The Digital Trade Agenda of the U.S.: Parallel Tracks of Bilateral, Regional and Multilateral Liberalization

Abstract

It seems to be the U.S. administration's intention to use the newly enacted Trade Promotion Authority (TPA) to pursue a parallel track of preferential and multilateral trade negotiations, alongside the ongoing Doha negotiations of the World Trade Organization (WTO). A central innovation of the new fast-track authority is its instruction to the USTR to conclude trade agreements that anticipate and prevent the creation of new trade barriers that may surface in the digital trade environment. Hence, the U.S. digital trade policy has four sub-strategies: (i) to make sure that WTO principles and commitments apply to e-commerce and to resolve the classification issues in the most liberal way for digital trade; (ii) to use the following negotiation opportunities to secure improved market access commitments for digital products; (iii) to create a regulatory trade discipline for e-commerce; and (iv) to update trade agreements so that new treaties deal with trade-related aspects of intellectual property protection in the digital trade age.

Both the U.S.-Chile and the U.S.-Singapore Free Trade Agreement manage to almost completely satisfy all U.S. digital trade objectives. What the U.S. has not yet achieved on digital trade multilaterally, it now plans to seed in a tight net of gradually increasing bilateral agreements that are negotiated sequentially. The digital trade negotiations on the bilateral front help the U.S. to build coalitions of like-minded trade partners that will make it easier to converge to a consensus that strongly resembles the U.S. approach on the regional or even the multilateral level. But the U.S. negotiators will be likely to face the same problems as in the WTO when the U.S. starts to approach partners for preferential trade agreements that are economically more important and that are also very inclined to rank "cultural diversity" high on their agenda. With respect to other elements, however, (e.g. IPR protection, service liberalization, and general awareness of free digital trade) the U.S. multi-track initiative for digital trade remains a very promising undertaking that may also foreshadow how majorities can be found among an increasingly heterogeneous WTO membership.

JEL Classification: F13, F15, H77, K33