-chapter</a>
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">The Trans-Pacific Partnership, a mammoth deal the Obama administration finished negotiating last month, doesn't just deal with trade in physical goods. It also establishes a number of
new rules governing how countries from Canada to Vietnam regulate the digital economy.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">Like most parts of the TPP, the new rules on electronic commerce largely reflect the priorities of US industry — in this case, large technology companies. Most of these rules — including
protections for the free flow of information, a ban on requiring information to be hosted locally, and restrictions on taxes for digital goods — seem sensible.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">But the TPP also contains a major provision with implications for how governments can regulate "smart" products — potentially everything from cars to medical devices — in an increasingly
software-intensive world. On its face, the rule doesn't seem to have very much to do with trade at all.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">It's worth asking whether it makes sense for these kinds of rules to be determined by a trade deal that was negotiated in secret and might remain in force for decades. If rules that
seem sensible today become outdated in a decade or two, it won't be easy for the US or other countries to back out.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">Making the world safe for Silicon Valley<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">Like other recent trade deals, the TPP is a vehicle for helping powerful US interests write the rules of the global economy. With US technology firms becoming increasingly powerful in
Washington — and increasingly influential at the Office of the US Trade Representative, which negotiates trade deals — it's not surprising that the TPP included many provisions favored by US technology companies.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">US technology companies have prospered on the free and open internet. So US negotiators sought — and got — language guaranteeing that TPP member countries will not impede the free flow
of information across national borders.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">Major technology companies such as Yahoo and Microsoft also worry that they could be forced to locate servers locally within each country where they do business. Some countries like
to impose this type of requirement because it's easier to regulate servers that are physically located within their territory. However, these requirements can be a big burden for companies that do business in dozens of countries around the world, and if such
data localization requirement become commonplace, it could undermine the internet's character as a seamless global network.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">The TPP gives internet providers remedies against these localization requirements. Under the TPP, no country can require that servers be located within the country in order to provide
online services there. On the other hand, countries are allowed to regulate server locations if they do so for a "legitimate public policy objective" and the regulations are narrowly focused on that objective.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">While some countries — such as China — require data localization for authoritarian reasons, others do it in an attempt to protect their citizens' privacy. The Canadian legal scholar
Michael Geist, for example, has warned that the TPP could force the provinces of British Columbia and Nova Scotia to modify privacy laws requiring certain types of data to be stored locally.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">The TPP also requires countries to participate in the fight against spam. They must either provide mechanisms for recipients to unsubscribe from spam messages or require spammers to
seek the consent of recipients before sending out spam.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">No source code disclosure<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">Perhaps the most controversial of the TPP's e-commerce requirements is language protecting the confidentiality of software source code. Source code is to computer programs what blueprints
are to buildings — they provide the technical details necessary to understand and modify how software works. For this reason, many software companies treat source code as closely guarded secrets.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">Industry groups such as the Information Technology Industry Council worry that government agencies could use source code disclosure rules as a method of industrial espionage on behalf
of homegrown software firms. A government could require American companies such as Microsoft or Adobe to disclose their source code and then hand it off to local companies to help them produce knockoff versions of their products.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">When I asked the ITIC for examples of this problem, it wasn't able to name any among TPP countries. But it said this has been a problem in Indonesia, a country in the region that might
want to join the TPP in the future.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">The objective of preventing industrial espionage seems reasonable, but this requirement could also hamper legitimate regulatory efforts. Take Volkswagen's emissions scandal as an example.
Volkswagen's vehicles had special software to detect when it was in a testing facility and modify the car's behavior emit less pollution.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">There are many ways regulators could try to detect this kind of cheating. But one possibility would be for the Environmental Protection Agency to require carmakers to disclose the source
code for onboard software for certain key components. Auditing this source code could not only help detect cheating but could also help investigators identify other flaws in vehicle emissions systems.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">Another example: Medical devices such as pacemakers increasingly include embedded software that could have bugs or even be vulnerable to hacking. While source code audits are not currently
part of the Food and Drug Administration's process for approving medical devices, we might want to make that a part of the process in the future.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">Breathalyzers are a third example. These machines for catching drunk drivers are increasingly likely to be digital devices powered by software, and there's an active debate about whether
defendants have a right to access the source code for these devices to see if they might be making diagnostic mistakes.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">Of course, reasonable people can disagree about whether source code disclosure makes sense in any of these specific cases. But as software affects more aspects of our lives, it seems
likely that there will be at least some cases where access to source code will help regulators do their jobs. Permanently barring governments from mandating source code disclosure seems shortsighted.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">To be fair, it's possible the TPP will provide an exception that could allow regulators to access source code in some cases. The e-commerce chapter is subject to a provision of the 1994
GATT agreement that allows countries to adopt measures that are necessary to protect human life and health. We don't know how broadly this exception would apply. Opponents of disclosure might argue that access to source code wasn't strictly necessary for protecting
health and safety.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">The broader question is whether it makes sense to settle questions like this in a trade treaty at all. Traditionally, questions about how to regulate air pollution and medical device
safety have rested with our elected representatives in Congress.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">Deals like the TPP effectively curtail Congress's authority, potentially committing the country to abide by its rules for decades to come. That deprives us of the option to change our
minds about the propriety of source code disclosure or data localization rules in the future. Even if the rules seem sensible today, we may come to regret them in the future.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><b><span style="font-family:"Bell MT","serif"">Michael F. Dolan, J.D.<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-family:"Bell MT","serif"">Legislative Representative<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Bell MT","serif"">International Brotherhood of Teamsters<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Bell MT","serif"">Desk 202.624.6891<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Bell MT","serif"">Fax 202.624.8973<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Bell MT","serif"">Cell 202.437.2254<o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
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