US Shifts Stance Toward Greater Regulation of Digital Technology

In October 2023, the United States shifted its stance on digital technology. In 2019, the United States Trade Representative (USTR) under President Trump proposed that the WTO construct e-commerce rules to allow cross-border data flows. The administration held that no national requirements should exist for data localization and software source code reviews.

USTR’s Katherine Tai withdrew the proposals in Geneva at a WTO Joint Statement Initiative on E-Commerce meeting. The US has re-evaluated its approach in sensitive areas, including source code and data management. As the USTR put it, the country must balance various objectives, such as reigning in anticompetitive behavior within a digital economy and ensuring policy in the public interest.

The US Chamber of Commerce had a differing perspective, describing current digital trade rules as effective. It contended that the rules prevented nations from employing onerous digital regulations that lockout American corporations and employees. The Senate Finance Committee chair, a Democrat, took the criticism further, calling the shift a move that strengthens China’s policy of “internet censorship and government surveillance.”

The USTR policy shift reflects an emerging Biden administration priority. It aims to enforce regulations on large tech firms with monopolistic behavior. The new stance underpins digital trade negotiations within the Indo-Pacific Economic Framework for Prosperity (IPEF), a US-led trading group that includes several Asian nations.

Two Key Trade Initiatives Serving Multiple Functions

The Americas Partnership for Economic Prosperity (APEP) and the Indo-Pacific Economic Framework for Prosperity (IPEF) represent two distinct but interrelated initiatives within the broader spectrum of US trade policy. Established in 2022, it embodies a negotiation framework among 13 national members, including the United States, Thailand, Vietnam, the Republic of Korea, and Australia. APEP is a separate initiative with partner members including the Americas, Canada, Mexico, Costa Rica, and the Dominican Republic, among other national members.

These initiatives share several commonalities. A key similarity is their emphasis on promoting economic cooperation, regulatory alignment, and coordination among multiple nations. Both APEP and IPEF focus on fostering resilient supply chains, clean energy, and inclusive trade practices. These initiatives emphasize the importance of addressing key issues such as labor rights, environmental protection, and transparency in rulemaking and regulations without explicitly incorporating market access mechanisms like tariff reductions.

According to AmericanProgress.org, APEP and IPEF are significant steps toward addressing some concerns of climate and worker advocates in the United States, signaling a nuanced approach to trade agreements that accommodates a broader range of economic and social priorities. Both initiatives demonstrate the United States’ commitment to regional economic cooperation. While the nations involved in these initiatives differ to some extent, they collectively highlight the importance of multilateral engagement in promoting economic prosperity.