The U.S. Government recently took a significant step toward a 21st century trade policy. The U.S. Trade Representative’s “National Trade Estimate Report on Foreign Trade Barriers” (NTE) singled out numerous barriers to international, Internet-enabled commerce in its annual “threat assessment” for U.S. trade. (very large PDF here). While media coverage focused on the fact that the NTE report called out direct Internet censorship in nations like China (e.g., Reuters, N.Y. Times, AP), the report goes much further than that.
In fact, USTR specifically highlighted the NTE report’s new focus on digital trade. In addition to citing censorship, the report flags other examples of filtering and site blocking, and identifies issues like mandatory localization rules and liability standards, among other problems. As DisCo has covered before, U.S. trade policy has slowly evolved toward recognizing Internet trade as a mode of commerce that is on equal footing with physical trade.
Although more than 20 years have passed since the commercialization of the Internet, online commerce continues to be treated differently from global physical commerce. While international rules unambiguously prohibit restricting trade in goods (except in narrow circumstances), a filing by my organization, CCIA, documented widespread discrimination against Internet trade in services. Although trade scholars have argued for years that WTO rules should be understood to prohibit these digital trade barriers,   they are frequently flouted. Aside from a handful of cases, few countries have attempted to enforce free trade rules with respect to the Internet. As I explained to a Congressional commission last year, this includes the United States, much to the detriment of U.S. exports. MORE »