CHARLES RIVKIN'S REMARKS ON FREE AND OPEN INTERNET IN TOKYO, JAPAN

FROM:  U.S. STATE DEPARTMENT
The Importance of a Free and Open Internet
Remarks
Charles H. Rivkin
Assistant Secretary, Bureau of Economic and Business Affairs
Japan Association of the New Economy (JANE), New Economy Summit
Tokyo, Japan
April 7, 2015
Remarks as prepared

Good morning and my special greetings to everyone here at the New Economy Summit in this remarkable and bustling city.

The title of this conference, “The New Economy,” highlights a timely point for me about the Internet. It isn’t just an essential component of the new economy. It really is the economy.

As early as 2011, the global digital economy’s impact on GDP growth in G7 countries had already surpassed the energy and agriculture sectors. It is rapidly transforming the emerging markets that are the key to future growth and globally shared prosperity. More and more, everything we do in the economic, commercial and financial realms is either leveraged by, or dependent upon the Internet.

In fact, the Internet has become one of the greatest and most important change agents of our lives. Three billion people are connected to the Internet today. Some estimate that number will rise to five billion by 2020. More than two-thirds of us have mobile phones.

The Internet is not only pervasive; it can cross borders and time zones at the click of a mouse. Cross-border Internet traffic grew 18-fold between 2005 and 2012. It continues to flow, day upon day, hour upon hour, microsecond after microsecond.

Clearly, the Internet is indispensable in everything we do, whether we are communicating with those we hold dear, seeking economic opportunity, or addressing the greatest shared challenges of our time, from the effects of climate change to finding cures for chronic diseases.

With something so essential, beneficial and central, to modern life, it’s imperative that we do everything in our power to preserve this precious asset. We must do so thoughtfully and with our eyes firmly focused on the futures of our children.

I spoke yesterday before the Japanese National Press Club about the importance of preserving data flows, which is essential, if we are to truly safeguard the viability of the Internet. I told them that, in many ways, the Internet is like the golden goose in a well-known children’s story; one that has been retold across centuries and many cultures, from Aesop’s Fables to the Buddhist book of Vinaya.

The details differ, depending on the culture, but the story is essentially the same. A family comes into possession of a magical goose – or a bird – that provides golden eggs – or in some versions, golden feathers. But in their zeal to further exploit this remarkable goose, the family ultimately kills the bird.

The story serves as a cautionary tale for how important the Internet is to all of us – and how we must all work together to make sure we don’t destroy humanity’s golden asset. It’s timely too, for as we meet, this is a critical moment in the fast moving evolution of the Internet, when important decisions lie before us.

The world community – in multilateral and other forums – faces complex and difficult choices, such as whether states – and the intergovernmental institutions they control – should be in the drivers’ seat for managing how the Internet works. Also in the debate is how we can find a balance between protecting people’s privacy and preserving the free and open flow that makes the Internet so dynamic. These and other questions are hugely impactful; not only for the world but for both our nations.

My country is proud to stand shoulder to shoulder with Japan on so many issues in this space. Our two countries are more than partners in this effort and our faith in our alliance is strong. We are not only among the Internet’s biggest producers and consumers, we are some of its strongest advocates.

In multilateral forums and negotiations, and in our own continuing bilateral dialogues, we continue to promote and support the decentralized, multi-stakeholder approach to Internet governance because it is in the best interest of continued innovation and broadly shared prosperity.

We also pursue other related agendas, such as how we can construct rules for the collection, use and distribution of data in our markets in a way that protects privacy while supporting innovation.

As Assistant Secretary of State for Economic and Business Affairs, I am humbled to lead the office at the State Department which has such a leading and integral role, not only in Internet governance, but in trade and related matters, such as intellectual property rights. All three come to bear in one of our most important and ongoing negotiations: The Trans Pacific Partnership – or TPP.

This high standard multilateral trade deal will not only open new channels of trade and investment, and set high environmental, labor and consumer standards. It will encourage and support private sector investments in the transmission of data across borders. It will also work towards the certainty of a safe space where the Internet can continue to grow.

Whether we are engaging as bilateral or multilateral partners, or speaking on national issues in the U.S. Congress or the Japanese National Diet, we recognize that no decision can only affect our own nations and citizens. The Internet impacts everyone, for better or worse, and therefore must stay free and open. Japan highlighted this support for Internet openness when it joined the Freedom Online Coalition at its meeting in Estonia in April last year.

