Press Release Employment Europe Globalization and Trade United States Workers

Biden Administration Reversal on Proposed Big Tech Trade Rules Is a Win for Workers, Consumers, Trade Policy Experts Say

October 25, 2023

Contact: Dan Beeton, 202-293-5380 x104Mail_Outline

Washington, DC — Today, the US Trade Representative announced that the US has removed its support for proposals on data flows and source code in negotiations on digital trade (or “e-commerce”) at the World Trade Organization, as they might prejudice domestic policy debates on those issues.

The Director of International Programs at the Center for Economic Policy Research, Deborah James, released the following statement:

“The Biden administration’s setting aside of outdated Big Tech proposals in trade agreements is a win for workers, small businesses, fairness, democracy, and development around the world. It is also a victory for civil society, including members of the Our World Is Not for Sale network that has campaigned against these provisions since 2016. The US first tabled these Big Tech proposals when public opinion was unaware of the dangers of Big Tech corporations monopolizing our technology, controlling our data, and locking in deregulation.

“Today, much of the world is far more aware of the dangers of Big Tech, including its monopoly practices, spreading of disinformation, abrogation of privacy and civil rights, and violation of workers’ rights by prioritizing profit maximization. All of these issues, and more, are the subjects of contemporary debate, as well as multiple lawsuits, indictments, and financial penalties, in the US and around the world. Nevertheless, for years, Big Tech has tried to gain binding new global rules on these issues to preempt appropriate governance through democratic channels. 

“The use of artificial intelligence (AI) has increased exponentially in recent years. Big Tech is pursuing proposals that would bar governments from having access to the source code underlying algorithms in order to regulate them. Companies use AI to decide more and more business practices, many of which violate competition rules, privacy, or civil rights. Thus, Big Tech’s corporate wish list includes locking up source code in a ‘trade’ agreement to ensure that governments can’t regulate most business practices!

“Proponents argue that these source code provisions are needed to protect against forced technology transfer (usually referencing China). But this is not considered an issue in most of the countries that are parties to digital trade agreements.

“Further extensive reasons why the exceptions to the source code text in these agreements are insufficient — in the US, the EU, and around the world — can be found in ‘The European Union’s Digital Trade Rules: Undermining European Policy to Rein in Big Tech.’ These include: that ‘white box’ testing (with access to the source code) is far superior to ‘black box’ testing (without it); the ‘general exceptions’ in the WTO — the model for those in the digital trade chapters — have been successful in only two out of 46 times in the WTO’s history; oversight must not be subject to review by a trade tribunal, which prioritizes trade considerations over human and fundamental rights; and true public oversight would require scrutiny not only by regulators and judicial adjudicators but also by academics, the media, critical engineers, and trade unions.

“In combination with the myriad harms to society detailed in the paper, it is difficult to avoid the conclusion that there is no compelling justification for, and yet an overabundance of arguments against, including provisions barring governments from requiring source code disclosure in ‘trade’ agreements, or barring governments from regulating data flows.

“The EU, Japan, Australia, Canada, and other countries pushing these proposals should do the same.

“Likewise, developing countries that are being pressured to join these agreements should strengthen their resolve. The Africa Group’s rejection of these proposals at the WTO in December 2017 was prescient.

“This is a first step toward making the administration’s digital trade policy more worker-centered.

“Next, the USTR must drop its advocacy for a permanent moratorium on customs duties on electronic transmissions. There is abundant evidence that Amazon, Netflix, Apple, and Microsoft, etcetera, can afford normal trade taxes on electronic books, movies, music, and software when they profit on selling products around the world. These taxes are essential revenue sources for developing countries to build their digital infrastructures, not to mention for public services, climate resilience, and other key needs. A tax holiday for the most profitable of Big Tech corporations does nothing for US workers or small businesses, while harming their counterparts around the world.”


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