Members of the Joint Economic Committee (JEC) held a hearing last week to discuss the importance of free digital trade to the U.S. economy and how to better facilitate digital trade for American businesses, particularly overseas.
JEC Vice Chair Mike Lee (R-UT) said advancements in technology allow digital trade to deliver ongoing improvements in production and distribution.
“American consumers and businesses greatly benefit from the ability to buy and sell across borders and gain access to new products and customers. We are swiftly approaching the point where the word ‘digital’ will be an unnecessary adjective for trade,” Lee said at the hearing, entitled “The Dynamic Gains from Free Digital Trade for the U.S. Economy.”
Congress should ensure that sensible regulations and standards are put in place for the protections of intellectual property and private information, Lee added.
Rep. Erik Paulsen (R-MN), the co-chair of the Bipartisan House Digital Trade Caucus, said that digital trade is no longer a niche sector.
“There are hundreds of thousands of U.S. small businesses in nearly every sector, from manufacturing to financial services to mining to agriculture and food, in every single state and every single Congressional District across the country that are harnessing the power of the internet and new technology to reach new customers around the world,” Paulsen said. “Digital trade accounts for more than half of all U.S. service exports. Digital trade is responsible for nearly 6.7 million American jobs.”
Daniel Griswold, senior research fellow and co-director of the Program on the American Economy and Globalization at the George Mason University’s Mercatus Center, explained that advancing digital trade technology helps the American economy expand.
“By reducing costs, spurring competition, and expanding markets, digital trade creates gains that fuel productivity,” Griswold said. “By playing to America’s competitive strengths, digital trade allows us as a nation to use our physical, intellectual, and human capital in ways that permanently boost our gross domestic product and general living standards,”
Testimony also centered around foreign barriers to trade facing American companies. The United States has made progress removing foreign barriers to digital trade, but there is an opportunity to improve existing trade law to enhance digital trade, Sean Heather, vice president of the Center for Global Regulatory Cooperation at the U.S. Chamber of Commerce, said.
“[North American Free Trade Agreement ] NAFTA modernization represents an opportunity to get the rules right. [United States – Korea Free Trade Agreement] KORUS was a good start in the digital age. [Trans-Pacific Partnership] TTP built on that. But there are always new questions emerging in the policy space,” Heather said.
Nick Quade, general manager of the Ecommerce Division of Relay Networks said that while his company doing well competing overseas, others are not because of the barriers they face.
“I know specifically businesses that are involved in digital trade that simply don’t offer their products internationally because they simply don’t want to deal with [the barriers],” Quade said. “That frankly hurts those companies because if … we can simplify these [rules], we can ship products that no longer have a market in the United Sates out of the United States and bring money back in.”