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Setting the Digital Standard for U.S. Trade Agreements 

· August 9, 2019

Work continues among Congressional leaders and members of the House Ways & Means Committee on implementing legislation of the U.S.-Mexico-Canada Agreement (USMCA).  Reports suggest that legislation could be taken up following the August recess, with a number of Democrats offering promising statements of progress in the four designated Working Groups.

The Administration has pointed to the benefits of the agreement’s new Digital Trade chapter in pitching USMCA to Congress and the public (here; here).  A critical provision of this new chapter is the inclusion of Article 19.17 that pertains to protections for “interactive computer services”.  This language, similar to the “Section 230” Good Samaritan protections of the 1996 Telecom Act (47 U.S.C. § 230), incentivizes Internet services to proactively remove content that violates terms of service such as violent or illegal content.  These provisions are critical for U.S. international competitiveness and global U.S. tech leadership and provide certainty to service exporters of all sizes when operating in new markets.

The importance of these provisions to strengthening U.S. digital trade is not universally understood.  Some have recently suggested that the language in Article 19.17 of the negotiated text is not “ripe” for inclusion.  

The premises underlying that position are flawed for two reasons.

First, critics suggest that the inclusion of Article 19.17 would restrict Congress’ ability to legislate in the future regarding Section 230.  However, if Congress chooses to act in this area, it would not be precluded from doing so based on specific provisions outlined in USMCA. The provisions in Article 19.17 in the negotiated text are specifically written at a higher level of generality than U.S. law (see previous DisCo post comparing the text of Section 230 and Article 19.17). 

The Digital Trade chapter is also subject to Article 32.1 of the USMCA outlining General Exceptions, allowing for parties to enact measures “necessary for the protection of public morals” (consistent with Article XIV of GATS).  Negotiators went a step further to make clear that this applies to Article 19.17.  The Annex (19-A) states: 

For greater certainty, Article 19.17 (Interactive Computer Services) is subject to Article 32.1 (General Exceptions), which, among other things, provides that, for purposes of Chapter 19, the exception for measures necessary to protect public morals pursuant to paragraph (a) of Article XIV of GATS is incorporated into and made part of this Agreement, mutatis mutandis

The Annex also makes explicit reference to recent changes to Section 230.  Negotiators cite the recently-enacted FOSTA-SESTA as a recognized example of an exception to the requirements under Article 32.1 (exceptions for measures to protect public morals). 

In recent testimony before the House Ways & Means Committee on June 17, Ambassador Lighthizer recognized that these inclusions were intentional.  He noted that the specific language was included to make sure there were “no problems” regarding possible Congressional action in response to a question on the inclusion of Article 19.17. 

Second, some have cited ongoing policy discussion regarding Section 230 as a reason to not include these provisions in trade agreements going forward.  The policy discussions cited are in response to concerns regarding harmful content online. While the letter does not take a position on these concerns or arguments in support of legislative action, it characterizes Section 230 as a “liability shield” that precludes action on behalf of Internet services. 

However, much of the current policy debate fails to recognize that language consistent with Section 230 is precisely why intermediaries need legal certainty to remove harmful content, including extremism and misinformation that often populates policy discussions on this law.  As DisCo has previously explained (citing a drafter of Section 230, Senator Ron Wyden), the law was intended as both a ‘shield’ and a ‘sword.’  It gives Internet services a ‘sword’ to use against abusive content by providing a ‘shield,’ or limitation on liability, providing legal certainty to services of all sizes. 

The USMCA has the strongest provisions on digital trade in any U.S. trade agreement.  With demonstrated projected gains to U.S. leadership in the Internet economy, it makes little sense to abandon these key provisions in future U.S. trade agreements.  

Digital Trade

Companies rely on clear, predictable rules that facilitate digital trade to export their products and services around the world. These rules include balancing the competing interests between encouraging investment and enabling information access; promoting the free flow of information online; and maintaining balanced intermediary liability regimes.