Global Digital Trade Barriers Undermine Strong Manufacturing, Jobs in the United States

By March 29, 2017Shopfloor Policy

Manufacturers thrive on technological change, integrating new and disruptive technologies in products and operations ranging from smart factories to autonomous vehicles, from Internet of Things platforms to biometrics. They know that innovation and emerging technologies play a critical role in promoting manufacturing growth and investment, allowing them to maintain their competitive edge in a challenging global marketplace and support high-paying jobs in the United States.

The National Association of Manufacturers (NAM) yesterday called on U.S. government leaders to promote global trade in digital products and services that enable manufacturing and to take concrete steps to push back against the proliferation of harmful digital trade barriers. In a detailed submission to the U.S. International Trade Commission, the NAM described how important digital trade and technology issues are to manufacturing in the United States, showing how advances in areas such as next-generation information technology products and services, digital infrastructure and cross-border sharing of data and information allow manufacturers to grow. Digital trade is important for all manufacturers, but particularly to small and medium-sized manufacturers who can use these technologies to reach new markets and consumers.

In addition, the NAM highlighted in detail a set of top-priority trade barriers facing manufacturers in foreign markets, with countries such as Brazil, China, India, Russia and Indonesia as particularly problematic. Barriers include:

  • The spread of policy restrictions on cross-border data flows that hamper the ability of manufacturers to utilize services such as cloud computing and data analytics to manage and use information securely and cost-effectively;
  • Growing localization policies and market access barriers that curtail digital trade, such as mandates to manufacture products locally, to use local content or government-vetted technologies, export and import restrictions on digital products and local testing requirements; and
  • Customs limitations on products, such as low de minimis standards, inhibiting the growth of internet-enabled commerce.

While the U.S. and other governments have paid greater attention to digital trade issues in recent years, the global trading system is lagging behind. Current trading rules do not adequately address concerns related to cross-border data flows and other areas of digital trade.

The United States must be a leading global voice to ensure that manufacturers are able to move data across borders and have global access to digital products and services that grow their business.

Similarly, digital trade barriers must also be a priority, particularly for an administration that has advocated regularly for halting the unfair trade practices of other countries. Protectionist, market-distorting policies that restrict data flows and block market access for digital products widely used by manufacturers are important blocks on manufacturing growth and jobs here in the United States. In an increasingly digital world, manufacturers must be able to benefit from innovation and technology to succeed.

Ryan Ong

Ryan Ong

Ryan Ong is the Director for International Business Policy at the National Association of Manufacturers (NAM), where he works with NAM member companies to develop and advocate the association’s positions and priorities on intellectual property, standards and regulatory concerns, and investment policy issues, as well as issues in China and India. Mr. Ong has on-the-ground experience on many of these issues in previous stints at the US-China Business Council and the Duke University's Center on Globalization, Governance & Competitiveness.
Ryan Ong

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