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Digital Trade Negotiating Position Decried by Ways and Means Members

Three-quarters of the Republican majority on the House Ways and Means Committee, along with five committee Democrats, told the U.S. trade representative that they oppose her "decision to abandon important bipartisan digital trade proposals at the World Trade Organization (WTO). This action, which was made without sufficient consultation with Congress, runs counter to the interests of American workers and businesses of all sizes and cedes more leverage to other foreign powers, including the Peoples’ Republic of China, that seek to write the rules of the 21st-century digital economy. We urge the administration to reconsider its approach."

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In a Nov. 16 letter, led by Rep. Darin LaHood, R-Ill., and Rep. Suzan DelBene, D-Wash., co-chairs of the Digital Trade Caucus, the lawmakers argued that digital services are 75% of U.S. services exports.

The letter, which also was signed by Democrats and Republicans not on the committee for a total of 38 signatories, said the U.S. should push back against other countries' data localization requirements; restrictions on cross-data flows; digital services taxes; intellectual property theft, such as source code theft; and other regulations that hurt American tech firms.

"We wholeheartedly agree that the United States and our allies must maintain sufficient room to regulate the digital economy in a fair and transparent manner. Further, we agree that consumers must be protected as they interact with the digital economy, including by bolstering consumer data privacy protections and cybersecurity safeguards," the lawmakers wrote. "The U.S. can regulate companies within our borders without giving foreign countries, including our adversaries, the impression that the United States will no longer protect our industries and workers against discrimination."

They said the U.S. should continue to argue for the digital trade provisions in USMCA. "We are troubled that USTR has abandoned these positions without meaningful consultations with Congress and without putting forth any alternative approaches to advance the key objectives we outline above. The void created by this decision will harm American workers, companies, security, and innovation, while benefitting our largest competitors in the digital space."

The Office of the U.S. Trade Representative didn't immediately respond to a request for comment on the members' argument.