Data, Global Markets

Future of Trade Hides in Plain Sight in Vietnam Deals

If you saw the headlines out of last week’s meeting between President Trump and Vietnamese Prime Minister Nguyen Xuan Phuc, you’re aware of the major deals announced with US manufacturers GE and Caterpillar – deals worth an estimated $8 billion dollars for jet engines, windmills, and construction equipment.

What is less apparent, though, is how those deals demonstrate the importance of allowing data, and not just goods, to move across borders – and how we need trade deals to reflect that fact.

As President Trump noted of the Vietnam deals, “They just made a very large order in the United States – and we appreciate that – for many billions of dollars, which means jobs for the United States and great, great equipment for Vietnam.”

Hearing that, it’s easy to imagine the ships full of US-made machinery headed across the Pacific Ocean and the resulting jobs here in the United States. But if you take a closer look at the full scale of these trade deals, you’ll see that those US companies are doing much more than simply selling goods. They’re selling the kind of high-tech services more often associated with the software industry.

Caterpillar, for example, touted the sales of “technology-enabled management solutions” that will accompany the equipment and will drive customer benefits and savings through decreased downtime, better fuel efficiency, and other features.

What lies at the heart of those technological solutions? Data. And what will help Caterpillar’s customers derive those benefits? Their ability to send that data freely across borders for analysis and further insights.

Digital trade, of course, is not a one-way street. Vietnamese companies and consumers will gain by leveraging the power of global software solutions and will have the opportunity to leapfrog many of the challenging problems that confront developing economies. This will require that the local laws and regulations enable the data economy as well. BSA works with leaders around the world to shape a cloud-ready policy environment.  In fact, BSA’s Senior Director for APAC Policy, Jared Ragland, was in Hanoi last week to meet with government officials to discuss how best to achieve that goal.

Here in the United States, those deals will be supported by the software industry – an industry that supports nearly 10 million US jobs and has a trillion-dollar economic impact.

This is why BSA | The Software Alliance supported the data provisions of the proposed Trans Pacific Partnership, and it is why we are now urging the Trump Administration to ensure that any future trade negotiation includes 21st century protections for digital trade.

The first such opportunity will be the Administration’s efforts to modernize the North American Free Trade Agreement, and the foremost principle of the new NAFTA should be: no market access barriers and discrimination against innovative software services.

Ensuring that the new NAFTA and other trade agreements include protections for digital trade and services will ensure that those deals drive US job creation, competitiveness, and innovation.

Referenced Resources:

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