AEI on TPP with Amb . Holleyman
American
Enterprise Institute
TPP’s
Transformative Digital Trade Rules
Friday,
June 10, 2016
Key
Topics & Takeaways
-
Combating Data
Protectionism: Ambassador Holleyman, Deputy U.S.
Trade Representative, called for “urgency” in addressing rising data
protectionism around the globe. He noted that many countries have
implemented data localization and prohibitions on cross-border data flows under
the guise of cybersecurity, but he explained that their ultimate goals are more
“pernicious,” such as to erect digital borders. For instance, Holleyman
pointed to China’s sweeping Cybersecurity Law that is being considered by the
National People’s Congress, which would impose severe restrictions on
cross-border data flows and intrusive requirements on source codes, he
explained. Holleyman cautioned that this law has the potential to
“destroy” the efficient market that the Internet provides for goods and
services.
-
Data Localization Fix for
Financial Services: Regarding the data localization carve-out
for financial services in the Trans-Pacific Partnership (TPP), Holleyman
reiterated that the agreement cannot be renegotiated, but acknowledged that the
Administration is currently seeking alternative ways to address the concerns of
Members of Congress and industry, such as revising language in future
agreements that would afford financial services providers protections against
forced data localization in other markets.
Speakers:
-
Robert Holleyman,
Office of the U.S. Trade Representative
-
Claude Barfield,
American Enterprise Institute
-
Joshua Meltzer,
Brookings Institution
Keynote Speech
Robert Holleyman, Deputy United States Trade
Representative
Holleyman
explained that the Trans-Pacific Partnership (TPP) is the “hallmark” of U.S.
efforts to address trade barriers that would have an adverse impact on digital
trade and American innovation. He acknowledged that the TPP negotiation was
“intense” because it involved 12 diverse economies, but argued that the TPP
will ultimately “break new ground” by addressing trade barriers to
digital-intensive industries. Holleyman touted the aggregate benefits of
trade for both consumers and workers, noting that export-related jobs in
America pay up to 18 percent more (on average) than non-export-related
jobs. He also explained that the agreement will help realize the U.S.’s
comparative advantage in the digital trade sector, which he explained is
attributable to four factors (according to McKinsey), the: 1) quality of
internet infrastructure in the U.S; 2) ability of universities and technology
companies to attract top talent; 3) access of small and medium-sized
enterprises (SMEs) and entrepreneurs to efficient capital markets; and 4)
business climate that encourages innovation. Still, Holleyman acknowledged that
the ability of U.S. technology innovators to maintain their global dominance
depends on their ability to access foreign markets where an estimated 95
percent of the world’s consumers and businesses reside.
Holleyman
argued that trade policy plays a “critical and essential role” in giving
American innovators a “fair shot” in the global digital marketplace. He
reiterated that the TPP will combat forced localization of data and digital
protectionism, as well as provide “cutting edge obligations that are designed
to support the growth of digital trade.” Noting that ratification
is the final step toward implementing the agreement domestically, Holleyman
maintained that the TPP is “now ripe for Congressional consideration.”
Further, he warned that alternative trade agreements are moving forward as time
passes, including the 16-nation Regional Comprehensive Economic Partnership, the
“China-led alternative to TPP” that does not include protections against
digital trade barriers, which he said is expected to be completed later this
year.
Panel Discussion
Balancing
Privacy in Trade Agreements
Joshua Meltzer, Brookings Institution, underscored the
importance of thinking more deeply about what the digital trade protections
achieved in TPP mean for other economies, such as in Europe where some states
have pushed back on the Privacy Shield agreement. Holleyman agreed that
privacy is a “core value” in U.S. trade policy, and is essential to increase
consumers’ confidence in using the Internet. Holleyman explained that the Trade
in Services Agreement (TiSA) and Transatlantic Trade and Investment Partnership
(TTIP) negotiations depend on what happens with the Privacy Shield, but argued
that using the TPP as a model of what the future of digital trade will look
like has helped bolster negotiations on these issues.
