Hillary’s International Tech Proposals

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On June 28, 2016, presumptive Democratic Presidential nominee Hillary Rodham Clinton released her “Initiative on Technology & Innovation.”  SIIA does not endorse any particular presidential candidate, but we think nonetheless it is worthwhile commenting on the proposals.  Should presumptive Republican nominee Donald Trump present technology policy proposals, we will comment on those too.    

It is worthwhile pointing out that even the domestic proposals have an international dimension to them.  The proposed STEM and computer science investments, high-speed broadband, and skills training are all things that SIIA strongly supports.  The building the human talent pipeline for 21st century jobs idea is certainly something worth supporting.  This is good for both workers and business, while also increasing the legitimacy and support for the trade and investment policies SIIA supports.  As we have written, high-tech creates demand for jobs.  And although the fourth plank in the program – “rules of the road to support innovation – rules that foster healthy competition, reduce barriers to entry, and effectively protect intellectual property – while safeguarding privacy and security –” are “domestic,” they have international implications.   

Grow American Technology Exports

This is arguably Secretary Clinton’s most important international technology policy commitment. The best way to do that would be to approve the Trans-Pacific Partnership (TPP), which as we have written includes excellent digital trade provisions.  This is because this agreement gives the United States leverage and influence in establishing international rules for digital trade.  However, given Secretary Clinton’s opposition to TPP, the question is, what leverage would a President Clinton have in developing international rules that would allow American technology exports to grow? 

Export control reform is worth pursuing, but we would like to see more detail on how that might take place.  And we are under no illusions that such reform will yield quick benefits given the always strong competing strategic imperatives and sheer bureaucratic inertia. 

We support policies that protect trade secrets and Intellectual Property Rights (IPRs).  The Obama Administration has had some successes in the trade secrets area.  Perhaps one thing to consider might be to work to give the Intellectual Property Enforcement Coordinator (IPEC) a clear international, as well as domestic, role in enforcing intellectual property protection.  This would have to be closely coordinated with USTR, especially given Secretary Clinton’s proposal to double USTR’s enforcement staff.  

With respect to “forced tech transfer,” vigorous enforcement of existing international trade law commitments might help.  That option does not exist to the same extent with respect to data localization absent new trade agreements.  The U.S. should take the lead in appropriate international fora such as the OECD, in assembling the data showing the economically harmful effects of such localization.

China is a huge challenge for U.S. ICT companies.  It appears that President Obama has had some success in reducing China’s cyber-enabled economic espionage.  But China’s determination to use “secure and controllable” cybersecurity and other policies to favor domestic ICT companies is growing.  The next Administration should continue to use the G20 and other appropriate international groups to try to influence Chinese behavior in this space.  Most importantly, a Bilateral Investment Treaty (BIT), which is something China wants, should not be concluded without provisions that effectively contribute to preventing discrimination in the ICT sector.  

Fight for an Open Internet Abroad

Secretary Clinton did a lot to elevate the importance of this issue during her tenure at the State Department.  The Secretary noted in a speech she delivered in The Hague on December 11, 2011: 

“And today, as people increasingly turn to the internet to conduct important aspects of their lives, we have to make sure that human rights are as respected online as offline.” 

That speaks to SIIA’s view that existing law is generally applicable for what needs to be done to ensure human rights, provide the trust needed for e-commerce, address cyber-security, protect intellectual property, and secure privacy in the online world.  That said, voluntary initiatives and voluntary best practices can be helpful in solving problems specific to the Internet such as countering violent extremism.  SIIA promotes a debate on these topics.  We did this most recently during a February panel discussion at George Washington University on: “What are the responsibility of tech companies in an age of international terrorism?” 

Promote Multi-Stakeholder Internet Governance 

The Secretary’s championing of the multi-stakeholder Internet governance model is welcome.  One way she could demonstrate her tangible commitment to the model during her possible Presidency would be to address in person an Internet Governance Forum (IGF) meeting.  Admittedly, that carries risks.  After all, the point of the multi-stakeholder system is to avoid government control.  Wouldn’t an in-person address by the world’s most powerful leader in and of itself send the wrong message?  Not necessarily.  After all, governments are part of the multi-stakeholder community responsible for Internet governance.  Whoever is elected President should continue the bipartisan commitments to the multi-stakeholder Internet governance model. 

Promote Cyber-Security at Home and Abroad

The mention of the National Institute of Standards and Technology (NIST) Cybersecurity Framework was the correct call in the policy document released by Secretary Clinton.  The many dialogues with other countries that the Secretary promoted during her tenure have been useful.  The best practices codified by the NIST Framework and other Frameworks around the world will always need to be updated given the dynamic nature of technology.  Besides updates, our sense is that policymakers would benefit from a review of best practices implementation and what has been successful and what has not worked.

Safeguard the Free Flow of Information Across Borders

Clearly, ensuring the functioning of the EU-US Privacy Shield will be an essential task for the next Administration.  In general, promoting and likely negotiating interoperability frameworks for cross-border data flows will probably be a growth industry in the coming years.  In part, this is because more countries are adopting EU-style “whole-of-economy” privacy frameworks, including their rules for cross-border data flows (some observers talk of countries essentially “cutting and pasting” the EU General Data Protection Regulation into their laws).  The work to include more countries in the APEC Cross Border Protection Rules (CBPR) system should perhaps be intensified.  Ideally, the United States would negotiate arrangements with other countries that recognize both a sectoral privacy system and a more global system – this was successfully done in TPP.  Absent such arrangements, additional Privacy Shield agreements are likely going to be necessary as mentioned above. 

Update Procedures Concerning Cross-Border Requests for Data by Law Enforcement 

SIIA strongly supports Mutual Legal Assistance Treaty (MLAT) reform.  We clearly need something that works in real time. In addition, it is essential to remove U.S. restrictions that provide cover for other countries to impose their own restrictions.  For instance, the exception for financial services in TPP is a glaring example of a U.S. data localization requirement that is not justifiable on security or other grounds.  We understand that the Treasury Department is working to fix this problem definitively, and we certainly hope that it does.  It is important to do this even if TPP is not passed.  The Commodities Futures Trade Commission (CFTC) also has localization rules, which U.S. tech companies oppose.  We recommend that the next Administration conduct an inventory of U.S. data localization rules with a view to eliminating them unless they can be justified on technical grounds.

Carl Carl Schonander is Senior Vice President for Global Public Policy.