Digitrade Digest #6

U.S. Drops Digital Tax Demand, Opening Door to Global Deal, Commission sets course for an open, sustainable and assertive EU trade policy, EU and UK move towards frictionless digital trade & transfers

The Digitrade Digest delivers the latest developments in global digital trade right to your inbox every week. To get the news as it happens, follow us on Twitter @DigiTradeDaily.

If you’d like to get more involved in the discussion and collaborate with your fellow readers, head over the Digitrade Slack and introduce yourself!

Join us on Slack

Digitrade Headlines

U.S. Drops Digital Tax Demand, Opening Door to Global Deal

Bloomberg: “The U.S. has dropped a key demand in negotiations over digital taxation of technology companies such as Alphabet Inc.’s Google and Facebook Inc., lifting a barrier that had raised transatlantic trade tensions and prevented an international deal.

Treasury Secretary Janet Yellen told her counterparts at a virtual meeting of Group of 20 finance officials that the U.S. is no longer calling for a so-called safe harbor rule that would allow U.S. companies to opt out of paying such a tax overseas, according to a Treasury spokeswoman.

Yellen said the U.S. will now engage robustly in negotiations on both that issue and on a global minimum tax, the spokeswoman said.”

Commission sets course for an open, sustainable and assertive EU trade policy

EU Commission: “Speaking about the new strategy, Executive Vice-President and Commissioner for Trade, Valdis Dombrovskis, said: “The challenges we face require a new strategy for EU trade policy. We need open, rules-based trade to help restore growth and job creation post-COVID-19. Equally, trade policy must fully support the green and digital transformations of our economy and lead global efforts to reform the WTO. It should also give us the tools to defend ourselves when we face unfair trade practices. We are pursuing a course that is open, strategic and assertive, emphasising the EU's ability to make its own choices and shape the world around it through leadership and engagement, reflecting our strategic interests and values.”

Responding to current challenges, the strategy prioritises a major reform of the World Trade Organization, including global commitments on trade and climate, new rules for digital trade, reinforced rules to tackle competitive distortions, and restoring its system for binding dispute settlement.”

U.S. partners in Asia may not wait around as Biden prioritizes domestic issues

CNBC: “I don’t think CPTPP is the only avenue for U.S. engagement in the Asia-Pacific,” [Wendy] Cutler said, adding that the Biden administration could focus on issues such as climate change, digital trade and making supply chains more secure as a start.

“I think that’s the way we should be looking at the region now because I think it’s a way to get us back in there without trying to pursue a big comprehensive agreement that we’re not prepared to do for domestic reasons,” she said.

EU and UK move towards frictionless digital trade and transfers

ProPrivacy: “The EU has decided to push forward with a decision to grant the UK something called 'adequacy' status. A draft of this decision was released on February 19.”

The Commission arrived at their decision to push forward with the adoption of this decree after the Commission's assessment determined that the UK ensures virtually the same protections and privileges as the EU's GDPR regulation and Law Enforcement Directive does. 

Another factor in the Commission's decision is the fact the UK has remained party to the European Convention of Human Rights as well as Convention 108 of the Council of Europe, which the EU dubs "the only binding multilateral instrument on data protection" and is one of the first pieces of legislation that seeks to prevent individuals from experiencing harms born out of data abuse.”

Global Telecom and Tech Companies Fail to Address Digital Rights Of Users, Says New Report

The Wire: “The 2020 Ranking Digital Rights (RDR) Corporate Accountability Index, released on Tuesday evening, notes that none of the 26 companies that it ranks “came even close to earning a passing grade on our international human rights-based standards of transparency and accountability”.

“The most striking takeaway is just how little companies across the board are willing to publicly disclose about how they shape and moderate digital content, enforce their rules, collect and use our data, and build and deploy the underlying algorithms that shape our world,” Amy Brouillette, senior research manager of the RDR project, noted.

“We continue to see some improvements by a majority of companies in the RDR Index, and found noteworthy examples of good practice. But these things were overshadowed by a wealth of evidence showing what so many advocates and experts warn is a systemic crisis of transparency and accountability among the world’s most powerful tech giants.”

Mexican proposal to regulate social media companies sparks USMCA concerns

Inside U.S. Trade: “Proposed Mexican legislation that would require operating licenses for social media platforms and regulate content moderation practices could violate U.S.-Mexico-Canada Agreement rules on non-discrimination, intermediary liability and cross-border data flows, according to industry sources.  

Ricardo Monreal, the Senate leader of Mexico’s ruling National Regeneration Movement (MORENA), earlier this month published a proposal for a bill that would obligate social media platforms with more than a million users to request authorization from the Instituto Federal de Telecomunicaciones, Mexico’s telecoms regulator, to continue providing services in the country. It would also require that social media companies clear with regulators any revisions to their terms of service before adopting them.

In addition, the proposal would create a mechanism for users to dispute platforms’ decisions to remove content or accounts by appealing to the IFT and allow the government to fine companies for violations of the proposed rules.”

The Digitrade Digest is a weekly publication of the Digital Rights group at Public Citizen.