WASHINGTON, DC - The Subcommittee on Commerce, Manufacturing, and Trade, chaired by Rep. Lee Terry (R-NE), today held a hearing on “Cross Border Data Flows: Could Foreign Protectionism Hurt U.S. Jobs?" The hearing examined cross-border data flows - the transfer of data across international borders - and how it impacts jobs and businesses in nearly every sector of our economy, and heard from witnesses about how efforts to restrict data flows have harmed economic growth to the tune of billions of dollars. The need to protect cross-border data flows is especially timely and important as the U.S. is in the midst of negotiations that will set the baseline for international data policy, including negotiations for the Trans-Pacific Partnership (TPP), Transatlantic Trade and Investment Partnership (TTIP), Trade in Services Agreement (TiSA), and Safe Harbor Framework.
Linda Dempsey, Vice President of International Economic Affairs at the National Association of Manufacturers reflected on the growing importance of digital trade to the economy, stating, “The use of digital platforms, including sharing data and information across borders, is increasingly important to industries across many different economic sectors, particularly a broad range of manufacturing industries. While some manufacturers produce and manage the information and communications technology (ICT) infrastructure, most manufacturers, like other businesses, are major consumers of these new technologies and equipment, which have been an important driver of productivity, competitiveness and new economic opportunity across the globe." She also warned against actions limiting data flows, adding, “One of the biggest new commercial challenges globally is the issue before the subcommittee today - the growth of new barriers to the movement of data and information across national borders and foreign government localization barriers that seek to require the use of local information technology infrastructure."
Sean Heather, Vice President of the U.S. Chamber of Commerce’s Center for Global Regulatory Cooperation explained how recent data trade restrictions put into place by other countries are misguided and counterproductive. “Recent restrictions proposed in response to allegations regarding foreign government surveillance inappropriately conflate concerns about access to data for national security and law enforcement purposes with commercial use of, and access to, data. Other restrictions are rooted in government efforts to bolster domestic industry and support national companies. Ultimately, however, instead of creating jobs, these rules reduce efficiency, increase costs to local businesses, and block access to customers abroad, as they simultaneously prevent local consumers from buying the best products and services. Restrictions on cross-border data flows only serve to isolate domestic economies from the economic growth potential associated with the digital economy," said Heather.
Brian Bieron, Senior Director at eBay Incorporated, noted that protectionist data policies are particularly harmful to small businesses and consumers and expressed, “We sit at the dawn of a new era of globalization that is far more inclusive than the one that preceded it. A future where millions of small businesses from across the US can contribute to their local economy, but also increase revenue through access to customers around the world. This is good economics because it means more growth and wealth, and it is good for society because it means a more inclusive future. We need to make the right policy choices to achieve this future."
Chairman Terry stressed the importance of speaking with one voice and concluded, “When it comes to trade, the U.S. cannot allow protectionism-under the pretext of privacy-to threaten U.S. jobs and U.S. competitiveness. Our trade negotiators with USTR and the International Trade Administration have stressed to their counterparts overseas that the negotiations must focus on the commercial flow of data, which is of great value to everyone involved. There are many pieces that touch on data flows: the Trans-Pacific Partnership, the Trade in Services Agreement, the Transatlantic Trade and Investment Partnership, and the Safe Harbor Framework. We cannot falter in any of these."