We know that, as we address what seem to be the most domestic issues, such as the privacy of our citizens, we must also consider their wider application and consequences. We must strike a balance between our understandable caution and the need for the Internet to be accessible to everyone.

The United States does not claim to have all the answers. But we strongly believe that, when it comes to the question of protecting data, corporations have some of the strongest motivations and the best resources to safeguard them.

By holding them accountable to best practices and sound rules, instead of creating walls, we believe we can provide a more dependable and enforceable defense. It is our hope that more countries, especially those who value democracy, openness and freedom, can adopt this or similar models.

As we work to maintain a free and open Internet, we are also focused on another critical issue: developing and expanding the Internet to create opportunities for developed, emerging, and developing economies alike.

According to many studies, more than half the world’s population is offline. It is also estimated that 1.8 billion people around the world will enter the consuming class by the year 2025. Almost all of them will be from emerging markets. This will create increased demand and global production, which means economic opportunities for both our countries, as well as improved goods and services for emerging and developing country consumers.

Digital technologies enable even the smallest companies and entrepreneurs to become “micro-multinationals” – selling products, services, and ideas across borders. In emerging and developing nations, whose small businesses are so often the backbone of their economies, this access to global markets would have dramatic results.

By linking more entrepreneurs and SMEs to global supply chains; and by connecting more people to each other and the information and services available, we could help ensure that all populations have access to technology. We can also ensure that no singular group is excluded due to barriers such as prohibitively high costs, lack of network connectivity, or social or cultural hurdles.

If you’ll permit me to return to my earlier metaphor, the Internet – like the goose of those children’s books – is something we cannot afford to lose. That is why the United States and Japan continue to expand connectivity, keep digital trade routes open, and make the Internet more accessible, as we also work to drive innovation and grow our economies.

There can be few more ambitious goals than these, but with partners like Japan, and the transformative potential of the Internet, we are confident that we can achieve them.

A generation ago, most of us would never have dreamed technology could leverage human aspirations at this kind of scale. It is a remarkable sign of our times that we can even think to do so. Let us not waste this unprecedented opportunity. Let us move forward together with vision, respect for one another, and an even greater sense of responsibility for our greater global community.

Thank you.

AMBASSADOR SEPULVEDA'S REMARKS ON THE DIGITAL ECONOMY OPPORTUNITIES FOR U.S. AND JAPAN

FROM:  U.S. STATE DEPARTMENT
03/30/2015 02:35 PM EDT
Trade and the Digital Economy: Opportunities for U.S.-Japan Global Leadership
Remarks
Ambassador Daniel A. Sepulveda
Deputy Assistant Secretary and U.S. Coordinator for International Communications and Information Policy, Bureau of Economic and Business Affairs
Brookings Institute
Washington, DC
March 30, 2015
As prepared

Three billion people are connected to the Internet today. And trillions of devices are set up to join them in the Internet of Things. Together, those connections and the data and economic activity that they generate constitute the global digital economy. Our trade policy and other bilateral efforts can and should enable its growth.

America and Japan are leaders in the global digital economy, not just as producers and consumers, but as advocates for the policies that enable its existence and continued development. Our partnership is strong because we both believe that promoting continued global connectivity, with as little friction as possible injected into the transfer of ideas and information, holds the potential to help lift people out of poverty, formalize the informal economy around the world, increase the efficiency of supply chains, increase the productivity of workers, raise wages, and improve people’s lives.

We both believe that the promotion of the global digital economy is an enabler of human progress. It forms a foundational platform for broadly shared prosperity.

So what does that mean for our trade policy and why should advocates for the global Internet support our work in this space, including Trade Promotion Authority and the TPP? The answer is this: the value that trade agreements can add to the strengthening of the global Internet as a platform for progress lies in language that America and Japan are championing. The goal is to establish a joint commitment among signatories to policy that encourages private sector investments in the networks that enable the transmission of data across borders by protecting cloud computing against data localization for example and provisions preserving the free flow of information over the communications networks that connect people and nations. These are two critical elements to the future of the Internet.

Those provisions applied to as many markets as an agreement like the TPP will cover can create the certainty of a safe space for the Internet to continue to grow that covers millions of people and can set an example for the rest of the world to follow.

