The California Chamber of Commerce has joined the U.S. Chamber and over 150 state and local chambers from 45 states in urging the Biden administration to support strong digital trade rules approved by Congress in past trade agreements. The request was made in a June 12 letter to the White House National Security Council and National Economic Council.
Digital trade supports more than 3 million U.S. jobs across various sectors, including services, manufacturing, arts and entertainment, and agri-business. Companies rely on the digital economy for customer outreach, sales, operations management, research coordination, compliance strengthening, and secure payments.
Over the years, the United States and its allies have negotiated agreements such as the U.S.-Mexico-Canada Agreement (USMCA) to support cross-border data flows and defend against digital protectionism. These agreements protect U.S. companies from unfair treatment.
In October 2023, the U.S. Trade Representative (USTR) reversed longstanding U.S. support for digital trade rules, which risks undermining U.S. leadership and threatens global competitiveness. Officials announced the withdrawal of proposals on data flows, data localization, and source code from World Trade Organization (WTO) negotiations on e-commerce to allow policy debates on digital trade to unfold.
The U.S. Chamber emphasized that digital trade rules “form a breakwall against the rising tide of global digital protectionism.” Strong rules prevent countries from using regulation to exclude U.S. companies from their markets.
Digital trade rules have opened international markets for various sectors reliant on global services and technology providers; helped small businesses access new markets; and advanced exports of digitally-delivered services which accounted for over 67% of all U.S. services exports in 2022.
A report by the U.S. Chamber outlined how digital trade benefits each state’s economy with specific breakdowns by congressional districts. In California alone:
– 655,128 jobs depend on digitally tradable exports;
– The value of these exports exceeds $142 billion;
– Between 2013 and 2022, these exports grew by 64%.
Europe was California’s top market for digitally tradable services in 2022 followed by Asia-Pacific economies excluding China. The top services included research/testing services; business consulting; royalties from industrial processes; financial advisory; and software royalties.
These figures underscore California’s need for a robust digital trade deal as emphasized by CalChamber President Jennifer Barrera in August 2022 when she recommended negotiating an enforceable agreement with key partners sharing similar ambitions.
Returning to previous strong support for digital trade rules would be an important step forward.
