Industry Slams NTE Digital Drawback
U.S. tech companies and industry associations are ripping into USTR after the agency did not deny reports that it is scaling back references to digital trade in the annual National Trade Estimate on Foreign Trade Barriers due at the end of the month.
“By statute, the NTE is intended to identify significant barriers to trade. But over the years, it has evolved into a mechanism for our biggest corporate stakeholders to list any government action that they didn’t like,” a spokesperson for USTR said Wednesday.
They added that under the Biden administration "the threshold for inclusion in the NTE is whether an issue is an effort to regulate in the public interest, and if not, whether that issue is a significant trade barrier, which applies equally to digital trade-related issues.”
Backstory: John Murphy, senior vice president for international affairs at the U.S. Chamber of Commerce, kicked off the storm when he posted on X that USTR is “scrubbing the annual NTE to cut references to foreign digital trade barriers and instances of digital discrimination against U.S. firms.”
"If true, it's another damaging retreat — and a threat to the 3m Americans whose jobs depend on digital trade," Murphy added.
A person close to the administration, who spoke on condition of anonymity to discuss administration deliberations, confirmed the new language, and noted that USTR Katherine Tai had signaled a new approach to the issue as far back as a November 2021 speech on digital trade.
Nigel Cory, associate director for trade policy at the Information Technology and Innovation Foundation, pushed back on USTR’s response in remarks to Morning Trade and said “contrary to USTR’s framing, data localization’s central role in digital protectionism is a real and growing issue.”
“China’s policies clearly contravene the letter and spirit of global trade rules, and by refraining from naming and shaming USTR effectively endorses their use of localization and other discriminatory digital policies,” Cory added.
Joining the rebuke: Matt Schruers, the president and CEO of the Computer and Communications Industry Association, which counts many large tech companies such as Google, Amazon and Meta as members, slammed the move as a “grave mistake” that would “signal surrender to the discrimination against U.S. services exports abroad.”
President and CEO of the Information Technology Industry Council Jason Oxman remarked that adversarial nations now have the “green light to introduce policies like forced data localization that blatantly discriminate against U.S. companies.”
For reference — the more than 450-page 2023 report contained the word digital 170 times and also listed digital trade and e-commerce as one of 14 areas of foreign trade barriers.
Reminder: The administration’s relationship with Big Tech has grown increasingly tense since the administration withdrew support for longstanding U.S. positions promoting free data flows and other digital trade provisions at the World Trade Organization last fall.
