WASHINGTON : U.S. Trade Representative Katherine Tai has dropped longstanding U.S. digital trade demands in World Trade Organization talks in order to give Congress room to regulate big tech firms, her office said on Wednesday.
The U.S. is withdrawing proposals made in 2019 by the Trump administration insisting that WTO e-commerce rules allow free cross-border data flows and prohibit national requirements for data localization and reviews of software source code.
The decision angered some lawmakers and business groups, who said it would put U.S. firms at a disadvantage.
The withdrawals were made in Geneva during a meeting of the WTO's Joint Statement Initiative on E-Commerce, with a U.S. official saying that the U.S. was reviewing its approach to trade rules in sensitive areas such as data and source code.
The official said U.S. policy must take into account regulatory objectives, "balancing the right to regulate in the public interest and the need to address anticompetitive behavior in the digital economy," according to a transcript seen by Reuters.
The USTR move aligns with the Biden administration's desire to strengthen regulation of large technology firms and the direction of digital trade negotiations in the U.S.-led Indo-Pacific Economic Framework for Prosperity (IPEF) group of Asian countries.
'WIN FOR CHINA'
But Senator Ron Wyden, the Oregon Democrat who leads the Senate Finance Committee, called the move "a win for China, plain and simple," saying it would strengthen the Chinese model of internet censorship and government surveillance.
"USTR’s unilateral decision to abandon any leverage against China’s digital expansionism, and to oppose policies championed by allies like Australia, Japan, the U.K. and Korea, directly contradicts its mission as delegated by C ..
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