The One Trade Agreement Biden Should Sign Up For Now



Susan Ariel Aaronson | Barron's

I have seen the future of international trade, and it is called DEPA, the Digital Economy Partnership Agreement. With this trade agreement, New Zealand, Chile, and Singapore have crafted a new approach to trade policymaking focused on rules to govern cross-border data flows, facilitate data-driven economic growth, and increase online trust. In December, Canada announced it would seek to join DEPA. The U.S. should too.

DEPA is pathbreaking for several reasons. First, the participants see their relationship as a partnership; they pledge to build a digital economy that supports innovation and builds trust in their own countries and globally. Second, they drafted the agreement to demonstrate the benefits of collaboration at a time when many economies are choosing to go it alone or bilaterally because of Covid-19. The agreement includes provisions designed to spur cooperation on emerging issues such as a shared approach to competition policy, which all nations may need as they seek to regulate giant data firms such as Alibaba, Google, and Facebook. These firms not only hold much of the world’s personal data, but they have annual revenues larger than many governments. With that market clout, they can bully nations that seek to regulate them—just ask Australia.

Third, the partners crafted a new approach to international trade negotiations by designing it to be easier for other nations to join all or part of the agreement. Like-minded nations that want to join DEPA do not have to acquiesce to the entire agreement. Instead, DEPA is an assortment of modules: Any interested nation can pick and choose the modules they want to agree to.

Fourth, in contrast with other recent digital trade agreements, DEPA nations recognized that there is no digital economy without the trust of internet users. Thus, DEPA includes two modules designed to build trust, including language to regulate spam and protect personal data.

DEPA is one of the few trade agreements that acknowledges that because data flows are global, a patchwork of national privacy rules will not adequately protect peoples’ privacy or their autonomy online. Hence DEPA includes further language that delineate the principles that underpin strong protection frameworks, including transparency, data quality, and accountability. In so doing, it provides both a road map for interoperability of national data regimes and a cooperative approach.

That puts DEPA in contrast with the U.S. approach to these issues. Obama and Trump administration trade officials argued that the template (which one can see in the U.S.-Mexico-Canada Agreement) is the “gold standard” for such agreements. This template encourages the free flow of data across borders and bans national strategies that could impede such flows such as policies requiring that data be stored in local servers. But the U.S. abandoned the gold standard in 1933. America’s current template is both out of date and inadequate: It does not sufficiently foster global cooperation on the complicated issues of data governance, cybersecurity, or platform regulation. Nor does it do enough to promote interoperability of national approaches.

DEPA has its own inadequacies. It doesn’t say anything about potential barriers to trade such as censorship or disinformation, both of which can undermine democracy. (The U.S. is currently investigating censorship as a trade barrier.) Meanwhile, disinformation has some similarities to spam, which almost all digital trade agreements regulate. They could add language encouraging signatories to adopt and enforce laws banning spambots, which disseminate both. Nonetheless, DEPA establishes a more up-to-date model for what digital trade agreements should look like. For that reason alone, the U.S. should sign on and encourage other nations to do the same.

In its short time in office, the Biden administration has attempted to reestablish cooperative relations with many U.S. trade partners that suffered under the Trump administration’s protectionist policies. Nonetheless, Biden officials may be reluctant to move forward with new trade agreements. Under the Constitution, the executive branch shares authority for trade policymaking with Congress. Generally, to join a new trade agreement, the Biden administration would need congressional assent. However, the Trump administration argued it could accede to the U.S.-Japan digital trade agreement because the agreement was limited to one sector and met the guidelines provided by Congress under trade promotion authority passed in 2015. The Biden administration could, if it wanted, make a similar argument to justify joining DEPA or any other digital trade agreement.

The Biden administration has decided it should not advance new trade agreements until the U.S. economy shows clear evidence of recovery. It should make an exception for DEPA. The pandemic has been full of examples of the critical urgency of digital governance, including the sudden shift to remote work to online school. It would be in Americans’ interest to participate in more comprehensive and up-to-date agreements such as DEPA.

If the administration really wants to “build back better,” it is best to be humble. America may dominate the digital economy, but Americans do not have a monopoly on creative ideas to govern the global data driven economy. Joining DEPA would be a good start to encourage the much-needed cooperation the world needs to recover.

Susan Ariel Aaronson is research professor in international affairs and the director of the Digital Trade and Data Governance Hub at George Washington University.

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