Top U.S. companies urge new Internet trade rules
3 November 2011
* Group says rules need to reflect new digital economy
* Trans-Pacific trade pact seen a good place to start
By Doug Palmer
WASHINGTON, (Reuters) - Google, Microsoft , Citigroup , IBM , GE and other top-tier American companies on Thursday urged the United States to fight for trade rules that protect the free flow of information over the Internet.
The unveiling of principles hashed out by the companies over the last nine months comes at a crucial moment, Rick Johnston, senior vice president for international government affairs at Citigroup, told reporters.
Past trade agreements have largely focused on eliminating tariffs on manufactured and agricultural goods. But "we’re now in an era where the economy is literally driven by the Internet. It’s a digital economy," Johnston said.
The group’s report says future U.S. trade pacts must "reflect the new realities of the global economy: specifically, the contribution of the Internet toward economic growth, toward job creation and exports," said Bob Boorstin, director of public policy for Google, which has battled Internet restrictions in China and other countries.
One dangerous trend is a requirement by an increasing number of governments for companies to locate data centers within a country’s borders in order to provide services, Boorstin said.
Such laws are discriminatory and contrary to the notion of cross-border trade, the coalition said in its paper, which also criticized actions "governments around the world" have taken to block access to information services such as Facebook, Twitter, WordPress and YouTube.
The office of U.S. Trade Representative Ron Kirk said the group’s recommendations match key elements of a joint position the United States and European Union have already introduced at the World Trade Organization.
"Eliminating barriers to cross-border data flows and other restrictions that are hindering the growth of the Internet and trade in information technology goods and services is a priority issue in the administration’s twenty-first century trade agenda," USTR said.
Even when Internet curbs are intended to support legitimate public interests such as national security or law enforcement, businesses can suffer when those rules are unclear, arbitrary, unevenly applied or more trade restrictive than they need to be to achieve their objectives, the group’s paper said.
In many cases Internet restrictions are simply "digital protectionism" to shield domestic companies from foreign competition, the paper said.
The companies said they hope their ideas will be reflected in the proposed Trans-Pacific Partnership, a free trade agreement that the United States is negotiating with eight countries in the region.
That would put pressure on China to adopt similar policies even though it is not currently a member of the TPP talks, said Bill Reinsch, president of the National Foreign Trade Council, which helped lead the effort to work out the group’s ideas.
MasterCard , Visa , Oracle , and GoDaddy.com also attached their name to the paper, along with the U.S. Chamber of Commerce, the Business Software Alliance, the Coalition of Services Industries and other groups.
USTR said it was already pushing many of the group’s concerns in the TPP talks and in the broader Asia-Pacific Economic Cooperation (APEC) group, which is holding its annual summit meeting this month in Hawaii.
The United States is strongly urging APEC members to minimize the trade-distorting impact of information and communication technology policies, including those related to data privacy and security, USTR said.
When appropriate, the United States should also bring cases at the WTO to enforce existing trade rules that cover cross-border data flows, the business coalition said.
"We want the free flow of data just like we want the free flow of goods and services," said Nuala O’Connor Kelly, chief privacy leader at General Electric. "In the information age, data is our widget."