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Business Groups Urge Action Against “Digital Protectionism”

Monday, November 07, 2011
Sandler, Travis & Rosenberg Trade Report

A group of business organizations released last week a list of actions the U.S. government should pursue as part of an effort to modernize international rules and practices governing cross-border flows of data and information technologies. A position paper from the group states that “the movement of electronic information across borders is critical to businesses around the world, but the international rules governing flows of digital goods, services, data and infrastructure are incomplete.” As a result, “digital protectionism is a growing threat,” and “a number of countries have already enacted or are pursuing restrictive policies governing the provision of digital commercial and financial services, technology products, or the treatment of information to favor domestic interests over international competition.”

The paper calls on the U.S. government to seek international commitments on several key objectives: prohibiting measures that restrict legitimate cross‐border data flows or link commercial benefit to local investment; resolving emerging legal and policy issues involving the digital economy such as openness, security, privacy and jurisdiction; promoting industry-driven international standards, technical regulations and best practices; expanding trade in digital goods, services and infrastructure; and ensuring that trade agreements are negotiated on a “negative list” basis so that they cover digital technologies that may be developed in the future.

The paper adds that U.S. negotiators should pursue these issues in a variety of forums around the world, including the World Trade Organization, the Asia-Pacific Economic Cooperation forum, the Organization for Economic Cooperation and Development, and bilateral and regional free trade agreement negotiations. The U.S. should also begin to develop a “modern framework for rules governing goods and services market access, e‐commerce, transparency, government procurement and cyber‐security” that would “set a new global gold standard to which countries could subscribe.” Finally, the U.S. should identify and seek to resolve through WTO or bilateral consultations or other processes violations of current international rules concerning digital goods, services and information.

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