Tradeology, the ITA Blog

This post originally appeared on the Department of Commerce blog.

Guest blog post by Penny Pritzker, U.S. Secretary of Commerce and Andrus Ansip, Vice-President of the European Commission for the Digital Single Market  

Europe and the United States have a long history of deep political and economic ties. Our economic relationship is the largest in the world, with goods and services trade between us totaling about $2.7 billion a day.

It should come as no surprise that these linkages extend to the digital realm as well. In fact, $260 billion in digital services trade moves between the U.S. and the EU annually. Given these facts the U.S. and the EU have made stronger cooperation on issues related to the digital economy a top priority.

On both sides of the Atlantic, we already share the same goals. We want to ensure that digital technologies are helping to create jobs, generate growth, build thriving technology ecosystems that support startups and entrepreneurs, and ensure the protection of privacy and other public policy goals.

On Friday, March 11, we are meeting in Boston to further our work toward these critical aims. At the Massachusetts Institute of Technology, we will come together to exchange knowledge and insights on digital innovation. We will be joined by private sector leaders from both the U.S. and the EU, who will offer their views on how best to enable the growth of the digital economy.

We will discuss initiatives such as Europe’s proposal to build a Digital Single Market, which is an opportunity to fuel growth in Europe and in the trans-Atlantic digital economy. The EU’s vision of the Digital Single Market will tear down barriers to innovation, and create a welcoming climate for investors.

We will also discuss our recent political agreement on a new structure and arrangement to facilitate transatlantic data flows while strengthening the protection of personal data, the EU-U.S. Privacy Shield.

Looking to the future, it is clear that data will continue to be fundamental – whether we are talking about the Internet of Things, quantum technologies, apps, or e-commerce. Data is the basis of our digital future without borders, which presents new challenges that we are confident we can solve together.

The ability to transfer data easily, smoothly and securely worldwide is vital, but it is particularly important for the EU and the U.S., as data flows between us are the highest in the world. The EU-U.S. Privacy Shield is an important milestone for all of these reasons.

Nobody would deny that these have been lengthy and difficult negotiations, given the legally complex and politically sensitive exercise we undertook.

Partners on both sides of the Atlantic worked around the clock to finalize a framework that provides certainty to help grow the digital economy by ensuring that thousands of European and U.S. businesses and millions of individuals can continue to access services online. In the end, we achieved a strong agreement that enables transatlantic commerce while safeguarding privacy. Both partners will work to make sure that people’s privacy will be fully protected and that we are fit for the opportunities of the digital age.

The Privacy Shield is a robust new framework that offers significant improvements over the previous scheme. And it is a ‘living mechanism’ which will be continuously monitored and reviewed on an annual basis.

Work to make the Privacy Shield a reality has started on both sides of the Atlantic. In Europe, discussions with the EU’s 28 national governments and data protection authorities are entering a crucial phase.

Working together, we will strengthen trust and confidence in the online world. It is what will drive our digital future – building on our longstanding history of trust, cooperation, and mutual understanding to further the global digital market.

Stefan Selig is the Under Secretary for the International Trade Administration

This week, I had the opportunity to speak before the Washington International Trade Association (WITA) at their event “What Will TPP Mean for Services Trade?” So I used this opportunity to go even further.

First, I explained what our services exports have meant for the American economy as a whole. The U.S. is currently the leading exporter of services in the world. But more importantly, over the past 20 to 25 years, as the global marketplace for services developed, we have experienced the job and export growth that came with maintaining and deepening that leadership. Between 1999 and 2014, U.S. jobs supported by services exports increased by 36%, and services accounted for 70% of the total increase in jobs supported by exports during this period. Today, more than 4.5 million jobs are supported by services exports, and last year we exported more than $710 billion in services. Overall, our services sector produces surpluses year after year after year.

Selig speaks with WITA about TPP and U.S. service exports.

I also explained what TPP means for American leadership. As I have said over the course of my time as Under Secretary, trade is not a threat to American leadership, it is an expression of it. TPP will allow us to expand our commercial leadership by opening market access for our goods and services in the part of the world where the majority of global middle class will be located within the next 15 years. It will allow us to expand our strategic leadership by advancing rules of global commerce that reflect our core values, embodied in the strongest labor, environmental, and intellectual property protections of any trade agreement in history. And, TPP will allow us to grow our strategic and diplomatic leadership, because it will enable our nation to deepen our relationships with countries in the Asia-Pacific, the area that is becoming both the political and economic center of gravity in the world.