TTIP
and TiSA
Claude Barfield of American Enterprise Institute (AEI) noted that the
TTIP and the TiSA partner countries have introduced barriers to trade in
digital services, and asked how that would affect the negotiations. Holleyman
explained that the countries that have erected such barriers are “by and large”
not TiSA negotiating partners, so he has not experienced entrenched opposition
to these policies. Holleyman further added that he is optimistic about the U.S.
authorities’ ability to put in place protections to digital trade, using the
TPP as the benchmark.
Addressing
China’s Great Firewall
Holleyman
explained that U.S. officials have a variety of mechanisms to address trade
barriers (including barriers to cross-border data flow) with China, including
the World Trade Organization’s dispute settlement mechanism, bilateral
discussions, and the ongoing Bilateral Investment Treaty discussions. Holleyman
added that, while China is not part of the TPP, having that agreement in place
gives the U.S. additional leverage to secure commitments from China on issues
affecting digital trade.
Data Localization Fix for Financial Services
A
member of the audience raised the data localization carve-out for financial
services in the TPP agreement, specifically asking when legal advisers would be
able to see the text of the proposed fix. Holleyman reiterated that the TPP
cannot be renegotiated, but acknowledged that the Administration is currently
seeking alternative ways to address the concerns of Members of Congress and
industry, such as revising the language for future agreements that would afford
financial services providers protections against forced data localization in
other markets.
Taiwan’s
Interest in TPP
In
response to a question regarding Taiwan’s interest in joining TPP, Holleyman
explained that it is “premature” to talk about any new entrants to the
agreement until it is ratified domestically, as well as in partner countries.
Thereafter, he explained, the current TPP economies can
consider whether other countries are ready to embrace the high standards in the
agreement.
Additional
information about this event can be accessed here.
,Blog Tags:,Blog Categories:,Blog TrackBack:,Blog Pingback:No,Hearing Summaries Issues:International/Trade,Hearing Summaries Agency:Special Event,Publish Year:2016
American
Enterprise Institute
TPP’s
Transformative Digital Trade Rules
Friday,
June 10, 2016
Key
Topics & Takeaways
-
Combating Data
Protectionism: Ambassador Holleyman, Deputy U.S.
Trade Representative, called for “urgency” in addressing rising data
protectionism around the globe. He noted that many countries have
implemented data localization and prohibitions on cross-border data flows under
the guise of cybersecurity, but he explained that their ultimate goals are more
“pernicious,” such as to erect digital borders. For instance, Holleyman
pointed to China’s sweeping Cybersecurity Law that is being considered by the
National People’s Congress, which would impose severe restrictions on
cross-border data flows and intrusive requirements on source codes, he
explained. Holleyman cautioned that this law has the potential to
“destroy” the efficient market that the Internet provides for goods and
services. -
Data Localization Fix for
Financial Services: Regarding the data localization carve-out
for financial services in the Trans-Pacific Partnership (TPP), Holleyman
reiterated that the agreement cannot be renegotiated, but acknowledged that the
Administration is currently seeking alternative ways to address the concerns of
Members of Congress and industry, such as revising language in future
agreements that would afford financial services providers protections against
forced data localization in other markets.
Speakers:
-
Robert Holleyman,
Office of the U.S. Trade Representative -
Claude Barfield,
American Enterprise Institute -
Joshua Meltzer,
Brookings Institution
Keynote Speech
Robert Holleyman, Deputy United States Trade
Representative
Holleyman
explained that the Trans-Pacific Partnership (TPP) is the “hallmark” of U.S.
