Tag: trade talks

Free Trade on the Internet

This is from a recent speech by Senator Ron Wyden (D-OR):

Today, the Internet represents the shipping lane of 21st Century goods and services. It is reshaping global commerce just like social media is reshaping societies. But right now the trade rules don’t neatly apply to the digital economy, despite the growing number of protectionist barriers popping up. The most recent WTO rules were written before the Internet.

It’s time for the digital economy to be within the Winners Circle by keeping data flows open and ensuring that foreign markets aren’t more legally hazardous than the U.S.

This is an important point. With regard to international trade in goods, the impact of the Internet has been significant, but only within certain limits. With the exception of goods for which electronic versions have been developed, you still need to make the goods at a factory and ship them around the world.  

With services, by contrast, the Internet revolution has been greater. A number of services that used to be difficult to trade internationally at all are now tradable with the click of a mouse. To use an example I’ve written about recently, online higher education services are taking off. Someday soon it may be just as convenient for a Washingtonian to get a degree from Melbourne University in Australia as it is to do so from Georgetown.

One problem, though, as Senator Wyden points out, is that many of our international trade rules were written in the pre-Internet era. This became apparent during the WTO dispute over online gambling. The rules could barely fit with this new industry.

Yawn, Another Round of “Free Trade” Talks

On Sunday, I went to the “stakeholder” part of the ongoing trade negotiations for the Trans Pacific Partnership. This round of the talks was held at the Lansdowne resort in Leesburg. The “stakeholder” events allow the public—in other words, people without direct access to the actual policy-makers—to have its voice heard.

Back in the late 1990s, trade negotiations caused quite an uproar, with some violent protests in Seattle being the highlight. Things are much calmer these days. I was told there was a protest on Sunday, but I didn’t notice it (and it didn’t disturb anyone’s attempts to catch up on the NFL games going on).

Why has the furor over international trade rules died down so much?

One reason may be that this is the 14th round of talks for this particular agreement, with no end in sight. There may be some protest fatigue setting in, and it may be getting difficult to convince people this is worth worrying about.

Another reason may be that we already have trade agreements with many of the participants in these talks. To some extent, it just consolidates existing agreements into a strange grouping of various countries that touch the Pacific Ocean. Thus, there is nothing radically new here.

Despite the low profile of trade protests these days, there are still people who are upset with the policies the United States is pursuing in these agreements. For the most part, however, it is not the “free trade” parts that are controversial. It is the United States’ quest for ever stronger intellectual property protections, as well as the special provisions that allow foreign companies to sue governments in international tribunals for vaguely defined due process-type concerns, that have people upset.

All in all, it is easy to come away from the experience thinking, what are we doing here and what happened to free trade? This agreement may never be concluded; it covers mostly countries with whom we already have trade agreements; and so-called “trade” agreements are becoming less and less about free trade. At a certain point, you start to think that it may be time to scrap the existing approach and try something new.