AMBASSADOR SEPULVEDA ON TRADE PROMOTION AND OPEN INTERNET FIGHT

FROM:  U.S. STATE DEPARTMENT
Trade Promotion and the Fight to Preserve the Open Internet
Remarks
Ambassador Daniel A. Sepulveda
Deputy Assistant Secretary and U.S. Coordinator for International Communications and Information Policy, Bureau of Economic and Business Affairs
U.S. Chamber of Commerce and Association of American Chambers of Commerce in Latin America
Los Angeles, CA

February 11, 2015

Three billion people are connected to the Internet today. And trillions of devices are set to join them in the Internet of Things. Together, the connectivity of people and machines is enabling economic and social development around the world on a revolutionary scale.

But it will take open markets, the cooperation of leaders around the world, the participation of a vibrant and diverse range of stakeholders, and strong trade agreements, with language preserving the free flow of information, to protect the Internet’s potential as the world’s engine for future growth, both at home and abroad.

As the number of Internet users worldwide has ballooned from 2 to 3 billion, the increase in Internet use creates significant economic potential. The Obama Administration is working to unlock the promise of e-commerce, keep the Internet free and open, promote competitive access for telecommunications suppliers, and set digital trade rules-of-the-road by negotiating new trade agreements. Trade Promotion Authority legislation and the pending trade agreements we expect Congress to consider over the coming months and years will provide that kind of protection. These agreements aim to ensure that the free flow of information and data are the default setting for nations. This will preserve the architecture that has empowered the Internet and global communications to fuel economic growth at home and abroad. It is in our interest, across parties and ideology, to ensure we move forward and approve TPA and the pending agreements for many reasons, but promoting the preservation and growth of global communications and the open Internet is one of the strongest.

Senator Ron Wyden, the ranking member on the Senate Finance Committee, has made the argument well, stating, "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. 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.

If we are successful, the partnership of nations across the Trans-Pacific Partnership and Trans-Atlantic Trade and Investment Partnership regions coming behind agreements to preserve the free flow of information will serve as a powerful counterweight to authoritarian governments around the globe that have demonstrated a clear willingness to interfere with open markets and an open Internet. And make no mistake about it, if we do not seize every opportunity at our disposal to win commitments to an open, global Internet, we risk letting others set the rules of the road.

Authoritarian regimes view the Internet’s openness as a threatening and destabilizing influence. The Russian government, just last month, pressured social media companies to block access to pages used to organize peaceful political protests. In China, authorities have blocked Gmail and Google’s search engine. In addition to ongoing and systematic efforts to control content and punish Chinese citizens who run afoul of political sensitivities, such measures are an effort to further diminish the Chinese people’s access to information, while effectively favoring Chinese Internet companies by blocking other providers from accessing its market. And we know they are urging others to take similar action. These trade barriers harm commerce and slow economic growth, and they produce socially oppressive policies that inhibit freedom.

The rules of the road for commerce, and Internet-enabled trade and e-commerce, are up for grabs in Asia. We’re working harder than ever to bring home trade agreements that will unlock opportunities by eliminating barriers to U.S. exports, trade, and investment while raising labor, environment, and other important standards across the board. Right now, China and others are negotiating their own trade agreements and seeking to influence the rules of commerce in the region and beyond. These trade agreements fail to meet the high standards that we strive for in our free trade agreements, including protection for workers’ rights and the environment. And they don’t protect intellectual property rights or maintain a free and open Internet. This will put our workers and our businesses at a disadvantage.

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.

Many countries no longer primarily produce products. Rather, businesses produce product components and provide services, many of which are delivered digitally. In order to remain competitive globally and promote the capacity of businesses to innovate, the United States and our partners in the Western Hemisphere must build the Americas into a shared, digitally connected, integrated platform for global success. By working with our trade partners in Latin America and Asia to conclude the Trans-Pacific Partnership we are advancing this vision and making it a reality. We will set the standards with twenty-first century trade agreements.

We know that not everyone is convinced of the merits of open markets. And to win their hearts and minds, we have to demonstrate and communicate how these two values – open markets and the open Internet - are interconnected. And we have to show that Trade Promotion Authority and our agreements embrace the values that underpin the Internet today.

As Ambassador Froman has said, “Trade, done right, is part of the solution, not part of the problem.” And, because it is true, our progressive friends should recognize that the fight for open markets is the position most consistent with our progressive tradition and values.

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.”

And it is consistent with the sentiments of these giants in our tradition, our progressive tradition, 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.”

Friends, we have both a political and economic interest in promoting open markets and an open Internet. 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.