WTO: US Digital Trade Cave Criticized

A bipartisan group of 32 senators – including the Senate Finance Committee leaders – is calling on President Biden to reversing a decision to drop long-standing US positions at the World Trade Organization on digital trade.

The US Trade Representative’s Office recently pulled back from supporting provisions on the free flow of data across borders and prohibiting forced localization of data as part of ongoing e- commerce negotiations at the WTO.

“Retreating from our longstanding principles without offering a viable alternative does not help US workers, it does not help US consumers, it does not help US businesses, and it does not help
US allies; it only helps our adversaries,” the senators wrote in a letter to President Biden.

The US decision to reverse its policy shocked other WTO members, Congressional lawmakers and the US industry. 

“These commitments reflect bipartisan principles that, until now, the United States has strongly supported across political parties, administrations, and the federal government: an open internet that promotes the flow of information across borders to support American exports and American values,” the senators wrote.

“USTR’s decision to abandon these commitments at the WTO creates a policy vacuum that China and Russia will fill.”

No Alternatives Offered

The senators complained that USTR has offered no policy alternatives to the long-standing US positions, which have bipartisan support.

“We are concerned that USTR’s retreat will hurt workers and employers across all sectors of the U.S. economy, with disproportionate effects on small and medium-sized businesses in creative industries like film, music, and book publishing; innovative industries like software, medical devices, and precision agriculture; travel, tourism, and transportation; logistics, shipping, and supply chain management; and manufacturing, including the critical automotive and semiconductor sectors,” the senators wrote.

The senators noted there is strong interest in the digital regulation space, particularly with the rapid adoption of artificial intelligence technology. “We welcome discussions and debate on the best way to protect consumers, promote privacy, and ensure a competitive marketplace. However, these efforts do not require the United States to walk away from negotiating strong rules at the WTO that support US businesses and workers – nor would these rules constrain the laws.”

The lawmakers urged President Biden to hold a consultation process before making this change in US policy permanent.

The text of the letter is here.