Tech Pins its Trade Hopes on Bilateral Deals, NAFTA Re-write

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By Michaela Ross

Nov. 23 — Tech industry groups are looking to bilateral agreements and a North American Free Trade Agreement renegotiation to advance their trade agenda, now that the Trans-Pacific Partnership is almost certainly dead and another multilateral trade deal is stalled.

Tech trade and advocacy groups such as the Information Technology & Innovation Foundation (ITIF) and BSA | The Software Alliance, representing companies such as Apple Inc. and Microsoft Corp, had heralded digital provisions of the Trans-Pacific Partnership (TPP) and the second multilateral effort, the Trade in Services Agreement (TiSA), as essential to innovation and global growth.

The groups now are looking to President-elect Donald Trump’s promises of bilateral trade agreements and a NAFTA renegotiation as opportunities to put the provisions back in play.

“It’s hard to say what the scope of these renegotiated trade deals would be, but that would be fantastic if it would also include these digital trade issues which have emerged since the negotiation of NAFTA,” Nigel Cory, trade policy analyst at ITIF, told Bloomberg BNA.

Promoting cross-border data flows, prohibiting local data storage requirements, protecting intellectual property abroad and protecting platforms from being held accountable for content created by others -- known as intermediary liability protection -- are among elements the tech sector would like to see in future trade agreements.

Trump Nov. 21 confirmed his plan to withdraw the U.S. from the TPP, an agreement between 12 countries finalized in 2015 that the U.S. had yet to ratify. Negotiations on the Trade in Services Agreement have stalled in Geneva amid uncertainty about the incoming administration and the EU’s refusal so far to agree to e-commerce provisions.

In the U.S., digital trade has generated a $150 billion annual trade surplus, tech industry groups said in an October letter supporting trade provisions in TiSA.

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After Trump’s Nov. 8 win, some tech groups had turned their attention to TiSA negotiations among 23 global economies, which seemed on track to wrap up by year’s end. That deal’s focus on the international services market also appeared more likely to pass muster in Trump’s administration. Trump focused more as a candidate on the manufacturing sector than U.S. digital trade policy.

Trump’s transition team did not immediately respond to an emailed request for comment.

To be sure, TiSA negotiations could restart in 2017, and the tech sector hasn’t given up on it. But the deal is also facing opposition from economies such as the EU, which historically has stricter data privacy and localization policies than the U.S. The EU has pushed back on digital and e-commerce provisions under negotiation, arguing they don’t protect consumer privacy and leave people more vulnerable to data breaches.

But if TiSA fails, its digital trade provisions could be duplicated in future bilateral agreements, or in a renegotiation of NAFTA.

NAFTA, an agreement between the U.S., Canada and Mexico, came into effect in 1994, a technological eon ago. The Obama administration had looked to TPP as a way of updating the agreement and fostering cross-border data flows.

Mexico and Canada were both involved in TPP and would likely then agree to the same data provisions, Cory said.

Tech Looks to Agencies, Congress

Tech groups are focused on Trump’s picks for major administration roles that could shape digital trade policy. Apart from several appointments at the Office of the U.S. Trade Representative, the industry is also watching the U.S. Department of Commerce. The department’s new secretary and its new National Telecommunications and Information Administration administrator will hold influential roles.

Digital trade provisions also have bipartisan support from lawmakers, Aaron Cooper, vice president for global policy at BSA | The Software Alliance, told Bloomberg BNA.

While Trump’s campaign never released a detailed tech policy, the Republican National Committee’s platform, released in July, mentions support of the free flow of data across borders.

To contact the reporter on this story: Michaela Ross in Washington at mross@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

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