Washington – Last year the agency charged by Congress with enforcing U.S. trade agreements and protecting U.S. exports and jobs announced it was standing down on a range of digital trade issues, in deference to foreign countries’ purported need for “policy space.” Other nations routinely target U.S. exports with discriminatory laws and regulations, and trade officials have historically fought those – rather than volunteer to step aside to make room for that conduct.
Now, a news story in Politico says the Office of the U.S. Trade Rep. may further abdicate its statutory mission by reducing the emphasis on digital trade barriers in its annual “National Trade Estimate” (NTE) report that Congress requires.
According to news reports, USTR’s forthcoming NTE report on trade barriers will downplay the proliferation of digital trade barriers. If this is the case, it would be an historic break with U.S. trade policy that focuses on promoting the U.S. economy and jobs and would directly contradict the federal law that directs USTR to “identify and analyze acts, policies, or practices of each foreign country which constitute significant barriers to, or distortions of…United States electronic commerce.”
Digital trade has been the fastest growing area of trade in services and one of the U.S.’s leading exports. Through sales abroad, U.S. digital exporters brought in $626 billion from digitally-enabled services exports in 2022, representing 2.5% of U.S. GDP and a 70% share of all U.S. services exports.
The Computer & Communications Industry Association has advocated for U.S. tech companies’ trade exports for more than 50 years.
The following can be attributed to CCIA President & CEO Matt Schruers:
“It has been troubling to watch USTR stand down in the face of widespread discrimination against U.S. commerce in the digital space. USTR is charged by Congress with protecting U.S. economic interests and jobs. To abdicate that responsibility so as to allow foreign states ‘policy space’ invites hostility against not only in the tech sector, but all goods and services that rely on digital technologies.”
“If true, this would be a grave mistake and signal surrender to the discrimination against U.S. services exports abroad. Given Congress’s direction, trade officials are not permitted to unilaterally disarm in the fight for American jobs.”
Additional background information:
Over two decades ago, the U.S. Congress, instructed the Executive Branch to pursue the U.S. interest in expanding trade in one specific area where the U.S. excelled:
“Negotiating Objectives.–The negotiating objectives of the United States shall be–
(1) to assure that electronic commerce is free from–
(A) tariff and nontariff barriers;
(B) burdensome and discriminatory regulation and standards; and
(C) discriminatory taxation; “
These goals are also memorialized in Amendments to the 1974 Trade Act, requiring USTR to specifically identify such barriers in its annual report.