KORUS and Data Localization
Summary
SIFMA provided comments to the Treasury regarding the outcomes of the upcoming KORUS Financial Services Committee meeting in Seoul, Korea.
Excerpt
8 June 2018
Douglas Bell
U.S. Department of the Treasury
Deputy Assistant Secretary for Trade and
Investment
1500 Pennsylvania Ave, NW
Washington, D.C. 20220
Daniel Bahar
United State Trade Representative
Assistant USTR for Services and
Investment
600 17th Street, NW
Washington, D.C. 20508
Dear Doug and Daniel,
Re: KORUS and Data Localization
SIFMA 1 looks forward to learning about the outcomes of the upcoming KORUS Financial Services Committee meeting in Seoul, Korea. The Republic of Korea is an important market for the U.S. financial services industry and for our economy – enhancing capital flows between the two countries, by promoting mutual market access and regulatory fairness, is something SIFMA applauds. We are writing to encourage you to begin considering ways in which the U.S. and Korea can modernize their commercial and economic relationship as we look towards areas where cooperation will be most important beyond next week’s meeting.
Since the U.S. Korea Free Trade agreement was signed in 2006, and entered into force in 2011, the technological and commercial environment has evolved significantly. Crossborder trade of digitally-deliverable services has risen dramatically: global e-commerce reached almost $28 trillion in 2016,2 leaving some observers to conclude that “[v]irtually every type of cross-border transaction now has a digital component.”3 The ability to use and transfer consumer data across borders is therefore essential to support trade and investment in the 21st century. Cross border data flows have increased global GDP by 10 percent over the last ten years.4 Digital trade is important for every sector of the economy, and financial services exports engender a multiplier effect for trade and investment by manufacturers, agriculture producers, and other service providers that further contribute to the digital economy. In this new digital economy, data security, and efficiency is critically important to businesses, governments, and consumers.
1 SIFMA is the voice of the U.S. securities industry. We represent the broker-dealers, banks and asset managers whose nearly 1 million employees provide access to the capital markets, raising over $2.5 trillion for businesses and municipalities in the U.S., serving clients with over $18.5 trillion in assets and managing more than $67 trillion in assets for individual and institutional clients including mutual funds and retirement plans. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.”
2 U.S. International Trade Commission, “Despite Huge Growth in Global Digital Trade in Recent Years, Some Countries Seek to Slow Adoption, Reports USITC,” September 2017, https://www.usitc.gov/press_room/news_release/2017/er0928ll836.htm.
3 McKinsey, “Digital globalization: The new era of global flows,” March 2016, https://www.mckinsey.com/businessfunctions/digital-mckinsey/our-insights/digital-globalization-the-new era-of-global-flows.
4 Ibid.