US Congress members criticise IPEF digital proposals that conflict with US laws

May 18, 2022: Eight prominent Democratic Congress members have written a letter to US Trade Representative Katherine Tai expressing deep concerns about the secrecy of proposals on digital trade in the Indo-Pacific Economic Framework (IPEF ) negotiations. They argue that proposals conflict with the Biden administration’s efforts to “restore competition and protect consumers, workers, and small businesses, particularly when it comes to Big Tech platforms.”

They argue that broad proposals to prevent “illegal trade discrimination” against foreign companies have been used by companies to argue against other countries’ national public interest  laws on the grounds that they disproportionately impact companies headquartered in the US.

They document that these companies have sought US trade action against Canada “for its pending Online News Act, which, like a U.S. bipartisan proposal, would require Big Tech platforms to pay for the news they profit from.” US companies used trade discrimination arguments against similar laws in Australia

The letter documents that these companies have also attacked South Korean legislation that is similar to another bipartisan congressional proposal that reins in companies like Google and Apple from using their dominant app stores to extort app developers. And the US Chamber of Commerce has attacked both the European Digital Markets Act and bipartisan US legislation to prohibit anti-competitive self-preferencing, for allegedly engaging in trade discrimination against big US tech companies.

The letter also asks for IPEF not to limit governments’ ability to regulate artificial intelligence (AI) by preventing scrutiny of AI source code and algorithms. Companies are increasingly outsourcing important decisions to AI, “in spite of clear evidence that it can discriminate on a massive scale through black box algorithms that can create inhumane and unsafe working conditions, make life-altering employment decisions, reject loan applicants, and misidentify women of colour in police footage.”

The letter argues that “it is not trade discrimination” for the US government or any of our trading partners to regulate Google, Meta, Apple, Microsoft, and Amazon to protect online competition, as tech industry groups have claimed — it is common sense, and trade-pact terms should in no way inhibit it.”

The letter criticises the lack of detail provided to Congress and the deadline imposed to finish the negotiations by November 2023, saying “an artificial deadline must not come before ensuring that the deal fulfills the Biden Administration’s commitments to promote competition in the economy, to protect digital privacy, and to advance a worker-centered trade policy.”

The letter asks for specific details of the IPEF proposals to be provided, and assessments of whether and how they might conflict with these broader policy goals.  AFTINET’s submission to DFAT on IPEF  has made similar demands for publication of proposals and guarantees that IPEF digital proposals will not reduce the government’s right to regulate the digital domain.