At a September 20 hearing of the House of Ways & Means Trade Subcommittee, Democratic and Republican lawmakers joined with business and civil society leaders in voicing support for strong digital trade rules to protect American companies and innovators. In fact, the 2023 U.S. withdrawal from the World Trade Organization (WTO)’s digital trade negotiations drew bipartisan condemnation.
Bipartisan Agreement: As detailed in the U.S. Chamber of Commerce’s report The Digital Trade Revolution: How U.S. Workers and Companies Benefit from Digital Trade, digital trade directly supports more than three million U.S. jobs in a variety of sectors and adds over $2.6 trillion to the U.S. economy annually.
However, the Office of the United States Trade Representative (USTR) has undermined American leadership on digital trade and threatened the continued success of U.S. businesses and the workers they employ by rescinding support for digital trade rules that have strong bipartisan backing, as members from both parties and witnesses emphasized at the hearing.
- Subcommittee Chair Adrian Smith (R-NE): “A recent poll found 86% of American voters believe it’s important for the U.S. to lead in writing global rules for technology. Yet, where we should be leading on technology rules, America is retreating. Where we should be arguing for our values in the face of digital authoritarians, we are silent. And where we should be working with allies, we are leaving like-minded partners out to dry. Even more concerning it has been almost a year since USTR announced this policy change, yet the administration has gone radio silent on what our digital trade policy should look like.”
- Rep. Brad Schneider (D-IL): “Just in Illinois, my state, the digital economy supports more than 300,000 jobs and represents nearly $3.7 billion in digital exports. The digital economy is an important part of our trade infrastructure, and the United States must remain the leader when writing the rules of the road for the future of digital trade.... The U.S. must ensure that competing proposals that impact the digital economy do not undermine American workers, American businesses, or American national security. We cannot cede ground to our adversaries on digital trade. Instead, we should lead the way on global technology advancement.”
- Rep. Darin LaHood (R-IL): “In our increasingly interconnected world, the trade of digital goods and services is essential for American growth, innovation, and global leadership. Digital trade is more than buying and selling of goods online. It encompasses a global flow of data, ideas, and talent. In 2022, digital trade encompassed more than $2.5 trillion of U.S. economic activity and represents the fastest growing segment of global trade. As the Co-Chair of the Digital Trade Caucus here in Congress, I’m increasingly concerned about the proliferation of restrictive and often times discriminatory digital regulatory frameworks and laws which risk curtailing American digital competitiveness.... In my view, efforts to regulate these American companies can and will lead to a chilling effect, discouraging further U.S. investment in Europe.”
- Rep. Suzan DelBene (D-WA): “If we step back from the negotiating table until Congress acts, we run a serious risk of harming the very objectives such as defending American companies, protecting privacy, and supporting a free and open internet that have been core to U.S. policy for many years.”
- Rep. Ron Estes (R-KS): “Policies that hurt innovation hurt all Americans because they slow the economy, reduce jobs, and give foreign adversaries a competitive advantage. Another major area of concern, as we’ve talked about before, is the digital services taxes, DSTs. We witness countries like France and Canada specifically target U.S. companies to fill their coffers with these disastrous extraterritorial taxes. One company I talked to used the phrase, ‘It’s a bold grab of U.S. money.’ And it’s costing Americans billions of dollars.”
Civil society and business leaders testifying in the hearing drove home the point that ceding ground on digital trade gives an advantage to America’s adversaries:
- Adrian Shahbaz, Vice President of Research and Analysis, Freedom House: “We expressed concern one year ago when the United States Trade Representative dropped support for cross-border data flows at the World Trade Organization. The decision risks further fragmenting the global internet and emboldening by authoritarian governments.”
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Dr. Robert D. Atkinson, Founder and President, Information Technology and Innovation Foundation: “What’s undeniable is that the U.S. leads in this sector. We have 37% of global market share in the IT and information services market, and it’s an incredibly valuable market.… If we don’t take stronger action, we’re going to lose this sector, and we’re going to lose the jobs and the revenue and the exports that come with it.”
- Evangelos Razis, Senior Manager, Workday: “At a time when discriminatory and arbitrary trade barriers are erected in the name of privacy, cybersecurity, and other policy aims, a U.S. vision for cultivating a trustworthy and open digital economy is needed. Without high-standard digital trade rules, the U.S. loses a key avenue for promoting its values and interests abroad, including the interests of U.S. digital services exporters and the millions of workers they employ.”
