The Washington Post | 15 March 2023

Advocates urge US not to offer ‘Big-Tech-favored terms’ in trade talks

by Cristiano Lima

Consumer advocates are urging the Biden administration to scrub language from a U.S. trade proposal they say could undermine efforts to hold tech giants accountable for their privacy practices, according to a letter shared first with The Technology 202.

A coalition of advocates wrote to President Biden on Friday criticizing U.S. negotiators for offering a draft proposal ahead of trade talks in Indonesia this week that contains “problematic terms” giving “Big Tech firms control of our personal data” while limiting “government action.”

The negotiations around the proposal are an under-the-radar battleground between the tech giants and their foes in Washington, some of whom have long argued that industry groups are trying to exploit trade policy to fend off regulations globally.

Delegates from the Commerce Department and the Office of the U.S. Trade Representative have been dispatched to Bali this week to meet with leaders from 12 other countries seeking to strike a trade deal as part of the Biden-launched Indo-Pacific Economic Framework (IPEF).

While negotiators have yet to publicly release the U.S.’s proposal, the coalition wrote that they “understand from policymakers and others who have reviewed the draft” that its digital trade section could help let U.S. tech companies off the hook when it comes to privacy safeguards.

According to the letter, by limiting how much other countries can restrict where companies store and transfer user data, the proposal could allow them to “simply evade obligations … by transferring data to another firm in a jurisdiction where U.S. law enforcement cannot reach.”

Past trade pacts have seemingly sought to head off those concerns by exempting domestic rules that work toward achieving a “legitimate public policy objective.” But advocates argued in the letter those carve outs have been too narrow and urged Biden “not to replicate the Big-Tech-favored terms.”

The coalition of advocacy groups — including the American Economic Liberties Project, Consumer Action and Fairplay — called it a “stealthy backdoor effort to derail necessary digital governance initiatives here and around the world.”

The White House and the Office of the U.S. Trade Representative did not return requests for comment.

A slew of congressional leaders have pushed back against what they call efforts to bake protections for the tech sector into the U.S. trade pacts with foreign allies.

Last year, consumer advocates and lawmakers warned that trade language in the massive China competition bill could be exploited by the tech giants to target regulations abroad. Former House speaker Nancy Pelosi (D-Calif.) was said to share those concerns, as we reported.

During the Trump administration, Pelosi, Sen. Ted Cruz (R-Tex.) and other lawmakers similarly voiced concern about U.S. trade negotiators including language mirroring the tech industry’s liability protections under Section 230 into its pacts with Canada, Mexico and Japan. They argued the moves could hamper efforts to legislate the United States on Capitol Hill.

But some lawmakers have called on the federal trade officials to fight back against rules abroad that they say unfairly discriminate against U.S. tech companies.

In a letter last week, Sens. Ron Wyden (D-Ore.) and Mike Crapo (R-Idaho) called on the White House to “press” officials in the European Union about the “discriminatory aspects” of their new competition and content rules, the Digital Services Act and the Digital Markets Act.

“We support thoughtful, even-handed policies to protect consumers and encourage competition online,” they wrote. “However, regulatory efforts that discriminate against U.S. employers and their workers by exempting the EU’s domestic companies … are both unfair and counterproductive.”

European leaders have disputed criticisms that the rules unfairly discriminate against U.S. tech firms.

On Wednesday, some of the groups behind Friday’s letter are holding a trade event with Sen. Elizabeth Warren (D-Mass.) and Reps. Jan Schakowsky (D-Ill.) and Mark Takano (D-Calif.) on “Big Tech’s Ploy to Undermine AI Accountability, Privacy and Anti-Monopoly Policies.”