October 12, 2017

WASHINGTON —Today, ITI President and CEO Dean Garfield urged Congress to pursue policies that support and promote the benefits of digital trade for American consumers, businesses, and the overall economy. In testimony before the House Energy and Commerce Subcommittee on Digital Commerce and Consumer Protection, Garfield described the wide-ranging implications of digital trade for the U.S. economy and outlined what the U.S. can do to maximize those benefits and maintain its leadership this area.

Digital trade is any economic activity involving the movement of digital information (or “data”) across borders, from production of automobiles, to electronic payments by consumers, to new customer searches by small and medium-sized enterprises (SMEs), and to the delivery of everyday products for working families. Digital trade is a critical part of the U.S. economy and important source for jobs. In fact, the International Trade Commission has estimated that digital trade helped create 2.4 million jobs in the United States in 2011 and that U.S. GDP increased between $517 billion and $710 billion (3.4 to 4.8 percent) as a result of digital trade in that same year. The ITC also found that, in 2012, SMEs sold some $227 billion in goods and services online.

“The internet, digital technologies, and, therefore, digital trade, are fundamental to the competitiveness and success of U.S. companies and American workers in all sectors, to making international trade and the global economy more inclusive, and to making people’s lives better,” Garfield said. “Digital trade isn’t just a tech issue, it’s a U.S. innovation, growth, and job creation issue. Congress has a critical role to play in effectuating this leadership and is well-positioned to provide the kinds of oversight and support that a well-designed U.S. policy on digital trade demands.”

While the U.S. continues to be the global leader in digital trade, in recent years governments around the world have adopted measures that interfere with the movement of data across borders, discriminate against U.S. firms, and, as a result, undermine U.S. economic interests.

In his testimony, Garfield recommended that Congress focus on the following actions to mitigate these risks and create an economic environment where businesses of all sizes can realize the vast benefits of digital trade:

  • Maintain U.S. leadership by crafting new rules that reflect the digital nature of the U.S. economy and that prevent or eliminate barriers to digital trade
  • Remove data localization requirements
  • Enforce U.S. trade agreements to ensure U.S. companies and workers can compete fairly
  • Increase efforts and resources to support a digital agenda in U.S. trade policy, including creating a position(s) at USTR responsible for digital trade.

ITI has been vocal in its support of allowing data to flow freely as the United States modernizes its trade agreements. Earlier this year, ITI urged the Trump Administration to focus on technology-related trade barriers preventing U.S. companies from selling their goods and services overseas or impeding cross-border data flows that are vital to the economy.

Public Policy Tags: Trade & Investment