U.S. Shift on Global Tech Rules Jeopardizes Effort to Counter China
WASHINGTON—The Biden administration’s abrupt shift on global technology rules has weakened a critical Asia trade agreement that was intended to help counter China’s growing clout in the region. Rules facilitating digital trade, including the cross-border transfer of data on customers and supply chains, were expected to be a centerpiece of what is called the Indo-Pacific Economic Framework, or IPEF, a U.S.-led group of 14 nations. But the U.S.
recently withdrew its support for those provisions, a decision that cut against the desires of some Asian allies who see common rules governing business data as a cornerstone building block for economic cooperation. The move has also angered U.S. business groups who favor the free flow of data to boost the digital economy.
More than 40 business groups wrote to top administration officials last week saying the U.S. retreat on digital trade signals to U.S. trading partners that the Biden administration won’t defend American companies against data restrictions that impede their businesses, and would allow autocratic governments like China to set the rules of engagement.
“It will advance the interests of our adversaries," said signatories including the U.S. Chamber of Commerce, the National Association of Manufacturers, the Securities Industry & Financial Markets Association, as well as the Motion Picture Association. Free cross-border flows of data allow companies in technology, manufacturing and finance to easily access supply-chain and customer data, lowering costs.
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