The Time is Now for the U.S. to Lead on Digital Trade

Story by Mary Kate Carter, U.S. Chamber of Commerce

The Internet is the modern marketplace — buyers and sellers can reach each other on a global scale without stepping outside their door. Moreover, it’s increasingly rare to find a company that conducts business, regardless of sector, without moving and accessing information across borders. Digital trade is critical to the success and growth of the American economy, and the United States must demonstrate global leadership in shaping the digital rules of the road. If not, other governments will forge ahead, and U.S. businesses, workers, and consumers risk falling behind.

Governments around the globe are moving quickly to pass regulations governing the digital economy. Scores of these policies create de facto trade barriers that are counterproductive to dynamic growth and the creation of good jobs. Many do not include flexibility to account for the evolution in the digital economy, potentially stifling innovation. Others unfairly discriminate against successful technology companies. Regulations with these provisions will result in unintended consequences and long-run harm to local economies, yet governments continue to put forth proposals at a prolific pace.

At the same time, some countries have continued to move forward on digital trade. Singapore has signed a digital economy framework with Chile and New Zealand, the Digital Economy Partnership Agreement (DEPA), as well as one Australia. Both frameworks build upon rules in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), an 11-member trade agreement from which the U.S. withdrew in 2017. China, which has also enacted protectionist digital policies, has since requested to join both DEPA and CPTPP. None of these pacts’ provisions measure up to the high-standard digital commitments the U.S. boasts in its agreements with Canada and Mexico or Japan. Yet the global standard-setting is happening elsewhere — and the U.S. isn’t at the table.

A digital trade agreement is an opportunity to negotiate binding commitments in a number of areas that support a growing, innovative, and competitive global digital economy. The U.S. Chamber’s Digital Trade Priorities lay out widely supported principles that should guide the negotiation of such an agreement. The priorities address growing concerns in the global trade and regulatory environment. They emphasize the importance of the use and transfer of data, which underpins all activities in the digital economy. They also stress the foundational importance of non-discrimination, including through technology choice provisions and bans on forced localization or technology transfers. Other principles highlight the role of intellectual property, customs, and trade facilitation in digital trade.

The U.S. must take a proactive approach in facilitating dialogue on these issues and actively participating in negotiations with trading partners. Doing so will ensure governments adhere to high-standard digital trade commitments. A prosperous digital economy will drive growth and dynamism in all industries. The time is now for the U.S. to lead on digital trade.