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Tech Firms Warn About Global Threat of Digital Protectionism Tech Firms Warn About Global Threat of Digital Protectionism

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TECHNOLOGY

Tech Firms Warn About Global Threat of Digital Protectionism

U.S. technology firms are urging the Obama administration to stop foreign countries from blocking global Internet commerce under the pretense of national security.

Google and Microsoft joined the nonprofit National Foreign Trade Council on Thursday to release policy recommendations aimed at thwarting "digital protectionism," presumably in countries such as China.

 

"A number of countries have already enacted or are pursuing restrictive policies governing the provision of digital commercial and financial services, technology products, or the treatment of information to favor domestic interests over international competition," the council's objectives stated.

Increasingly, repressive governments such as China, Vietnam and Pakistan are cutting off connectivity to Facebook and Twitter, and as a result, potential U.S. advertising revenue. But the U.S. dollars at stake extend beyond money from tools that facilitate political dissension to sales from Web services. Those services include, for instance, online retail, search engines and remote-computing through cloud providers. The restrictions vary, some limiting information exchange to U.S. firms that open offices in foreign countries; others barring financial services firms from accessing customer information stored abroad; and still more banning Web transactions with American-owned businesses altogether.

The council said it empathizes with foreign countries that constrict data flows for security purposes, in certain cases, but argued that those restrictions must be well-defined and consistent.

 

"Even where policies are designed to support legitimate public interests such as national security or law enforcement, businesses can suffer when those rules are unclear, arbitrary, unevenly applied or more trade restrictive than necessary to achieve the underlying objective," the document stated.

To enforce the guidelines, the council proposed that the administration seek commitments from trading partners through the World Trade Organization, Asia Pacific Economic Cooperation and other international forums. In the meantime, the White House should settle disputes over current digital goods policies through the WTO, the council recommended.

"Secure and reliable access to the Internet and technologies is essential to creating jobs and economic growth in the 21st century economy," the council's Vice President Jake Colvin said in a statement.

Putting the problem into context, he said, "Trade rules were written to ship widgets rather than bytes."

 

The Software and Information Industry Association, which represents cloud providers, backed the group's remedies for digital protectionism.

"We are urging the U.S. government to identify these practices as violations of international rules and resolve them through WTO or bilateral consultations," the association's president, Ken Wasch, said in a statement.

Vice President Joe Biden, speaking Nov.1 at the London Conference on Cyberspace, touched on the problem, saying countries attempting to stifle domestic opposition online are also hurting the global economy.

"Those countries that try to have it both ways by making the Internet closed to free expression but open for business will find that this is no easy task," he said. "They may try to build walls between these different activities, but there isn't a separate economic Internet, political Internet and social Internet. They are all one. It's simply the Internet."

He warned other countries that "when businesses consider investing in a country with a poor record on Internet freedom, and they know that their website could be shut down suddenly, their transactions monitored, their staffs harassed, they'll look for opportunities elsewhere."

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