Published
April 19, 2024
This week, U.S. Trade Representative (USTR) Katherine Tai appeared in front of the House Ways & Means and Senate Finance committees to answer questions regarding current U.S. trade policy. Of particular concern was the Biden administration’s decision to withdraw its support for digital trade rules, which has drawn the ire of many in Congress and is undermining U.S. industry.
What’s at stake: The U.S. Chamber of Commerce’s new Digital Trade Revolution report demonstrates how digital trade supports over 3 million U.S. jobs directly and indirectly. That’s why we’ve urged the Biden administration to restore U.S. leadership on digital trade.
Instead, the administration’s approach is putting at risk the ability of American companies—across industries and in every state—to spur growth and innovation at home and around the world.
Get informed: The U.S. Chamber recently transmitted a multi-association letter, signed by more than 40 organizations representing a broad cross-section of sectors, urging the Biden administration to restore U.S. digital trade leadership. Transmitted ahead of Ambassador Tai's hearings this week with the House Ways and Means and Senate Finance committees, the letter outlines the business community's significant concerns with USTR's policy shifts. It “sets the record straight” on why strong digital trade protections are critical to firms of all sizes and sectors.
What Congress Is Saying
Here’s how both Republicans and Democrats in the House and Senate echoed these concerns in this week’s hearings:
U.S. Senate Finance Committee Chairman Ron Wyden (D-OR): “The United States needs to be a leader in setting the rules of the road for digital trade so our creators and innovators get a fair shake in foreign markets … we must also push for digital trade rules that will protect the free and open internet, help small businesses, and push back on China’s model of digital surveillance and censorship.”
U.S. House Way & Means Chairman Jason Smith (R-MO): “The United States should not sit idly by while our workers and companies are taken advantage of … Unfortunately, it is clear the Biden Administration’s focus has been misplaced. Rather than work to deliver for American workers, farmers, and small businesses, the Administration … surrenders U.S. leadership on priorities like digital trade.”
U.S. Senate Finance Committee Ranking Member Mike Crapo (R-ID): “United States manufacturing, innovation, creative, and tech industries are second to none. If the Administration will not negotiate tariffs, it should at least help workers in these industries by negotiating critical rules on technical barriers to trade, intellectual property, and key digital trade provisions such as on non-discrimination and free data flows. Thus far, USTR has failed to do so in any of the so-called framework negotiations—and the trade agenda indicates this will continue. This benefits China, which is aggressively participating in international standards-setting bodies, pushing technology transfer and supporting data localization by countries.”
U.S. Senate Finance Trade Subcommittee Chair Tom Carper (D-DE): “In February this year, the American Civil Liberties Union, along with Freedom House and a number of other advocacy groups as well as academics, sent a letter expressing concern with the United States decision to withdraw from the key digital commitments at the World Trade Organization. That letter outlines the impact of digital trade across sectors and the importance of ensuring that the United States has a seat at the table in order to help write the rules of the road both for creators and small and medium-sized businesses that must adapt to the changing digital landscape.”
U.S. Sen. John Thune (R-SD): “It seems like we have abdicated our role as a leader when it comes to digital trade, very quickly allowing China to step into the gap.”
U.S. Sen. Todd Young (R-IN): “I happen to believe and I think our committee has demonstrated on a broadly bipartisan basis that digital trade is increasingly important to our country. At this moment in history, however, our government has not acted as though it’s as important as this committee seems to believe. Under your leadership, USTR is diminishing our role in defending open digital trade rules, to put it pointedly.”
U.S. Sen. Chuck Grassley (R-IA): “Our competitors repeatedly seek to discriminate against U.S. companies and impede access to their markets. Yet, the Biden administration has pulled back from negotiations on digital service trades and rejected long-term, long-held bipartisan principles against discriminatory practices of our partners. USTR has abdicated its leadership role in this important issue. Why is USTR allowing other countries to set the rules that will put American companies at a disadvantage?”
U.S. Rep. Darin LaHood (R-IL): “This administration sends mixed messages on the global stage by walking back long-held bipartisan digital trade proposals outlined at the World Trade Organization without clearly articulating a policy path forward. Last November, Congresswoman DelBene and I led a co-lead bipartisan letter along with 36 House colleagues to you underscoring how your decision threatens American leadership and ultimately harms American businesses and workers.”
U.S. Rep. Suzan DelBene (D-WA): “I do worry we're not doing enough to negotiate trade rules that are commercially meaningful, enforceable, supported by Congress, and reflective of the modern-day challenges we face as a nation.”
U.S. Rep. Brian Fitzpatrick (R-PA): “U.S. digital trade policy has consistently been a bipartisan issue in this chamber and in this Congress and the Congress remains committed to supporting the promotion of digital trade and the removal for foreign barriers to digital trade that directly harm our companies right here in the United States. Moreover, digital trade bolsters American leadership and encourages innovation and levels the playing field for U.S.-based companies and workers competing against foreign businesses while also promoting democracy abroad. Ambassador Tai, last year your office made the unilateral decision to withdraw support of the WTO’s digital trade principles. I believe this to be an unfortunate decision…it allows communist China to have more of a say over the global rules of the road for internet, for e-commerce and cross-border data rules and information access.”
U.S. Rep. Kevin Hern (R-OK): In an increasingly interconnected global community, access to free digital trade is critical to U.S. economic growth and innovation and preventing digital trade barriers has historically always been bipartisan... USTR has continuously failed to protect digital trade.”
U.S. Rep. Ron Estes (R-KS): “USTR has failed to insist on safeguards for digital trade, which will result in a loss of U.S. tax revenue to other countries. By acquiescing to forced tech transfers, localized operations, and data localization, the administration's consenting to WTO proposals that will send U.S. jobs and IP to foreign jurisdictions, decreasing our tax base.”
The Bottom Line
There is broad agreement: The USTR’s current approach to digital trade is putting U.S. leadership and jobs at risk. It is past time for a course correction that puts American companies and the workers they employ at the center of our trade policy.
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About the authors
John G. Murphy
John Murphy directs the U.S. Chamber’s advocacy relating to international trade and investment policy and regularly represents the Chamber before Congress, the administration, foreign governments, and the World Trade Organization.
