TIA Blog


Trans-Pacific Partnership will Set Next-Gen Digital Trade Policies; Open Fastest Growing Markets to U.S. Communications Services

Today, the most rapid growth in communications services – both in terms of people connecting to the Internet and number of gigabytes – is happening outside the United States. This is especially true in the rapidly developing Asian economies.   

In 2012, international digital trade in services exceeded $1 trillion.  With more than one billion individuals connected to the Internet, Asia currently provides approximately one quarter of U.S. international digital service trade. Still, with Internet penetration estimated at between 25 and 40 percent, Asia holds the largest growth potential for this dynamic sector.

There is really only one fundamental reason our information and communications technology (ICT) industry could be prevented from taking advantage of this growth – the lack of modern, region-wide trade rules that would prevent countries from discriminating against our products and our data, and would create a clear, predictable and fair marketplace for our companies.

Last month - after fierce debate - Congress passed, and the President signed into law, vital Trade Promotion Authority (TPA) legislation to provide U.S. trade negotiators with updated guidelines to pursue and complete new, market-opening trade agreements.

For the first time, these guidelines include negotiating objectives related to digital trade, including efforts to prevent forced local content requirements and restrictions on cross-border data flows. It has become clear in recent years that these two issues pose a very real and growing threat to America’s worldwide leadership in tech and telecom products and services.

The passage of TPA was critical for moving forward with negotiations of the Trans-Pacific Partnership (TPP). TPP is a proposed free trade agreement between the United States and 11 other Pacific rim countries, which would cover 40 percent of the world economy.

For the U.S., TPP is a tremendous opportunity to play a central role in setting the rules for the next generation of trade between some of the fastest growing countries in the world. Done right, the TPP will increase exports of U.S.-manufactured goods, while protecting intellectual property and ensuring fair global competition, particularly with state-owned enterprises overseas.

Furthermore, more exports to overseas Asian markets will directly lead to creation of more high-paying jobs in science, engineering, and high-tech manufacturing here at home, along with the beneficial spillover effects of those jobs for the U.S. economy.

TPP negotiations are expected to proceed quickly with the potential for an agreement by the end of July, followed by an up-or-down vote from Congress later this year. TIA has been actively engaged in advocating for the ICT industry in stakeholder meetings regarding TPP negotiations and will continue to push for a final trade agreement with strong protections for digital trade.