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NFTC, U.S. Business Community Leaders Roll Out Effort to Modernize Global Trade Rules on Cross-border Data Flows
Date: 11/3/2011
Written By: Jennifer Cummings, The Fratelli Group for NFTC, (202) 822-9491

Washington DC – The National Foreign Trade Council (NFTC) today released a set of U.S. business community policy priorities for modernizing the international trade rules and practices governing cross-border flows of data and information technologies in conjunction with other leading trade associations and some of the nation's most innovative companies.

"Trade rules were written to ship widgets rather than bytes," said NFTC Vice President Jake Colvin. "The Internet and networked technologies have created new ways of delivering products and services and entire new industries that spur economic growth and create jobs, but which also pose new challenges for the trading system."

Individuals and businesses would benefit from a more consistent and transparent framework for the treatment of cross-border flows of goods, services and information. As the principles note, "Access to computers, servers, routers and mobile devices, services such as cloud computing…and information is vital to the success of billions of individuals, businesses and entire economies. In the United States alone, the goods, services and content flowing through the Internet have been responsible for 15 percent of GDP growth over the past five years."

"Secure and reliable access to the Internet and technologies is essential to creating jobs and economic growth in the 21st Century economy," said Colvin. "It's not just IT companies who rely on cross-border data flows in the digital age. Manufacturers, accountants, universities, labs, NGOs – you name it – depend on digital goods and services. In order to create jobs and permit the digital economy to function and grow, countries need to make sure global trade rules governing information flows are up to date."

The policy priorities were developed by a core group of associations and companies through a process convened under the National Foreign Trade Council. A variety of America's leading companies including Citi, Google, IBM, Mastercard, Microsoft and Visa joined NFTC and other associations including the Business Software Alliance, Coalition of Services Industries, Software & Information Industry Association and U.S. Council for International Business to craft the document.

They write:

"Economies that are open to international trade in information and communication technologies and information grow faster and are more productive than countries which close their borders to them…Studies show that networked technologies –hardware and software linked together via the Internet – contribute significantly more to economic growth than technology products that are not connected. Limiting network access dramatically undermines the economic benefits of technology and can slow growth across entire economies…

"Despite the widespread benefits of cross-border data flows to innovation and economic growth, and due in large part to gaps in global rules and inadequate enforcement of existing commitments, digital protectionism is a growing threat around the world. 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 U.S. Government should seek international commitments on several key objectives, including: prohibiting measures that restrict legitimate cross-border data flows or link commercial benefit to local investment; addressing emerging issues involving the regulation of the digital economy; promoting industry-driven international standards, dialogues and best practices; and expanding trade in digital goods, services and infrastructure."

To read the full text of the policy priorities, click here.


About the NFTC
Advancing Global Commerce for Nearly A Century- The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.
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