Digital Protectionism, Amid U.S. Surveillance Revelations, Feared by Panelists
The rise of international digital protectionism and insufficient digital trade disciplines in global trade pacts are preventing benefits associated with the free flow of information, said international experts on Monday. While Trans-Pacific Partnership negotiations remain opaque and unresolved, TPP has the potential to include the most progressive digital trade language ever, they said on a George Washington University Institute for International Economic Policy panel. U.S. trade officials continue to target TPP negotiation conclusion by year’s end. Due to the ongoing government shutdown, President Barack Obama was unable to attend a TPP negotiation round this week (CD Oct 7 p11) on the sidelines of the Asia-Pacific Economic Cooperation summit in Bali, opting to send Secretary of State John Kerry in his place. International Trade Commission analyst Martha Lawless couldn’t attend and participate on Monday’s GWU panel due to the partial government shutdown.
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A “robust e-commerce chapter that guarantees the flows of information” across borders “while protecting legitimate interests like privacy” would be good to see in coming trade accords, said Jake Colvin, National Foreign Trade Council vice president-global trade issues. TPP should also include intellectual property protection, he said. “We would like to see no local server requirements to do business and to be able to send information across borders.”
The disclosure of National Security Agency surveillance revelations by Edward Snowden this summer is encouraging national governments to adopt protectionist policies toward data flow, said panelists. The Brazilian government is pushing policies that will scale back its Internet exposure to all other countries, said panel moderator and Software and Information Industry Association Vice President-Public Policy Mark MacCarthy. In September, Brazilian President Dilma Rousseff cancelled a diplomatic visit to the U.S. in protest over the surveillance revelations. The move to restrict Internet data flows is one example of a broad international response that threatens to curb the economic development benefits channeled through the Web, said MacCarthy. “We are seeing, in a number of jurisdictions, the tendency for countries to look at information and data as something that needs to be protected and preserved, to be protected within national boundaries for a variety of reasons.” Protection against government surveillance of foreign countries, “the development of internal data processing resources and other public policy issues” need “to be taken into account and considered as we look at the flow of information across borders,” said MacCarthy.
European governments have also responded to the surveillance revelations with dismay, said panelists. They said some of those nations are choosing to address the issue through Transatlantic Trade and Investment Partnership (TTIP) negotiations. The revelations about the NSA have caused debate over privacy frameworks in TTIP. The U.S.-EU pact would potentially cover half of global GDP and 30 percent of world trade, but negotiations remain in the rudimentary stages.
"Traditional trade barriers need to be addressed in a digital world,” said Swedish Minister Counselor Andreas von Uexkull. It’s “vital” the TTIP “also eliminate barriers to e-commerce” and online services, he said. “The aim should be to establish a transatlantic online digital market without borders.” It “would be devastating if we would get stuck on this issue, not being able to move a TTIP agreement that is broad and would start to open up our markets,” said von Uexkull. “I see a lot of dangers by not putting that issue on the sidelines.”
The U.S. and EU should avoid harmonizing privacy policies in TTIP to steer clear of conflict, said MacCarthy. The privacy framework is the “elephant in the room” that will need to be tackled, said Colvin. Other countries are also pushing localization policies to preserve state-owned enterprises, and such policies shouldn’t be accepted in trade pacts, he said. “You also see localization requirements that are done often to protect local monopolies,” said Colvin. “Ethiopia, I believe, last year criminalized the use of Skype to protect its national carrier. That sort of thing should be the first to go.” Ethiopia has dismissed such accusations.
The free flow of information across international borders democratizes access, enables the growth of innovative business models and builds trust among people separated by significant distances, said panelists. “With digitization, global marketplaces are bigger,” said von Uexkull, citing eBay and smartphone apps. The free flow of digital information opens the door for more small- and mid-sized enterprises and even one-person firms that reach a global marketplace instantly, he said. “We call these companies micro multinationals.”