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Fair Digital Trade is Key to America’s Economic Future

The opinions expressed by columnists are their own and do not necessarily represent the views of
(AP Photo/Wilfredo Lee)

When discussing international trade, many people may think of a massive cargo ship carrying steel containers across the ocean. But as with so much else in the 21st century, international trade is going digital. Increasingly, goods, services, and money are flowing between countries in the ether, rather than on the high seas.


President Trump has made reforming American trade policy a top priority of his administration, and over the rest of his presidency, there’s no doubt he will continue striking bold new trade deals that help keep our economy strong. With each new deal, it is essential that digital trade be protected and strengthened, so that American companies and small businesses can continue innovating and creating jobs here at home.

This is vitally important. The internet, since its inception, has had a tremendous effect on the growth and health of the entire U.S. economy – not just what you might think of as the “tech industry”.

According to the Bureau of Economic Analysis, “From 2006 to 2016, BEA estimates that digital economy real value added grew at an average annual rate of 5.6 percent, outpacing the average annual rate of growth for the overall economy of 1.5 percent.” In other words, the digital economy grew almost four times as fast as the overall economy. By 2016, the digital economy accounted for 6.5% of our nation’s GDP.

U.S. digital trade policy has made it easier for American companies and small businesses to innovate and sell their products around the globe. It’s created new job opportunities, made it easier to run a small business, and boosted the quality of life for each and every one of us.


That’s because American internet companies lead the world in innovation, having built a $172 billion digital trade surplus in 2017. A surplus like that is a major boon to our entire economy, from the largest manufacturers to any mom-and-pop on main street.

Digital trade means that small manufacturers, retailers, and innovators can reach markets around the world. Beyond simply giving these companies the ability to reach new customers beyond main street, online reviews are an invaluable way for U.S. exporters to show new markets they offer amazing, “made in the USA” products.

Those success stories are happening in every community in every corner of America right now. Our digital trade leadership helps every entrepreneur unleash their potential. Online sales can mean the difference between success and failure for an American main street retailer during the winter, when foot traffic falls off.

But the rest of the world wants to take this success from us, as some countries aren’t playing nice when it comes to international digital trade. Many, in an effort to undermine America’s digital dominance, have been enacting policies that target American internet companies. And by targeting U.S. internet companies, they also hurt the thousands of other American businesses that use the internet to compete and sell their products.


The European Union, for example, is pushing a new digital framework that would impose taxes and rules on digital companies seeking to do business there. This framework unfairly targets American internet businesses with taxes and regulations

In addition, China, Russia and other nations have been moving to restrict the free flow of data between borders in recent years. This forces international internet companies – specifically American companies – to store and process all data within that country’s borders that was collected in that country. The effect is an onerous, expensive, and unnecessary burden on American internet companies, and the other business that rely on their products, that hinders their ability to do business efficiently overseas. If online platforms can’t reach these markets, the small businesses using those platforms can’t either.

This underscores the need for more trade deals that push back against such unfair practices by our trading partners.

The Trump administration took a huge step forward in this effort with the United-States-Mexico-Canada-Agreement (USMCA). The USMCA ensures that data can flow freely between the member countries, meaning American companies and small businesses can conduct more business and contribute to our economy. It also includes strong copyright and intermediary liability protections reflective of U.S. law.


But there’s more work to be done. As the world continues to digitize, it is essential that America remains the global leader in digital innovation – which means we must continue to have fair digital trade policies that encourage innovation.

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