Wilbur Ross, the billionaire investor and likely incoming secretary of commerce in the Donald Trump administration (see 1611300028), “will ultimately direct much of the administration’s trade policy,” Trump transition spokesman Jason Miller told reporters on a call Tuesday. Miller said there’s no talk currently of merging the U.S. Trade Representative with the Commerce Department. But “Mr. Ross will be playing a big role in any trade particulars” and “setting much of the overall direction on this front,” Miller said. The Senate will need to confirm the Ross nomination next year.
The Computer & Communications Industry Association identified data localization, internet censorship and other restrictions on online content as significant barriers to digital trade in comments Thursday to the Office of the U.S. Trade Representative. USTR sought comments on trade barriers as it prepared its national trade estimate (NTE) report. “The Internet has been the single biggest component of the cross-border trade in services, with many of those services facilitating the international goods trade as well,” CCIA said in its filing in docket 2016-0007. "These developments call for maintaining and expanding the NTE’s focus on digital trade barriers." Traditional trade and non-tariff barriers "such as onerous customs procedures and duties for small shipments, postal policies, housing rental and taxi regulations, and outdated financial services regulations should also receive continued attention from USTR," CCIA said.
The Office of the U.S. Trade Representative is seeking comment for its 2016 notorious markets list (see 1601110051) by Oct. 7, replies by Oct. 21, for its out-of-cycle review based off the annual Special 301 Report, says a notice scheduled to be published in Thursday's Federal Register. The list identifies “online and physical marketplaces that reportedly engage in and facilitate substantial copyright piracy and trademark counterfeiting,” the notice says.
The Office of the U.S. Trade Representative is creating a Digital Trade Working Group to target digital trade barriers and promote policies to advance digital trade efforts worldwide, U.S. Trade Representative Michael Froman said. Deputy USTR Robert Holleyman will head the group, which includes USTR experts in e-commerce, telecom, services, intellectual property, innovation and industrial competitiveness, USTR said. “The Digital Trade Working Group is an important resource to help the United States maintain its 'digital trade surplus,' and allow companies and workers in every sector of the U.S. economy to use the Internet to deliver innovative, American-made products and services abroad,” Froman said. The group will focus on barriers to cloud computing, platform services and digital products trade, and will coordinate the negotiation and implementation of digital trade provisions in various bilateral and multilateral agreements, including the Trans-Pacific Partnership, Transatlantic Trade and Investment Partnership, and the Trade in Services Agreement, USTR said. Internet Association CEO Michael Beckerman called for lawmakers to work with industry and USTR to create a chief digital trade negotiator position within USTR last week during a House Ways and Means Trade Subcommittee hearing (see 1607130066).
Congress could help ensure optimal growth in already-booming digital data and trade flows by pushing to raise de minimis levels worldwide and to create a chief digital trade negotiator position within the Office of the U.S. Trade Representative, industry officials told House lawmakers Wednesday. During a House Ways and Means Trade Subcommittee hearing on digital trade, Internet Association CEO Michael Beckerman said he hopes the committee continues to work with the internet community to chart more “inclusive” trade agreements through actions such as creation of a digital negotiator position within USTR “to better reflect the realities of today’s digital internet economy.” Information Technology and Innovation Foundation President Robert Atkinson cited a McKinsey Global Institute study saying the $2.8 trillion value of international data flows in 2015 exceeded the value of global merchandise trade for the first time. Customs reauthorization legislation signed into law earlier this year raised the U.S. de minimis level -- the level below which imports are exempted from duty and paperwork -- from $200 to $800, and has helped U.S. small businesses accept returns from customers who bought shipments through e-commerce, PayPal Head-Global Public Policy Usman Ahmed said. More can be done, Ahmed said. “Through free trade agreements, addressing this issue of de minimis will be really impactful for small businesses, because they’re often dealing in low denomination of items that can be benefited by raising high de minimises around the world.” Subcommittee Chairman Dave Reichert, R-Wash., agreed free-trade agreement policies can lower barriers to global data flows, but acknowledged that future deals must improve upon previous ones that spurred several prohibitive data flow regulations. The Trans-Pacific Partnership “holds great promise” in dismantling these barriers, Reichert said, through eliminating tariffs on digital goods, and by including provisions that “encourage paperless trading,” prohibit data localization measures for all 12 TPP members, and require recognition of electronic signatures. “Resolving this issue and other outstanding issues, as well as developing implementation plans to assure that TPP will be fully implemented and enforced, is essential to getting Congressional support for TPP,” he said.
An International Trade Commission order bans import of some Arista network devices, including routers and switches, that allegedly infringe patents held by Cisco, the ITC said in Wednesday's Federal Register. The commission set no bond while the U.S. Trade Representative conducts its 60-day review on whether to issue a veto of the Tariff Act Section 337 import ban. The ITC issued a limited exclusion order against Arista and ended its investigation into the company. Arista disagrees with the ITC "that we infringe these patents or that they are valid" but respects the order and will "fully comply," CEO Jayshree Ullal wrote customers last week, in a communication provided to us Thursday by an outside company spokesman. "We intend to fully adhere to all ITC legal requirements and all products that are manufactured" in the U.S. will have "design-around versions" of the company's extensible operating system, Ullal wrote. "All international customers are unaffected by ITC orders. Our primary focus is the continued supply and service of non-infringing products."
The U.K.’s vote last week in favor of leaving the EU won’t change the fundamentals of EU digital policy or the trans-Atlantic partnership with the U.S. on digital issues, said European Commission Director General-Communications Networks, Content and Technology Roberto Viola during a Computer and Communications Industry Association event Monday. Industry officials said both before and after the U.K.’s Thursday referendum that Brexit would have implications for EU negotiations on trans-Atlantic data flows and IT-related trade agreements (see 1606240021), and potential effects for European telecoms (see 1606220001). U.S. and EU officials are to meet this week at the annual U.S.-EU Information Society Dialogue despite Brexit uncertainty. The ISD typically addresses a range of information and communication technology issues, including the digital economy.
As the U.S. government presses China to better protect U.S. intellectual property, Congress and the executive branch should do more to stop counterfeiters from common misleading practices such as changing the first letter of a company name on a label, executives told the Senate Finance Committee. Belkin General Counsel Tom Triggs held up a Belkin product and counterfeit labeled as “Melkin” during Wednesday's hearing. “It’s a little bit crazy,” he said. “Under Chinese law, if you change the first letter of a trademark, then it’s not trademark infringement against the rights owner of that trademark. So we’ve struggled to obtain relief in China to stop this company from infringing our company IP. I think all of us would agree under U.S. trademark laws, this ‘Melkin’ infringing Belkin is the classic law school example of infringement.”
Congress should work quickly to ratify the Trans-Pacific Partnership, as an expanding patchwork of data localization rules in Asia threatens to stunt U.S. digital entrepreneurship, weaken U.S. dominance in services exporting, and barricade Eastern economies from adopting open internet standards, said Deputy U.S. Trade Representative Robert Holleyman Friday. Governments including China, India, Indonesia, Russia, South Korea and Turkey either maintain or are working to pass commercially inhibiting data localization rules, Holleyman said at the American Enterprise Institute.
Switzerland is now on the Office of the U.S. Trade Representative's lower-tier watch list for copyright and other IP rights violations, USTR said Wednesday in its annual Special 301 report on the global status of IP rights enforcement. China and India remain on USTR's mid-tier priority watch list, which includes nine other countries, because ongoing IP rights enforcement problems outweigh efforts to reform both nations' IP laws. USTR again chose not to include any countries on its higher-tier priority foreign country list.