News / Economy

Report: US Boosted by Digital Trade, but Barriers Remain

FILE - The new Google Nexus 7 tablet, made by Asus is displayed during a Google special event at Dogpatch Studios in San Francisco, California, July 24, 2013.
FILE - The new Google Nexus 7 tablet, made by Asus is displayed during a Google special event at Dogpatch Studios in San Francisco, California, July 24, 2013.
Reuters
A new U.S. government report on Thursday highlighted both the growing importance of digital trade to the United States and a long list of trade barriers that American internet and other online companies face around the world.
 
“The increase in digital trade is having a significant impact on the U.S. and global economy,” the U.S. International Trade Commission (ITC) said in the first of two reports on the issue requested by Senate Finance Committee Chairman Max Baucus at the urging of Senator Ron Wyden, both Democrats.
 
“This report shows that the digital economy represents an American trade advantage but it also identified barriers that are stifling further growth,” Wyden said.
 
As U.S. trade negotiators pursue free trade agreements in Europe and the Asia-Pacific region, “it is important that these barriers are addressed so that U.S. digital trade can reach its full potential as a driving force behind the U.S. economy,” the Oregon senator said.
 
The study comes as the United States is pushing in trade talks to open new markets for leading U.S. internet companies like Amazon, Apple, Facebook, Google and Microsoft, which have already helped make the United States the world's largest exporter of digital services.
 
That has become more complicated after revelations that the National Security Agency was mining personal data from top U.S. internet companies including under a secret program named Prism.
 
The Washington-based Information Technology and Innovation Foundation this month estimated U.S. cloud computing providers could lose $21.5 billion to $35.0 billion in revenue over the next three years if foreign customers decide the risk of storing data with a U.S. company outweighed the benefits.
 
The German government responded this week to concerns raised by the Prism surveillance program by agreeing on initial plans to boost European technology companies and make them a more favorable alternative to U.S. peers.
 
In its report, the ITC acknowledged the difficulty of estimating digital trade because of the lack of a standard definition and shortcomings in available data.
 
But U.S. exports of “digitally-enabled” services, one measure of digital trade, totaled $356.1 billion in 2011, a 26 percent increase from $282.1 billion in 2007, covering areas such as financial services, retail services, professional services, healthcare, logistics and education, the ITC said.
 
Europe, with its strong internet infrastructure, is the most important digital trading partner for the United States and is also an important destination for U.S. digital trade-related foreign direct investment, the ITC said.
 
One impediment to increased trade are foreign government  policies that compel digital companies to use local data servers, technology and inputs or that provide procurement preferences for local firms, the report said.
 
Many “localization” requirements are justified on data privacy grounds, and it is often challenging to determine whether they are imposed for that purpose or to favor the country's domestic firms, the ITC said.
 
Different approaches to data privacy protection can also be an obstacle to trade, an issue that U.S. firms hope to address in talks with the 27-nation European Union on the proposed Transatlantic Trade and Investment Partnership pact.
 
In another area, U.S. music, book, software and movie companies view digital piracy of copyrighted material as their biggest obstacle to increased online exports, while “internet intermediaries” such as Google and Facebook are more concerned about foreign laws that could hold them liable for the actions of users on their networks.
 
In one instance, “the Italian government brought a criminal case against several Google executives for a video posted by a YouTube user that showed the bullying of a disabled student, despite the fact that Google had a notice and take-down system in place that resulted in the prompt removal of the video from the site,” the ITC said.
 
U.S. digital companies complain that censorship in countries including China, Vietnam and Saudi Arabia also hurts their business operations, as do restrictive immigration policies and complicated customs procedures, the ITC said.

You May Like

Karzai's Legacy: Missed Opportunities?

Afghanistan's president leaves behind a much different nation than the one he inherited, yet his legacy from 13 years in power is getting mixed reviews More

Secret Service Head: Breach Won't Happen Again

update Julia Pierson answers questions about the latest break-in well as several other embarrassing incidents involving the agency More

Frustrated, Liberian Students Want Ebola Fight Role

Thousands have volunteered to go to counties, rural villages to talk to people in their language about deadly virus More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Malaysia Struggles to Stop People Joining Jihadi
X
Mahi Ramakrishnan
September 30, 2014 2:16 PM
Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Iran's Rouhani Skeptical on Syria Strikes

Iranian President Hassan Rouhani expressed skepticism Friday that U.S.-led airstrikes in Iraq and Syria could crush Islamic State militants. From New York, VOA’s Margaret Besheer reports the president was also hopeful that questions about Iran’s nuclear program could be resolved soon.
Video

Video US House Speaker: Congress Should Debate Authorization Against IS

As wave after wave of U.S. airstrikes target Islamic State militants, the speaker of the Republican-controlled House of Representatives says he would be willing to call Congress back into session to debate a formal, broad authorization for the use of military force. VOA’s Michael Bowman reports from Washington, where legislators left town 10 days ago for a seven-week recess.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Video

Video Ebola Robs Liberians of Chance to Say Good-Bye to Loved Ones

In Liberia, where Ebola has killed more than 1,500 people, authorities have worked hard to convince people to allow specialized burial teams to take away dead bodies. But these safety measures, while necessary, make it hard for people to say good bye to their loved ones. VOA's Anne Look reports on the tragedy from Liberia.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid

World Currencies

EUR
USD
0.7866
JPY
USD
109.25
GBP
USD
0.6139
CAD
USD
1.1120
INR
USD
61.428

Rates may not be current.