Today, I testified before the US Trade Representative (USTR) on the need to include strong digital trade provisions in a US-EU trade agreement. The hearing examined US industry priorities to help inform the objectives for the upcoming trade negotiations.
The United States and the European Union share an impressive $1 trillion trading relationship and make up nearly half of global GDP. In 2016 alone, the United States had a $55 billion services trade surplus with the EU – driven by US and EU investment in the data economy and robust bilateral trade. This negotiation presents an enormous opportunity for the United States and European Union to solidify a strong transatlantic partnership and more closely align their economies in relation to digital trade by including provisions consistent with BSA’s Digital Trade Agenda.
The United States and the European Union share common economic interests: both enjoy a competitive advantage in emerging technologies, an interest in combatting digital protectionist policies abroad, and a desire to continue leading and benefiting from the digital economy. The European Union has included a number of digital trade provisions in previous free trade agreements (FTAs) that correspond to the digital trade provisions in US FTAs. These provisions, which would provide common ground for US-EU digital trade negotiation, address
- The protection of source code from mandatory disclosure requirements;
- The use of electronic signatures in commercial transactions;
- The prohibition of preferential treatment for state-owned enterprises;
- The prohibition of customs duties on electronic transmissions; and
- Consumer choice of digital services and applications.
We also urge USTR to negotiate provisions that enhance legal certainty for US businesses in the European Union and address trade and market access challenges reflected in our 2018 NTE submission. USTR should work to proactively address these challenges by working with the EU to include strong digital trade disciplines that:
- Obligate the Parties to permit the cross-border transfer of data while protecting personal information;
- Prohibit data localization requirements;
- Promote the use of innovative technology in the public sector;
- Support encryption in commercial products;
- Protect intellectual property while including appropriate exceptions and safeguards; and
- Promote interoperability through adherence to internationally-recognized standards relating to digital technologies.
Removing market access barriers for software, and incorporating the other regulatory protections described above, will enable this growing and dynamic sector of the US economy to expand its reach in the European Union; contribute to an already favorable US service trade surplus; and continue to generate new jobs in the United States.
BSA appreciates the US government’s leadership on digital trade and looks forward to working with USTR on this critical issue.
