U.S. Withdraws Support for WTO E-Commerce Proposals

Trade Update • October 26, 2023

he U.S. government announced on October 25, 2023, its decision to withdraw support for proposals on data flows and source code currently being discussed in World Trade Organization (WTO) negotiations on e-commerce. The decision was made in order for the U.S. to ensure “policy space” and to assess their approaches to digital trade. The move however has raised concerns and questions about the future of global e-commerce regulations and the U.S.’s stance on international digital trade.

Differing Opinions

The USTR move aligns with the Biden administration’s desire to strengthen regulation of large technology firms and the direction of digital trade negotiations in the U.S.-led Indo-Pacific Economic Framework for Prosperity (IPEF) group of Asian countries.


But Senator Ron Wyden, the Oregon Democrat who leads the Senate Finance Committee, called the move “a win for China, plain and simple,” saying it would strengthen the Chinese model of internet censorship and government surveillance.

“USTR’s unilateral decision to abandon any leverage against China’s digital expansionism, and to oppose policies championed by allies like Australia, Japan, the U.K. and Korea, directly contradicts its mission as delegated by Congress,” said Wyden, who has long championed big U.S. tech firms, including Intel (INTC.O), the largest for-profit employer in Oregon.


USTR spokesman Sam Michel said many countries were examining their approaches to data and source code, and how trade rules can affect them.

“In order to provide enough policy space for those debates to unfold, the United States has removed its support for proposals that might prejudice or hinder those domestic policy considerations,” Michel said in a statement to Reuters, adding that the U.S. would remain “an active participant” in the WTO e-commerce talks.


The move was applauded by some lawmakers who want to rein in large tech firms, including Democratic Senator Elizabeth Warren of Massachusetts, who said Tai was rejecting efforts by Big Tech lobbyists to use trade deals to thwart regulation.

“We need to make clear that digital rules favoring Big Tech monopolies are a non-starter for the U.S. in any trade agreement, including IPEF,” she said.


U.S. Chamber of Commerce said the digital trade principles being dropped by USTR won overwhelming congressional support as part of the 2020 U.S.-Mexico-Canada Agreement on trade and have helped to make U.S. tech firms “the envy of the world.” The top business lobby group urged a reversal by USTR.

“These digital trade rules prevent countries around the world from using regulation to lock out American companies and their workers from their markets,” said John Murphy, the Chamber’s senior vice president for international policy.

Partially Sourced from Reuters.


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