Chairman Goodlatte: Today’s hearing reflects a new twist on the same old song. U.S. companies are at the forefront of the digital economy and as our companies look to operate globally, they face new and novel non-tariff trade barriers that could make it costly or near-impossible to operate overseas.
As we work to promote digital trade we must work to make sure that the international playing field is fair. When foreign countries attempt to raise trade barriers or put in place costly regulations, as a cost of doing business, we need to call it out for what it is – a barrier to free and fair trade.
We are now in a world, where on one side of the globe, the United States has negotiated the Trans-Pacific Partnership trade agreement (TPP) with rules promoting cross border data flows and preventing undue restrictions, such as localization requirements.
And on the other side of the globe, we look at Europe which has invalidated a 15-year old safe harbor agreement. This decision translates into uncertainty for thousands of American companies doing business in Europe, which could have a ripple effect on our economy.
As the United States and Europe continue to negotiate the new safe harbor agreement, we must understand that this is a complex issue for all sides. And we are cautiously optimistic that the Administration and our European allies will be able to come to an agreement that eliminates uncertainty and allows transatlantic commerce to continue.
In the House, we recently passed the Judicial Redress Act. This bipartisan bill, awaiting Senate action, extends certain privacy protection rights to citizens of European countries, as well as other allied nations, if the federal government willfully discloses information in violation of the Privacy Act. Under this bill, citizens of designated countries would be extended the core benefits of the Privacy Act, which already applies to Americans, with regard to information shared with U.S. law enforcement authorities, including the ability to bring a lawsuit for the intentional or willful disclosure of personal information.
This hearing is important because the rules of the road that are considered on digital trade and data flows will either promote or impede the growth of the Internet. A recent BSA report stated that 90% of all of the world’s data was created in just the last two years. While an incredible statistic, it also shows how important data and data flows are to innovation and economic growth.
Localization requirements, such as forcing companies to locate data centers in a particular country, defeat the whole point of cloud computing. New technologies like the Internet of Things (IoT) and cloud computing rely on cross-border data flows. Undue restrictions could prevent companies like Boeing and GE from using IoT sensors in jet engines to send back real time data to their engineers in the United States. For global diversified technology and manufacturing companies, they would face the absurd situation of not being able to move their own R&D data from country to country. Restrictions on data flows fail to recognize the importance of inter-connected global supply chains and the need for the uninterrupted movement of data.
As this Committee continues to study this issue, it is important for us to keep in mind the effects on public policy today and in the future.
I am hopeful that the right policies will help fuel the engine of American innovation, prosperity and creativity. I think we have a great panel assembled today and I look forward to hearing from all of our witnesses.
For more on today’s hearing, click here.