Today, the Ways and Means Trade Subcommittee, chaired by Rep. Dave Reichert (R-WA), held a hearing to discuss the importance of breaking down barriers to digital trade, giving U.S. companies and their employees the ability to compete and succeed around the world. Digital trade allows U.S. companies to sell digital products and to expand their sales of traditional products and services in the global economy using online tools. When our companies are successful, they expand and hire more Americans.
As Chairman Reichert explained:
“Digital trade, including the use of online platforms and data flows, benefits both high-tech companies and traditional companies in a wide range of industries, like manufacturers, retailers, and service providers. These businesses depend on digital platforms to export goods and services.
“Small businesses in particular benefit from the opportunities that digital trade provides through global digital platforms, including e-commerce websites such as Amazon, search engines such as Microsoft’s Bing, and payment systems such as Paypal. And when our companies are successful because of digital trade, they grow and create more jobs here at home.”
Robert Atkinson, President of the Information Technology and Innovation Foundation, agreed with Chairman Reichert. He explained that digital trade is critical to the success of businesses in all sectors and of all sizes – not just high-tech companies – in today’s global market:
“As information technology has improved over the last decade, it’s become increasingly easy for companies to share data across borders. And not just easy, but necessary. … Unfortunately, though, dozens of countries now have put in place barriers and prohibitions that limit the ability to move data across borders.”
Echoing Mr. Atkinson’s point, Kavita Shukla shared that digital trade has allowed her to expand her small business from one that sells only at the local farmer’s market to one that operates effectively and efficiently around the world:
“We created a very basic online store, and on a whim, we enabled international markets. In less than a minute, FreshPaper was available worldwide. While we were selling FreshPaper in just one local store, the Harvest Co-Op, we were shipping FreshPaper across the world to places like Spain, Australia, Canada, the UK, Indonesia, Japan, and Brunei.
“I now joke that that we went global by accident. With just a few errant clicks, my farmer’s market stand now had access to an almost infinite global market.”
Members agreed that trade agreements are essential to breaking down foreign barriers to trade in U.S. products and services, giving U.S. companies the ability to compete – and win – in the global market. In particular, the Trans-Pacific Partnership (TPP) holds great promise to tear down barriers to digital trade for all sectors of the U.S. economy. As Rep. Reichert said:
“TPP also includes commitments to ensure the free flow of global information and data at the heart of the digital economy. It would prohibit data localization measures. But I share the disappointment of many Members of Congress and the financial services community that financial services were excluded from this localization commitment. I believe that the Administration has heard our concerns, and I appreciate that the Administration is working constructively to address this issue. I welcome our continued work to create a clear and enforceable ban on localization requirements in this sector for all TPP countries.”
These agreements must also be aggressively enforced to make sure that our trading partners are living by the rules. To understand the problems in the global digital market that our companies face, Rep. Mike Kelly (R-PA) asked the panel what a fair and balanced trade agreement means for the digital industry. As Chris Padilla from IBM replied:
“We shouldn’t have to have a data center in Brazil in order for a Brazilian to watch Serena Williams on the Wimbledon app, but there are regulations proposed that would require that.”
Today’s hearing made it clear: Ways and Means Members are committed to breaking down trade barriers abroad and ensuring American companies have the freedom to trade, compete, and win around the world. As Rep. Reichert said:
“We must build on the great success of U.S. companies in this area. We need to do more to tear down barriers to U.S. digital exports so we can allow our job creators to grow.”