USTR: Ending Digital Trade Provision Support Allows Domestic Flexibility

The Biden administration withdrew its support for World Trade Organization provisions on cross-border data flows and data localization to allow flexibility for domestic policy debate, an Office of U.S. Trade Representative spokesperson said in a statement Wednesday. USTR responded after nearly 50 organizations on Tuesday asked the White House to reverse its decision to withdraw support for WTO provisions on cross-border data flows, data localization and source code. Many countries are “examining” approaches to data and source code and the impact of trade rules, said USTR: “In order to provide enough policy space for those debates to unfold, the United States has removed its support for proposals that might prejudice or hinder those domestic policy considerations. The [Joint Initiative on E-Commerce] continues to be an important initiative and the United States intends to remain an active participant in those talks.” Groups including CTA, CTIA, the U.S. Chamber of Commerce, TechNet, BSA|The Software Alliance, the Computer & Communications Industry Association and the Entertainment Software Association said Tuesday they have “profound concern” about U.S. Trade Representative Katherine Tai withdrawing support for “disciplines that protect cross-border data flows; prohibit data localization mandates; preclude discrimination against American made digital products; and safeguard sensitive source code from forced disclosure mandates that enable malicious cyberactivity.” These “core disciplines” advance U.S. innovation and competitiveness, they said. This “sudden and perplexing decision of USTR to abandon its global leadership by pulling back from negotiating key digital rules at the WTO must be revisited,” CCIA Vice President-Digital Trade Jonathan McHale said in a statement.