Digitrade Digest #22
US creates more waves in China with its digital trade proposal, Britain's trade talks with US and South East Asian countries
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US
US-led digital trade proposal heats up new friction with China
i Asia: A U.S. initiative for a digital trade agreement to deepen ties with Asian economies faces an uncertain outcome as some countries in the region fear provoking a confrontation with China, which sees the deal as an attempt to encircle it.
Chinese President Xi Jinping took a veiled swipe at the Biden administration initiative during a regional summit last month.
Nations should "work for a digital business environment that is open, fair and non-discriminatory," Xi said in a prerecorded speech played at the online summit of leaders from the 21-member Asia-Pacific Economic Cooperation bloc on July 16. "Exclusion, confrontation and division would only lead to a dead end," he said.
Washington's proposal includes Japan, South Korea and nations from Oceania and Southeast Asia in a pact meant to ensure free exchange of digital information. Notably excluded from this list is China.
Foreign Ministry spokesperson Zhao Lijian on July 13 called the idea a "plot to gang up against China and contain its development and obstruct the common development of countries in the region." Zhao said such a plan was "doomed to fail."
Some had expected U.S. President Joe Biden to explain the idea at the APEC leaders' summit, but he made no clear reference to any agreement.
Asia Digital Deal Raises Hope U.S. to Rejoin TPP Successor
Bloomberg: The digital pact would be an early effort by the Biden administration to present an economic plan for the region after Trump’s decision to withdraw from negotiations for the trade deal in 2017. Tehan said he’d had “very good meetings” with U.S. lawmakers about the digital pact.
“Let’s take one step at a time and create the bipartisanship for a digital trade agreement in the Indo-Pacific region and if we can take that first step, hopefully we could look at a second step, which would be TPP membership by the United States,” Tehan said.
The 11 countries in the CPTPP say it remains open to all applicants. China is now pushing ahead with behind-the-scenes talks to join the pact, which at one time was envisioned to cement U.S. economic power and trade ties in the region.
U.S.-Asia Digital Pact Held Up by Squabble Among Biden Officials
The Wall Street Journal: A skirmish between national security and trade officials in the Biden administration is hindering efforts to forge a digital-services pact with Asian countries, according to people involved in the talks.
National Security Council and State Department officials want to set rules for digital trade in Asia, which could include cross-border flows of information, digital privacy and standards for the use of artificial intelligence in Asia, the people said.
The proposed pact would be open to U.S. allies in the Asia-Pacific region. It would exclude China, similar to the approach the administration has taken on issues such as export controls on advanced technology. The U.S. has tried to put together alliances that would set standards in Asia, as a way of limiting Chinese influence.
U.S. Trade Representative Katherine Tai has urged an approach that recognizes potential opposition from congressional Democrats and labor allies, said people familiar with their thinking. She is concerned about setting priorities in trade policy and maintaining what she calls a “worker-centered” approach.
A digital pact could be seen as a boon for internet giants such as Amazon.com Inc. and Alphabet Inc.’s Google, which benefit from the unimpeded flow of data across borders. Ms. Tai has focused her efforts so far on issues such as union rights in Mexico and forced labor.
UK
UK's trade minister to meet U.S. counterpart on free trade threats
Reuters: Britain's international trade minister Liz Truss will discuss how to tackle threats to free and fair trade with U.S. Trade Representative Katherine Tai during a five-day visit to the United States from Sunday.
"I’m visiting the U.S. to build on the progress we’ve already made on tackling market-distorting practices that threaten the future progress and prosperity we can make around the world through free and fair trade," said Truss.
She will also travel to the West Coast to meet businesses in a bid to promote Britain as a destination for tech investment.
Britain and the United States had started talks on a post-Brexit bilateral free trade deal while former President Donald Trump was in office but failed to reach an accord before Joe Biden entered the White House in January.
"Truss will speak with leading Democrats and the tech industry about how a future UK-US free trade agreement can set gold-standard rules on digital trade," the international trade ministry said in a statement.
Britain granted 'dialogue partner' status by Southeast Asian bloc
Reuters: ASEAN includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. The group has close diplomatic relations with other world powers including the EU, the United States and China, and is seen by many as an important forum for discussion of geopolitical issues.
The United States sees ASEAN as key to its efforts to stand up to China's growing influence in Asia. read more
But the group, whose members are bound by a code not to interfere in each other's affairs, has recently come in for criticism by some of the region's politicians and rights activists for being little more than a talking shop.
Becoming a dialogue partner gives Britain high-level access to ASEAN summits. The British government hopes it will also spur deeper practical cooperation on issues like climate change and regional stability.
Britain has also applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a trade agreement it hopes will open up new markets for goods and services and strengthen existing commercial links.
The Digitrade Digest is a weekly publication of the Digital Rights Program at Public Citizen.