efforts to address trade barriers that would have an adverse impact on digital
trade and American innovation. He acknowledged that the TPP negotiation was
“intense” because it involved 12 diverse economies, but argued that the TPP
will ultimately “break new ground” by addressing trade barriers to
digital-intensive industries. Holleyman touted the aggregate benefits of
trade for both consumers and workers, noting that export-related jobs in
America pay up to 18 percent more (on average) than non-export-related
jobs. He also explained that the agreement will help realize the U.S.’s
comparative advantage in the digital trade sector, which he explained is
attributable to four factors (according to McKinsey), the: 1) quality of
internet infrastructure in the U.S; 2) ability of universities and technology
companies to attract top talent; 3) access of small and medium-sized
enterprises (SMEs) and entrepreneurs to efficient capital markets; and 4)
business climate that encourages innovation. Still, Holleyman acknowledged that
the ability of U.S. technology innovators to maintain their global dominance
depends on their ability to access foreign markets where an estimated 95
percent of the world’s consumers and businesses reside.
Holleyman
argued that trade policy plays a “critical and essential role” in giving
American innovators a “fair shot” in the global digital marketplace. He
reiterated that the TPP will combat forced localization of data and digital
protectionism, as well as provide “cutting edge obligations that are designed
to support the growth of digital trade.” Noting that ratification
is the final step toward implementing the agreement domestically, Holleyman
maintained that the TPP is “now ripe for Congressional consideration.”
Further, he warned that alternative trade agreements are moving forward as time
passes, including the 16-nation Regional Comprehensive Economic Partnership, the
“China-led alternative to TPP” that does not include protections against
digital trade barriers, which he said is expected to be completed later this
year.
Panel Discussion
Balancing
Privacy in Trade Agreements
Joshua Meltzer, Brookings Institution, underscored the
importance of thinking more deeply about what the digital trade protections
achieved in TPP mean for other economies, such as in Europe where some states
have pushed back on the Privacy Shield agreement. Holleyman agreed that
privacy is a “core value” in U.S. trade policy, and is essential to increase
consumers’ confidence in using the Internet. Holleyman explained that the Trade
in Services Agreement (TiSA) and Transatlantic Trade and Investment Partnership
(TTIP) negotiations depend on what happens with the Privacy Shield, but argued
that using the TPP as a model of what the future of digital trade will look
like has helped bolster negotiations on these issues.
TTIP
and TiSA
Claude Barfield of American Enterprise Institute (AEI) noted that the
TTIP and the TiSA partner countries have introduced barriers to trade in
digital services, and asked how that would affect the negotiations. Holleyman
explained that the countries that have erected such barriers are “by and large”
not TiSA negotiating partners, so he has not experienced entrenched opposition
to these policies. Holleyman further added that he is optimistic about the U.S.
authorities’ ability to put in place protections to digital trade, using the
TPP as the benchmark.
Addressing
China’s Great Firewall
Holleyman
explained that U.S. officials have a variety of mechanisms to address trade
barriers (including barriers to cross-border data flow) with China, including
the World Trade Organization’s dispute settlement mechanism, bilateral
discussions, and the ongoing Bilateral Investment Treaty discussions. Holleyman
added that, while China is not part of the TPP, having that agreement in place
gives the U.S. additional leverage to secure commitments from China on issues
affecting digital trade.
Data Localization Fix for Financial Services
A
member of the audience raised the data localization carve-out for financial
services in the TPP agreement, specifically asking when legal advisers would be
able to see the text of the proposed fix. Holleyman reiterated that the TPP
cannot be renegotiated, but acknowledged that the Administration is currently
seeking alternative ways to address the concerns of Members of Congress and
industry, such as revising the language for future agreements that would afford
financial services providers protections against forced data localization in
other markets.
Taiwan’s
Interest in TPP
In
response to a question regarding Taiwan’s interest in joining TPP, Holleyman
explained that it is “premature” to talk about any new entrants to the
agreement until it is ratified domestically, as well as in partner countries.
Thereafter, he explained, the current TPP economies can
consider whether other countries are ready to embrace the high standards in the
agreement.
Additional
information about this event can be accessed here.