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The Office of the U.S. Trade Representative must revise its digital trade policy now to reassert American leadership, the NAM and more than 40 industry partners told the Biden administration ahead of U.S. Trade Representative Katherine Tai’s testimony this morning before the House Committee on Ways and Means.

What’s going on: In the past few years, the USTR has “retreat[ed] from digital trade protections,” the groups told National Security Adviser Jake Sullivan and National Economic Council Director Lael Brainard. Problematic actions/items by the USTR include:

• The October 2023 withdrawal of longstanding U.S. World Trade Organization positions that support the protection of cross-border data flows, stop data localization requirements, end discrimination against U.S. firms and their goods and services and protect sensitive data from bad actors;
• Abandonment of core U.S. policy priorities in the Indo-Pacific Economic Framework for Prosperity; and
• The omission in the USTR’s 2024 National Trade Estimate Report on Foreign Trade Barriers of numerous digital trade barriers, despite the statutory obligation under the Trade Act of 1974 to detail such barriers.

Why it’s important: These moves raise “deep economic and national security concerns,” the groups continued. They are in direct opposition to the interest of U.S. companies and their employees, and they give greater power to foreign nations, including China, “to write the rules that will govern the global digital economy for years to come.”

What must be done: The USTR must revise its stance on digital trade to “stand up for U.S. businesses and workers who face damaging digital trade barriers in foreign countries.”