Of course, I also answered the topic question of the event. For our services exporters, TPP is nothing short of a generational opportunity. TPP is a generational opportunity compared to earlier agreements, particularly the General Agreement on Trade in Services (GATS). Because TPP utilizes a negative list approach, as opposed to GATS with its positive list approach, U.S. services exporters will enjoy a superior breadth of coverage and superior quality of commitments for market access. And TPP contains several advancements relative to GATS and our other free trade agreements, which will better combat “behind-the-border” regulations that impede our services exporters. TPP is also a generational opportunity in that it is the first major trade agreement of the digital economy era. TPP positions our digital services exporters to gain market access in such sectors as network management, internet search, data analytics, and cloud computing among others. And TPP is a generational opportunity for our services exporters to access a $600 billion services market among our partner countries. That market will only grow as nearly half of global economic growth will be in the Asia-Pacific in the next 20 years.

Our services sector has been a backbone of our economy, supporting good-high paying jobs. In order to ensure this will continue, we need to do everything we can to make sure TPP becomes a reality during this administration.  That includes the organization I lead, the International Trade Administration (ITA), which supported the negotiations to close TPP, and which is working with members of Congress to secure its passage.

ITA is committed to creating opportunities for U.S. workers and businesses by promoting international trade and business investment, and by fostering a level playing field for American businesses. With offices in more than 100 U.S. cities and 75 international markets— including 170 Commercial Service officers in all 11 TPP markets—we are available to help U.S. companies succeed in the global marketplace.

Sergio Delgado is the International Trade Specialist in the Office of Health & Information Technologies

One of the larger trade categories, Information and Communication Technology (ICT) Goods includes optical fibers, audio-video equipment, television reception apparatus, coaxial cable, and batteries, in addition to those items covered by the World Trade Organization’s Information Technology Agreement, whose coverage was recently expanded to include over 200 new product categories. These items range from machines that bring the Internet into our homes; entertainment to our televisions, radios, and mobile devices; processing power to cash registers and point of sale systems; all the way to the crucial technologies needed to help teach children across the world.

Technology plays a critical role in both economic growth and job creation in the United States.

The use of digital products has increased at a rapid rate within the last decade. Essentially, these are the every-day items that connect us to each other, across America and around the world. The TPP creates a huge opportunity to increase the export of American-made ICT goods, and the digital services they enable, to our partners overseas.

In 2014, $9.7 billion in U.S. ICT goods were exported to new TPP countries, where they faced tariffs up to 35 percent, putting made in America goods at a disadvantage in comparison to other countries. U.S. exporters also face border delays and customs inefficiencies that increase costs and impede the flow of U.S. exports throughout the region.

A few months ago, leaders from across the Asia Pacific completed negotiations for the Trans-Pacific Partnership (TPP) to combat these trade barriers.  This historic agreement not only benefits American businesses, but also facilitates access to reliable, well-made American products for consumers throughout the region – improving the lives of our neighbors abroad.

This agreement is crucial to American businesses and workers. In 2014, twenty states across the country exported more than $700 million in ICT goods to TPP markets alone. That same year, the sector employed more than 700,000 American workers.

President Obama recognizes that technology plays a critical role in both economic growth and job creation in the United States. In 2011, speaking at the National Innovation and Growth Conference the President stated “We have to do everything we can to encourage the entrepreneurial spirit, wherever we find it. We should be helping American companies compete and sell their products all over the world. We should be making it easier and faster to turn new ideas into new jobs and new businesses. And we should knock down any barriers that stand in the way. Because if we’re going to create jobs now and in the future, we’re going to have to out-build and out-educate and out-innovate every other country on Earth.”

Once enacted, TPP will reduce the cost of exporting, increase the competitiveness of U.S. goods, and promote fairness and transparency in trade among the participating countries. The TPP provisions that promote trade in digital products (e.g., software, music, video, e-books) as well as e-commerce generally also benefit the ICT goods industry, which makes the equipment that enables global trade via the Internet.

To learn more about how this historic agreement benefits U.S. workers and businesses visit us on the web or contact one of our local offices.