Industry News
ITC Report on Digital Trade
TweetOctober 1, 2014
On September 11, 2014 the U.S. International Trade Commission released a report entitled, “Digital Trade in the U.S. and Global Economies,” which is the second part to a study that looked at U.S. Digital Trade in July of 2013. This report found that if digital barriers were removed, the U.S. gross domestic product would grow between $16.7 and $41.4 billion and wages would increase by 0.7% to 1.4%.
After interviewing 10,000 U.S. digitally-involved companies, the study found that U.S. businesses face limitations in the digital marketplace abroad. The study looked at seven areas that constrain trade and then asked the firms in the study to rank the nations they believe prohibit digital trade in each category. The companies ranked countries in seven categories, which included localization requirements, market access limitations, data privacy and protection requirements, intellectual property right (IPR) infringement, uncertain legal liabilities, censorship, and compliance with customs measures. The report revealed that Nigeria, Algeria, and China were the countries in which “firms most frequently faced barriers or decided not to do business because of barriers.”
The report also reveals how data flow protection requirements in the European Union (EU) impact the U.S. digital marketplace. The U.S. Department of Commerce and the European Commission developed a “Safe Harbor Framework” to comply with EU data regulations. The FTC explains Safe Harbor as “a method for U.S. companies to transfer personal data outside the European Union in a way that's consistent with the EU Data Protection Directive.” However, any entity not subject to FTC jurisdiction cannot rely on the Safe Harbor Framework, such as financial or insurance firms. Other companies stated that even if they met the Safe Harbor requirements, they were still prohibited from participating in the EU digital marketplace.
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