Senators Saxby Chambliss & Kent Conrad

As the global economy grows increasingly digital, official U.S. trade policy is apparently reverting to analog. In a confounding decision at the recent World Trade Organization (WTO) talks, the United States Trade Representative (USTR) withdrew key trade provisions that would establish ground rules for important twenty-first-century issues, such as cross-border data flows, data localization, and source code transfers.

This short-sighted decision risks undercutting America’s global technology leadership, stifling innovation and entrepreneurship, and handing China a crucial advantage at a critical juncture.

Digital trade is the lifeblood of the new economy, supporting millions of American jobs, accounting for 55 percent of U.S. exports of traded services, and contributing billions of dollars to our economy. Whether in finance, healthcare, manufacturing, retail, or transportation, digital connectivity enables companies large and small to access global marketplaces, collaborate across borders, and build the technologies of tomorrow.

For decades, the United States has led the world in innovation and has been at the forefront of the digital economy. This has been immensely beneficial to our businesses, workers, and overall economy. However, we cannot take our leadership position for granted. To ensure the United States maintains its standing, we must promote a fair and open global digital economy governed by rules that reflect our values and incentivize innovation and entrepreneurship.

That is why successive administrations—both Republican and Democrat—have rightly supported international rules enabling cross-border data flow, opposing mandatory local data storage, and preventing forced software source code transfers.

By retreating from these critical proposals, the USTR is undermining America’s position in shaping the digital rules of the road that will govern essential aspects of our economy. These rules will determine how data moves across borders, how businesses operate in the digital sphere, and how intellectual property is protected in the online world. The USTR’s decision to abandon these principles will leave the United States at a disadvantage in negotiating these crucial rules.