ITI Cites Data Localization Practices of Foreign Nations as Trade Barrier, in Comments to USTR

The Information Technology Industry Council told the Office of the U.S. Trade Representative Wednesday that increasing data localization practices by foreign governments threaten U.S. and global economic growth. In ITI's comments on the National Trade Estimate Report on Foreign Trade Barriers (NTE), the group said members have "experienced a significant increase" in the use of localization measures across the globe. Data localization is the practice of governments employing measures to favor local businesses and enterprises primarily in the information and communications technology space, which ITI said can be done "under the guise of promoting local industries and protecting privacy." These practices have "forced [ITI member companies and others] to make costly adjustments to their operations on the ground, regionally or globally, in order to comply with these measures," ITI said. It identified localization requirements in China, Indonesia, Nigeria, Russia, Turkey and Vietnam, and warned it's possible more governments will consider or put in place similar requirements by the time the USTR's NTE is published. "ITI is greatly concerned about the impact of such digital protectionism on international trade and investment, innovation, and the ability of people and businesses all over the world to benefit from free and open flows of information and data through the Internet and Internet-based technologies," it said. ITI recently released a blog post citing Indonesia's need to address localization practices in order for it to join the Trans-Pacific Partnership (see 1510280075). The public comment submission period for the USTR report ended Wednesday, but comments were only being made available by those who filed them, not the government. “As Internet services become a greater part of the global economy,” it will become “more important to monitor digital trade barriers,” the Computer & Communications Industry Association said in comments. CCIA detailed how recent moves "to restrict online information for alleged copyright reasons violates current trade agreements"; how Internet censorship has affected countries in Asia, the Middle East and Russia; and problems companies face following the European Court of Justice’s ruling earlier this month that declared the U.S.-EU safe harbor agreement invalid, in its comments. “As the economy evolves, the NTE will need to increasingly investigate and respond to barriers to digital trade if the Internet and Internet-enabled services are to continue to be export growth leaders,” said CCIA CEO Ed Black in a news release.