USTR “Misguided” in Scaling Back Digital Trade Barriers in the National Trade Estimate, Says ITIF

WASHINGTON—Following a news report that the Office of the U.S. Trade Representative plans to scale back references to digital trade barriers in its upcoming National Trade Estimate on Foreign Trade Barriers, the Information Technology and Innovation Foundation (ITIF) released the following statement from Nigel Cory, ITIF’s associate director of trade policy:

It would be deeply disappointing and highly misguided for USTR Tai and her office to remove or water down National Trade Estimate reporting on digital trade barriers, which are spreading globally at great cost to the economy. The evidence is clear that when countries enact digital trade barriers such as data-localization policies, they are responsible for measurably reducing trade, slowing productivity, and increasing prices for affected industries and consumers. Instead of letting them off the hook, USTR needs to name and shame them in the NTE.

Removing or watering down digital trade barriers would contravene the legislative requirements for the NTE. More broadly, it would be the latest in a series of steps USTR has taken that raise concerns about America’s approach to data flows and a free and open Internet. Last fall, USTR withdrew digital trade priorities from WTO negotiations. More recently, President Biden’s executive order to protect Americans’ sensitive personal data from foreign adversaries risks sweeping in legitimate economic activity. And now this.

Dropping digital trade barriers from the NTE would be another data point in a trend of receding U.S. leadership. China would be a beneficiary, because this creates an opening to advocate for its preferred restrictive and protectionist approach to data flows and digital trade.