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  July 20th, 2016 | Written by

TPP Critical for Ensuring Digital Trade

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  • TPP represents the best opportunity to establish rules to permit digital trade to flourish.
  • Crossborder data flows are critical for industries such as manufacturing, mining, retail, and financial services.
  • Dozens of countries have erected barriers to digital trade.

The Trans-Pacific Partnership (TPP) represents the best opportunity to establish high-standard rules that will permit digital trade—the lifeblood of the modern global economy—to flourish to the maximum extent possible.

That was the testimony of Robert D. Atkinson, founder and president of the Information Technology and Innovation Foundation (ITIF), a tech policy think tank, before a recent hearing of the U.S. House Ways and Means Subcommittee on Trade.

The United States should view this agreement as a building block toward stronger and more comprehensive rules for digital trade and data flows in future pacts, Atkinson added, including the Trade in Services Agreement (TiSA) and the Transatlantic Trade and Investment Partnership (TTIP).

“Data is increasingly the driving force of innovation and growth in the modern global economy,” said Atkinson. “This isn’t just about tech companies. Crossborder data flows are critical for a wide array of industries, from manufacturing to mining, and retail to financial services.”

Dozens of countries—both developed and developing—have erected a slate of barriers to digital trade, Atkinson noted in his testimony. They offer three main justifications for these barriers: privacy and security concerns, national security and law enforcement concerns, and aspirations for domestic economic growth.

None of these validate digital trade barriers, Atkinson argued. TPP’s ecommerce chapter takes a number of positive steps in pushing back against barriers to digital trade, he said. How effective these rules will be in removing existing barriers to digital trade—and preventing more in the future—depends in part on how TPP members interpret, enact, and enforce them, he added.

Atkinson urged U.S. policymakers to approve TPP, focus on TiSA and TTIP, and then look beyond them, including to championing a Data Services Agreement at the World Trade Organization and strengthening the U.S. mutual legal assistance treaty system.

“Implementing a strong TPP and establishing other high-standard agreements will help ensure that U.S. enterprises, many of which have pioneered the Internet and other digital technologies, can enjoy more open access to partners’ markets and be able to seamlessly move data across international borders,” Atkinson concluded. “If the TPP is not adopted, we will have lost a significant opportunity to put an affirmative stake in the ground demonstrating that localization barriers to digital trade are unacceptable.”