Finance Committee Chairman Opposes USTR Position on Digital Trade
When the U.S. ambassador to the World Trade Organization said the U.S. was no longer arguing that data localization is a violation of trade rules, and is no longer pushing for open data flows, blowback in the U.S. was immediate, and not just from industry interests who want the right to protect source codes and want the ability to transfer data across borders freely.
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In a news release that began "Senate Finance Committee Chairman Ron Wyden blasted the Office of the U.S. Trade Representative’s decision today to abandon support for key digital trade principles," Wyden, D-Ore., said USTR changed course "with virtually zero consultation with Congress or the Finance Committee," and that USTR is acting contrary to what Congress told it to do with regard to digital trade.
“USTR’s decision to walk away from the negotiating table in Geneva is a win for China, plain and simple,” Wyden said in the release. “In addition to abandoning our democratic allies in these negotiations, USTR is leaving a vacuum that China -- an active participant in these negotiations -- will be more than pleased to fill. USTR’s action today is a win for the Chinese government’s efforts to have unlimited access to U.S. data, a win for Chinese tech giants who want to bully smaller countries into following the Chinese model of internet censorship, and a win for China’s Great Firewall, which locks out American companies and locks Chinese citizens into a repressive regime of government surveillance.
“USTR’s unilateral decision to abandon any leverage against China’s digital expansionism, and to oppose policies championed by allies like Australia, Japan, the U.K. and [South] Korea, directly contradicts its mission as delegated by Congress. It may be time to reconsider the degree of that delegation going forward."
The statement in Geneva was not posted on the USTR or the WTO mission website, but its outlines were first reported by Inside U.S. Trade on Oct. 24.
A USTR spokesperson defended the position, saying, “Many countries, including the United States, are examining their approaches to data and source code, and the impact of trade rules in these areas. In order to provide enough policy space for those debates to unfold, the United States has removed its support for proposals that might prejudice or hinder those domestic policy considerations."
National Foreign Trade Council President Jake Colvin said, "It's astonishing to see the United States essentially abdicate its leadership role in writing the digital rules for the global economy and preventing illegal trade discrimination and burdensome barriers against American interests."
He noted that members of Congress from both parties have been calling on the U.S. to do more to negotiate global digital trade standards. In an earlier blog post, where he responded to U.S. Trade Representative Katherine Tai's public comments, he criticized Tai's seeming sympathy for EU privacy laws.
Sen. Elizabeth Warren, D-Mass., has been arguing that digital trade negotiations in the Indo-Pacific Economic Framework is a give-away to big tech, and could make it impossible for Congress to legislate on privacy.
"Big Tech is pushing for trade rules that would allow Americans’ sensitive personal data to be sent anywhere -- with little ability for Congress to limit such transfers or require that critical data be kept in the U.S. While seemingly innocuous, this means that sensitive medical records, business secrets, or critical national security information could be sent and stored anywhere in the world. This only benefits Big Tech firms seeking unlimited control over our sensitive, personal data," she wrote in April.