Recommendations for a U.S.-Brazil Digital Trade Agreement

In the face of severe challenges stemming from the COVID-19 pandemic, the United States and Brazil are deepening their partnership, including through bilateral trade talks. The U.S. Chamber of Commerce and the Brazil-U.S. Business Council (U.S. Section) recommend that, in addition to discussions on good regulatory practices, trade facilitation, and anticorruption, the two governments pursue a digital trade agreement. Digital technologies are crucial in how policymakers, businesses, and consumers in both countries are adapting to and fighting the virus, and they are expected to continue to play a central role in the road to economic recovery.

An ambitious agreement will support the digital economy in both countries and serve as a milestone in the U.S.-Brazil relationship. It should be negotiated in a transparent fashion, in close consultation with the business community, and should accomplish the following:

1. Free flow of data

• Guarantee the free flow of data across borders and prohibit the forced localization of data and computing facilities, including in the financial services sector.

2. Protection of source code and algorithms

• Prohibit requirements to use local technology infrastructure or to transfer technology, intellectual property, production processes, or other proprietary information as a condition of market entry. This includes prohibiting requirements to transfer, or provide access to, a source code of software or an algorithm.

3. Tax, customs duties, and electronic payments

• Commit the two governments to reach a multilateral solution to tax challenges arising from the digitalization of the economy and prohibit discriminatory digital taxation measures that contravene international taxation principles.
• Prohibit customs duties on electronic transmissions, including information and data transmitted electronically.
• Promote the growth of electronic payment systems.

4. Non-Discriminatory treatment of digital products

• Prohibit less favorable treatment to digital products created, produced, published, contracted for, commissioned or first made available on commercial terms in the other’s territory, or to digital products of which the author, performer, producer, developer or owner is a person from the other party, than to that accorded to like digital products.

5. Cooperation in advancing digital trade

• Commit the two governments to advancing digital trade at the World Trade Organization, including through a high-standard agreement on e-commerce.

6. Protection of personal information

• Commit the two governments to maintaining a functioning authority or authorities for the protection of personal information in their respective jurisdictions.
• Ensure that frameworks and practices for the protection of personal information are non-discriminatory, enable cross-border data transfers, and account for principles and guidelines of relevant international bodies, such as the Organisation for Economic Co-operation and Development.
• Commit the two governments to promote interoperability between privacy regimes, including through the development and/or use of voluntary certifications and codes of conduct, model contracts, guidelines, and enforcement mechanisms.

7. Artificial intelligence

• Commit the two governments to promote artificial intelligence and machine learning technologies through good regulatory practices, including risk-based, outcome-focused, technology-neutral, and sector-specific approaches to AI governance that are sufficiently flexible to account for new opportunities and challenges and that recognize the extent to which potential risks can be mitigated by existing regulatory frameworks.

8. Cybersecurity

• Recognize the importance of risk-based approaches to cybersecurity and commit both governments to regular consultations, in partnership with the private sector.

9. Online platforms

• Prohibit requirements for digital platform companies to have a local subsidiary as a condition to perform activities.
• Provide protections for online platforms and marketplaces to host lawful speech and commerce without being treated as the originators of content.

10. Open government data

• Acknowledge that facilitating public access to and use of government information fosters economic development, competitiveness, and innovation.

11. Multi-stakeholder model for internet governance

• Commit the two governments to take proactive and coordinated leadership roles to promote a multi-stakeholder model for internet governance, privacy, cross-border data transfers, and cybersecurity around the world and across Latin America.

12. Good regulatory practices

• Commit the two governments to follow good regulatory practices with regard to the digital economy, including evaluating whether regulation is truly necessary, providing for sufficient advance notice and comment period alongside in-depth consultations that include both domestic and foreign stakeholders.

To learn more about U.S.-Brazil trade relations visit here.

About the authors

Renata Brandão Vasconcellos

Renata Brandão Vasconcellos iis the former Executive Director, Americas at the U.S. Chamber of Commerce. She leads the US-Cuba Business Council and is also responsible for most of the policy agendas of the Brazil-US Business Council.

Evangelos Razis

Evangelos Razis is former Director at the U.S. Chamber of Commerce’s Center for Global Regulatory Cooperation.