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Tech giants play too big a role in US Indo-Pacific trade talks, critics say

Bloomberg | 10 July 2023

Tech giants play too big a role in US Indo-Pacific trade talks, critics say

By Emily Birnbaum and Eric Martin

Technology giants are drawing protests as they aggressively try to shape a new US trade deal with Australia, South Korea and other members of the Indo-Pacific region that account for 40% of global economic output.

Activists, alarmed by the involvement of corporations in drafting the Indo-Pacific Economic Framework, have started a campaign to limit their role in writing the digital chapter of the new trade pact. Some are worried that the companies will use the agreement as a back-door way to head off domestic regulation and enforcement of antitrust laws.

They are stepping up that campaign as the trade negotiators convene for their fourth round of negotiations in Busan, South Korea this week.

When talks were held in Australia in November, Alphabet Inc.’s Google and IBM Corp. co-hosted an invitation-only reception for negotiators. In the Singapore round in May, which was supposed to be mostly closed to outside stakeholders, sessions began late one morning because of a breakfast hosted by the tech industry. Elsewhere in the bustling conference center, a “war room” was run by the US Chamber of Commerce.

“Just like in past international trade agreements, Big Tech companies are swooping in to make sure they get carve outs,” said Maria Langholz, communications director with the left-leaning advocacy group Demand Progress. The firms, she said, want to “continue to enrich themselves through their anticompetitive behavior.”

The tech giants have been active in conversations with government officials: 34 of the 40 stakeholders who gave presentations in Singapore represented corporations or their groups, most of which had ties to tech, according to people familiar with the matter who requested anonymity to discuss confidential talks.

“We have very publicly advocated for the Indo-Pacific Economic Framework to include strong digital trade provisions that ensure digital technologies are widely accessible, and that support privacy, security, and trust in cross-border data flows” said Google spokesman José Castañeda.

A US Trade Representative’s office spokesperson said the US recognizes that it is costly for groups to fly out to the foreign locations where the talks are held, so USTR holds regular listening sessions about the trade talks in Washington. The spokesperson denied that the Singapore session started late because of the breakfast, saying other meetings ran long.

IBM didn’t respond to a request for comment.

Senator Elizabeth Warren, a Massachusetts Democrat, told Bloomberg News that she has “concerns that the industry is trying to use IPEF as an end run around facing meaningful regulation here or in other countries.”

Trade Representative

Although trade policy has typically been dominated by corporations, US Trade Representative Katherine Tai has argued that it’s time to disentangle trade from the interests of big business, and particularly tech.

Sam Michel, a spokesman for Tai, defended the role of the companies and said the final agreement will make the interests of workers a priority.

“As with all trade negotiations, USTR seeks input from a broad range of stakeholders and consults closely with members of Congress,” Michel said. “Their input guides the development of IPEF text, including the digital trade chapter. We are confident that the final IPEF agreement will align with President Biden and Ambassador Tai’s vision for a worker-centered trade policy.”

A USTR spokesperson added that Tai has been receptive to the feedback, and has talked to Warren about the issue several times.

The companies say robust digital rules will protect industries beyond tech. They’ve been pushing for IPEF to include provisions identical to digital trade sections of the US-Mexico-Canada Agreement. Some technology lobbyists privately say they are pushing for “USMCA plus” or “USMCA minus.” They argue those provisions support typical trade priorities, such as protecting American companies.

“This not about helping the largest firms or benefiting technology companies, but rather ensuring a regulatory environment among key trading partners that empowers a wide variety of businesses as most rely on digital services and tools to compete globally,” said Jonathan McHale, the vice president of digital trade for the Computer and Communications Industry Association, a trade group that counts Inc., Google, and Meta Platforms Inc. as members.

TPP Replacement

The Indo-Pacific Economic Framework is envisioned as a way to curb China’s trade influence in Asia. It’s a replacement for the Trans-Pacific Partnership, which the US withdrew from under President Donald Trump. President Joe Biden did not rejoin a successor agreement. The framework has 14 members: the US, Australia, Brunei, India, Fiji, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam.

Negotiations have been underway for about six months and the fourth round is scheduled for July 9-15 in Busan, South Korea.

The anxiety centers mainly on IPEF’s digital trade chapter. An initial version of the chapter proposed by the US would have effectively stymied any efforts by the countries to regulate the tech companies, according to people familiar with the initial proposal.

Echoing language in the US pact with Mexico and Canada, the US proposal included provisions that would effectively prevent member countries from passing legislation that disproportionately affected the tech industry, including on topics such as market dominance and privacy.

The pressure campaign by the left has escalated in recent months. Warren in May released a report showing American trade officials solicited the advice of lobbyists for Amazon, Google and other tech giants to help craft IPEF. Demand Progress parked a truck outside of a trade meeting in Detroit, calling on Tai and Commerce Secretary Gina Raimondo to “stop helping big tech.”

Tai has acknowledged the concerns from progressives. “We need to be very, very mindful of how we expand this conversation around digital economy and digital trade to a set of stakeholders beyond just the biggest companies,” Tai said at a June 12 conference.

 Fuente: Bloomberg