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Internet Industry Urges USTR To Combat Extensive, Growing Barriers To Digital Trade In 2021 NTE Filing

“IA urges USTR to act decisively and quickly to stem the rapid expansion of digital trade barriers at this crucial moment in order to protect and expand the American digital sector’s benefits to users and entrepreneurs.”

Jordan Haas, Director, Trade Policy

Washington, DC – Internet Association (IA) today released its submission for the United States Trade Representative’s (USTR’s) National Trade Estimate Report (NTE) for 2021. IA’s filing details how many countries and regions, including traditional economic allies like the EU, are imposing significant barriers to digital trade that undermine the U.S.’s leadership in the digital economy.

“The pandemic has only highlighted the importance of digital trade and information flows in keeping the economy moving and communities connected during this crisis,” said IA Director of Trade Policy Jordan Haas. “But American digital companies, and the thousands of small businesses that rely on them, are facing new and growing challenges in providing these services around the world. IA urges USTR to act decisively and quickly to stem the rapid expansion of digital trade barriers at this crucial moment in order to protect and expand the American digital sector’s benefits to users and entrepreneurs.”

The U.S. exported more than $517 billion in digital services last year, with digital trade now accounting for more than 59 percent of all U.S. services exports, but the threat of digital trade barriers is only growing. One of the most alarming trends, highlighted in IA’s filing, is the growing chorus of countries calling for “cyber sovereignty” and siloed digital economies, including among traditional economic allies. The EU is embracing a digital sovereignty narrative and enacting new unilateral digital service taxes (DST) targeting U.S. companies, to name just one example. Countries like Kenya, Indonesia, and India have also jumped on the bandwagon of discriminatory digital taxation, underscoring the risk of contagion. And the financial stress of the pandemic may inspire even more governments to shortsightedly impose DSTs or other harmful measures that unfairly target U.S. companies.

IA’s filing outlines barriers in more than 50 countries and regions. The top barriers for American companies by volume include:

  • Infrastructure-based regulation of online services
  • Unilateral or discriminatory digital tax measures?
  • Data flow restrictions and service blockages?
  • Copyright-related barriers?

The full list of barriers detailed in IA’s report includes: copyright-related barriers, customs barriers to growth in e-commerce, data flow restrictions and service blockages, discriminatory or opaque application of competition regulations, divergence from privacy best practices, filtering and service-blocking, infrastructure-based regulation of online services, non-IP intermediary liability restrictions, restrictions on cloud service providers, sharing economy barriers, unilateral or discriminatory digital tax measures.

“USTR must prioritize preserving and expanding the internet’s role as a key driver of U.S. exports, job creation, and economic development by continuing to make digital trade a top priority in the 2021 NTE Report and its trade agenda,” Haas added.

To read the full filing, click here.

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