Senator Ron Wyden, the ranking member on the Senate Finance Committee, has made the argument that, "America’s trade negotiating objectives must reflect the fact that the Internet represents the shipping lane for 21st Century goods and services… Trade in digital goods and services is growing and driving economic growth and job creation all around the country. U.S digital exports are beating imports by large margins, but outdated trade rules threaten this growth by providing opportunities for protectionist policies overseas. The U.S. has the opportunity to establish new trade rules that preserve the Internet as a platform to share ideas and for expanding commerce..."

Senator Wyden is absolutely correct. He is widely acknowledged as one of the strongest champions for the open Internet in our Congress and his work on trade is consistent with that body of work.

Our pending agreements with nations in the Pacific community will establish rules for the preservation of those virtual shipping lanes as enablers of the transport of services and ideas, allowing startups and the voices of everyday people to challenge incumbent power in markets and ideas.

We know that both old and new American businesses, small and large alike, are dependent on the global Internet as the enabler of access to previously unreachable consumers. In the U.S. alone, American Internet companies and their global community of users contribute over $141 billion in annual revenue to the overall U.S. GDP, simultaneously employing 6.6 million people. And the Internet is not simply about the World Wide Web, it is the communications platform for managing global supply chains, distributing services, and acquiring the market information necessary to succeed anywhere.

As Ambassador Froman has said, “Trade, done right, is part of the solution, not part of the problem.” It is, when done right, an enabler of the values America holds dear. And that idea is neither new nor partisan.

It was Woodrow Wilson who said, “The program of the world's peace, therefore, is our program; and that program, the only possible program, as we see it, is this” and he listed his fourteen points. Among them was number three: “The removal, so far as possible, of all economic barriers and the establishment of an equality of trade conditions among all the nations consenting to the peace and associating themselves for its maintenance.”

It was Franklin Roosevelt who asked the New Deal Congress for the first grant of trade negotiating authority.

In his remarks at the signing of the Trade Expansion Act of 1962, it was JFK who said, “Increased economic activity resulting from increased trade will provide more job opportunities for our workers. Our industry, our agriculture, our mining will benefit from increased export opportunities as other nations agree to lower their tariffs. Increased exports and imports will benefit our ports, steamship lines, and airlines as they handle an increased amount of trade. Lowering of our tariffs will provide an increased flow of goods for our American consumers. Our industries will be stimulated by increased export opportunities and by freer competition with the industries of other nations for an even greater effort to develop an efficient, economic, and productive system. The results can bring a dynamic new era of growth.”

If he were alive today, he would have also cited what increased trade could do for the global Internet.

It is fully consistent with the sentiments of these giants in our tradition, from Wilson to Kennedy, that President Obama most recently stated, “Twenty-first century businesses, including small businesses, need to sell more American products overseas. Today, our businesses export more than ever, and exporters tend to pay their workers higher wages. But as we speak, China wants to write the rules for the world’s fastest-growing region. That would put our workers and our businesses at a disadvantage. Why would we let that happen? We should write those rules. We should level the playing field. That’s why I’m asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren’t just free, but are also fair. It’s the right thing to do.”

Preservation of these ideals is and should remain a bipartisan and broadly held goal. It is critical to our future and contained within the language we are asking Congress to approve.

Beyond trade policy and the critical provisions in the TPP for the future of the Internet, America and Japan can and are working together to ensure that our domestic digital initiatives are both enabling the digital economy and leveraging it for positive purposes. We conduct annual dialogues on the subject and share information and ideas on issues ranging from how we use communications for disaster response, how we encourage competition, and how we are working to sensibly construct rules for the collection, use, and distribution of data in our markets in a way that protects privacy while enabling innovation.

In the multilateral space and of most direct relevance to the work of my office, American and Japan are strong partners in multilateral forums and negotiations where we work together to ensure that we preserve the decentralized, multistakeholder system of Internet governance. Last year, our two governments partnered at the International Telecommunication Union’s Plenipotentiary treaty conference to protect the Internet’s existing system of voluntary protocols and multistakeholder-led governance against initiatives by other nations to centralize control over the Internet in the hands of governments at the UN. At the same time we partnered at the NETMundial conference in Brazil, the Internet Governance Forum, and other institutions and gatherings in an effort to encourage and facilitate greater participation and representation from the developing world in the multistakeholder system of Internet governance.

Together, we will continue to focus the world on expanding connectivity, keeping digital trade routes open, and ensuring that we continue to expand the digital economy and make it more inclusive. These are valuable, long term efforts and we have the kinds of bonds between friends and allies that will help us succeed.

Thank you for your time. I look forward to your questions.