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USTR highlights key barriers to digital trade

The Office of the United States Trade Representative has published the factsheet on the 2020 National Trade Estimate. It identifies a series of key barriers to digital trade that countries around the world have imposed.

Barriers to digital trade threaten the ability of all firms – including small businesses – to benefit from the advantages of the digital economy.  When governments impose unnecessary barriers to cross-border data flows or discriminate against foreign digital services, local firms are often hurt the most, as they cannot take advantage of cross-border digital services that facilitate global competitiveness”, the document reads.

Among these barriers as identified by the USTR are China’s restrictions on cross-border data flows and data localisation requirements, as well as the country’s Cloud Computing Restrictions, and web filtering and blocking of legitimate websites.

India, Kenya, Nigeria, Saudi Arabia, Turkey and Russia are also highlighted for their data localisation requirements. Vietnam’s restrictions on online video services and Indonesia’s tariffs on digital products are also included.

Importantly, the digital services tax is also considered a key barrier to digital trade, and all the countries that have implemented or expressed an intent to implement a DST are named, including France, Austria, Czech Republic, Italy, Spain, Turkey and the UK. The message is clear: “The United States opposes proposals that single out digital services for tax purposes. In addition, to the extent that these proposals are aimed at US companies, they raise concerns about discriminatory effects of US suppliers”. As techUK has argued in the past, we believe a multilateral outcome, in the context of the OECD negotiations, is the only viable solution to this dispute.

In view to the upcoming UK-US free trade negotiations, we are working closely with the government to put sound digital trade principles at the heart of the future FTA. Should members have any questions, please reach out to Sabina Ciofu.


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