Delay of new trade deal harms America’s digital advantage

When folks back home in North Carolina hear the words “digital economy,” they usually picture a computer programmer in Silicon Valley or a whiz kid creating an iPhone app in their parent’s basement. And they’re not wrong! Those scientists and inventors play a critical role in the digital economy. Yet in recent years, digital trade and commerce has exploded into one of the most important and impactful sectors of America’s economy.

Today, nearly six out of 10 American jobs created by exports of digital services are jobs outside the tech industry. Sectors like agriculture, health care, and manufacturing make up a large part of the 5 million total jobs and $1.35 trillion in annual productivity of the digital economy, according to the Internet Association.

As a result, it is now more important than ever to ensure the rules of the road on the digital highway are modernized and clear. That’s why President Trump and U.S. Trade Ambassador Robert Lighthizer spent countless hours negotiating the creation of a new “digital chapter” in the updated proposed trade agreement with Mexico and Canada – the U.S.-Mexico-Canada Free Trade Agreement (USMCA).

The USMCA includes a host of new benefits for American workers, families, and the economy. And the changes impacting the digital economy are among the most important.

It will, for the first time, prohibit the imposition of customs duties, fees, or other charges on digital products traded electronically. It will also safeguard cross-border data flows. USMCA is the first trade agreement to ensure the free flow of data for all sectors. Businesses of all sizes, across all sectors, will benefit from the free and safe flow of information.

The trade pact prohibits data localization requirements that force businesses to use or locate computing facilities in a specific country or territory as a condition for conducting business.

Additionally, USMCA streamlines customs processes to support e-commerce. As the digital economy continues to evolve and grow, modernizing the mechanics of how goods flow between countries in North America is critical. The new agreement will help speed the growth of e-commerce.

Finally, as this sector continues to evolve and expand, enhanced data protection becomes even more important. The proposed agreement encourages, for the first time, data privacy and cybersecurity collaboration. USMCA requires all three countries to adopt measures to comply with each other’s data privacy laws. USMCA also promotes a collaborative, risk-based approach and adoption of industry best practices to keep networks and services secure.

These new digital provisions and protections are both timely and important.

A lot has changed in the 25 years since NAFTA was signed into law. Back then, folks didn’t have cell phones, internet access required a dial-up connection, and movies had to be rented in VHS format.

Today, we live in an interconnected world driven by rapidly evolving digital technologies and capabilities. We do our work on lightning-fast computers, interact through mobile phones, and buy goods with a single click.

These changes have benefited workers and consumers across every sector. It has created countless jobs and grown wages, all while improving Americans’ day-to-day lives. It has made it easier for farmers to find customers, leading to increased revenue and production. It has overhauled logistics entirely, empowering manufacturers across the country to be able to expand and grow, and it is even forcing health care providers to adapt to new standards.

Imagine the potential if we can make our digital economy even more competitive on a global scale – making our products more affordable while simultaneously expanding markets for our local job creators. That is what USMCA sets out to achieve. And that’s why the agreement’s new digital provisions are so important.

Yet, unfortunately, USMCA is currently being held hostage by the partisan political circus in Washington. Delaying approval of the trade pact hits the pocketbooks of the workers and families in North Carolina and across the nation. Folks across all sectors – from farmers and factory floor workers to programmers and engineers – are losing out.

Far too much hangs in the balance. USMCA will lead to more jobs, larger paychecks, and cheaper prices for American consumers. It provides a much-needed foundation for the expansion of free and fair digital trade and investment in innovative products and services. And it creates a framework for a cutting edge, 21st-century economy.

It’s time for Washington to buck up and get this agreement over the finish line. We have before us a once in a generation opportunity to define a new global standard in digital trade, one that positions the United States as the world leader in the digital economy. 

We can’t afford to let it slip away.

Congressman George Holding represents North Carolina’s 2nd District. Mr. Holding serves on the Ways and Means Subcommittees on Trade and Health.