Keith Chu (202) 224-4515
Wyden Remarks on U.S. Digital Trade Policy at the Internet Association
As Prepared for Delivery
It’s been a few years since I last had the opportunity to speak to this group. Back then, in 2017, the president had just notified Congress of his intent to renegotiate NAFTA. I saw it as a big chance to bring NAFTA into the 21st century.
Now I am here at another inflection point on digital trade. On one hand, this is a time of unprecedented opportunities to create strong rules of the road on digital trade around the world. But on the other hand, authoritarian regimes are working to shatter the internet into country-sized pieces out of economic protectionism or political control over their own citizens.
Before I get into our challenges and opportunities on digital trade, I think we should go to the Wayback Machine for a few minutes.
In the mid-1990s, policymakers like myself were really awestruck with the types of opportunities the internet held -- potential connections for speech, collaboration and commerce.
So, on a bipartisan basis, the Congress passed laws around a few key priorities: ensuring that this new technology would not get crushed by taxes, tariffs and frivolous litigation. Providing legal parity to what was done digitally versus physically.
This legal framework is what allowed the first big internet platforms to get off the ground. It’s still in place today, and it still helps to maintain a low barrier to entry for innovators with big ideas.
The internet works best when there’s a uniform set of rules governing it. That’s always been true, and I don’t believe it’ll change anytime soon. The rules the U.S. adopted starting decades ago were successful, so the U.S. has tried to export them. There’s been incremental progress for over 20 years at the World Trade Organization and in free trade agreements.
There was a big win in 2015, when Congress passed a law that said our trade negotiators have to seek to put our domestic digital policies into trade agreements. That resulted in a robust digital trade chapter in the Trans Pacific Partnership Agreement, or the TPP. While the U.S. is not currently part of the TPP, those digital obligations are still a part of the deal, and the rules apply to economies that represent 40 percent of the global economy.
Then there’s the new NAFTA. When the first NAFTA was negotiated, most American families didn’t have access to the internet at home. The first internet cafes were just popping up. People were only just beginning to understand the promise of the internet. Not just as a way to connect, but also as a way to do business.
Fast forward to 2017, when the internet facilitated a $159 billion trade surplus in digital products. Each year it enables nearly $100 billion in manufactured exports through online sales.
Anyone can be an exporter now -- not just big corporations with mass production, logistics departments and sales representatives visiting foreign countries.
The internet has opened up markets that owners of small- and medium-sized businesses could only have dreamed about a few decades ago. Global e-commerce is a $28 trillion business, and there’s no sign it’s going to slow significantly anytime soon.
Bottom line, digital trade is at the heart of our economy, so it needs to be at the heart of our trade agreements as well. Fortunately, the new NAFTA includes a lot of good news for participants in this modern economy.
First, the agreement lays out digital rules of the road to ensure that e-commerce and digital services don’t face unfair barriers to trade that impede the growth of the digital economy and the jobs it supports in the United States.
Second, it addresses many other trade topics -- from customs facilitation to safe harbors from copyright liability and content moderation -- that the digital economy and internet-enabled economy depend on. This opens the doors for small- and medium-sized internet-enabled businesses to enter new foreign markets.
And, finally, the new NAFTA includes key protections for a free and open internet -- an engine for spreading ideas and innovation which has fostered the United States’ leadership in tech.
The digital obligations in the new NAFTA should become the model for future agreements. And while the U.S. continues to fight for more progress, there are also new challenges to address.
For example, there has been a startling rise of protectionism and a retrenchment from the open internet on multiple fronts around the world. The number of countries that have adopted restrictive policies -- requiring data localization and prohibiting cross-border data flows -- is rapidly growing. Repressive regimes, such as those in China, Russia and Turkey, continue to stifle online commerce and speech in equal measure. They discriminate against U.S. businesses and keep their own people from accessing uncensored information. The European Union has broken new ground on targeting U.S. companies to protect its own industries from the inevitable changes of the online economy.
Even though these measures are often cloaked in arguments about cultural norms or national security, they are usually designed solely to handicap innovative American companies.
In the face of digital repression and protectionism, it is more important than ever for the United States to lead on safeguarding a free and open internet. The foundational internet policies the U.S. adopted decades ago work. That’s why the U.S. still leads when it comes to digital innovation, and it’s why the U.S. needs to keep up our efforts when it comes to the rules of the digital road.
There’s a lot of work to be done on this front. I’m going to keep at it here in Congress, and I look forward to working with all of you. Thank you again for having me here today.
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