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US Trade Policy Shift on Big Tech Offers Hope Despite Huge Fights Ahead
The implications of the U.S. withdrawal of support for extreme Big Tech trade provisions for developing countries
and people across the world.
Dec 05, 2023
On October 24, the U.S. government withdrew support for a set of proposals for digital trade rules in talks at the World Trade Organization (WTO) that the U.S. itself had proposed in 2019.
With regard to negotiations on digital trade, or “e-commerce,” the Office of the U.S. Trade Representative stated: “many countries, including the United States, are examining their approaches to data and source code, and the impact of trade rules in these areas. In order to provide enough policy space for those debates to unfold, the United States has removed its support for proposals that might prejudice or hinder those domestic policy considerations.” However, variations on the proposed rules continue to be supported by other WTO members, as can be seen in the most recent leaked text, and it remains to be seen where the U.S. will sit in relation to those.
The proposals, developed and backed by Big Tech lobbying groups, were intended to limit governments’ ability to regulate cross-border transfers of data, as well as governments’ regulation of source code and algorithms, a source of significant public debate in many countries around the world.
Although Big Tech includes the largest corporations in world history, the industry is subject to far less regulation than other economic sectors.
The Biden administration’s step back from outdated Big Tech proposals in trade agreements is a huge symbolic win for workers and small businesses, as well as for fairness, democracy, and development around the world. It’s a major win for the civil society groups that form part of the Our World Is Not for Sale (OWINFS) global network that has campaigned against these rules since they were first proposed in other trade agreements as far back as 2015.
The U.S. first proposed these Big Tech rules when public opinion was largely unaware of the dangers of Big Tech corporations controlling our data, monopolizing key technologies, and preventing effective regulation of the digital environment.
Today, much of the world is far more aware of the damage caused by Big Tech as it monopolizes vast swathes of our economy to lock out fair competition for small businesses, profits from discrimination and surveillance, undermines civil rights, and foments extremism and disinformation. Using its vast economic power, it intervenes in policy-making processes to evade regulation, thereby weakening our democracies. Big Tech hoards, steals, and illegally collects data, the key economic resource today, thereby exacerbating inequities between industry owners and the rest of us. It also invades our privacy and makes us and our children less safe online. It violates workers’ rights in order to maximize profits.
All of these issues, and more, are subjects of contemporary debate, as well as multiple lawsuits, indictments, and financial penalties, in the U.S. and around the world.
For nearly a decade, Big Tech has tried to secure binding new global disciplines to constrain regulation on these issues and preempt appropriate governance through democratic channels. Although Big Tech includes the largest corporations in world history, the industry is subject to far less regulation than other economic sectors.
Big Tech’s proposals on source code are illustrative. The use of artificial intelligence (AI) has increased exponentially in recent years. AI involves using large data sets to train computers to make decisions using the data provided to them, based on instructions from algorithms written into the source code.
However, algorithmic systems can exacerbate racial, gender, and labor discrimination; facilitate corporate evasion of regulatory oversight; and be used to prevent competition. Yet Big Tech is pursuing proposals that would bar governments from having access to the source code for algorithms in order to regulate it. Companies use AI to decide more and more business practices, many of which, it turns out, often violate competition rules, privacy, or civil or labor rights. Thus, Big Tech wants to lock source code up in permanent, binding “trade” agreements to ensure that governments can’t regulate most of their business practices!
Proponents argue that these source code provisions are needed to protect against forced technology transfer (usually referencing China). But this is not considered a real issue in most of the countries party to digital trade deals. Source codes are already protected by intellectual property law, including copyright and, in some cases, patents, as well as trade secrets. The proposed bans on source code disclosures would have represented an additional layer of protection for algorithms embedded in source code, affecting a broad swathe of human activity in which hardly any other counterbalancing human, social, economic, or cultural rights would have been affirmed.
Extensive further reasons why exceptions to the source code text in these agreements are insufficient — in the US, the European Union (EU), and around the world — can be found in the report, “The European Union’s Digital Trade Rules: Undermining European Policy to Rein in Big Tech.” For example, experts have noted that for algorithmic systems, “white box” testing (with access to the source code) is far superior to “black box” testing (without it). True public oversight would require scrutiny, and thus access to the source code, by academics, media, critical engineers, and trade unions, and not only by the regulators and judicial adjudicators currently recognized in the proposed provisions.
In a debate in the European Parliament with this author, the head of services and digital trade for the European Commission, Sylvia Baule, tried to claim that the “general exceptions” in the WTO — the model for those in the digital trade provisions — would be sufficient to protect the public interest. However, these provisions have been successful in defending public interests in trade cases only 2 out of 48 times in the WTO’s history, which Baule sheepishly acknowledged was “not 100 percent.” In addition, enforcement of public interest laws, labor rights, and civil rights such as privacy must not be subject to review by a trade tribunal, which prioritizes trade considerations over human and fundamental rights.
Finally, the exceptions contemplate, however insufficiently, only some known risks inherent to AI systems. As new risks and social harms become known, it will be even more important for governments to maintain the power to regulate algorithmic systems, including their source codes, to ensure that human rights are upheld and that harms to society are reduced.
[Countries] need to use the public’s data for the public’s interest, such as for addressing climate change or resolving global pandemics — rather than having it monopolized for the private profit of a handful of Big Tech corporations.
Allowing Big Tech monopolies to establish rules enabling them to transfer data around the world without regulation would also further tilt the playing field against workers, consumers, citizens, small businesses, and developing countries generally, thereby locking in unequal access to the greatest source of wealth creation in the future: data. Countries need to be able to use their data for digital industrialization, based on decent job creation. They also need to use the public’s data for the public’s interest, such as for addressing climate change or resolving global pandemics — rather than having it monopolized for the private profit of a handful of Big Tech corporations.
When these risks are considered, together with the myriad harms to society and development potential becoming more well-known each day (and detailed in “Digital Trade Rules: A disastrous new constitution for the global economy written by and for Big Tech”), it is difficult to avoid a conclusion: there is no compelling justification for, and in fact an abundance of arguments against, including provisions that bar governments from requiring the disclosure of source code, and from regulating data flows, in “trade” agreements.
Other provisions would also be harmful for development, according to the United Nations Conference on Trade and Development’s “Joint Statement Initiative on E-Commerce (JSI): Economic and Fiscal Implications for the South,” and much other research available at the OWINFS site here.
Nevertheless, Big Tech has thrown a predictable temper tantrum since the announcement, deluging the press with outlandish claims that this prudent and cautious change will somehow benefit China (it won’t) or that it’s harmful to workers (it isn’t, and Big Tech wouldn’t care anyway).
None of these claims have merit. Yet their lobbying offensive demonstrates clearly how much Big Tech stood to gain economically from the provisions.
The EU, Japan, Australia, Canada, and other countries pushing these proposals should also hit the “pause” button. Their national industries were never set to gain from them; rather it would have been the local divisions of Google, Apple, Facebook, Amazon, and the like, which formed the core of the lobbying pressure for the provisions around the world.
Developing countries being pressured to join these agreements can take this opportunity to strengthen their resolve. The Africa Group’s rejection of these proposals at the WTO in December 2017 set an important precedent. The majority of developing countries have stayed out of the so-called Joint Statement Initiative (JSI) by a breakaway group that led to negotiations on digital trade without a mandate from the WTO. This is despite an ongoing pressure campaign which includes the egregious use of “development aid” funds to lobby countries to join.
A few dozen developing countries have joined the JSI. Nigeria has proposed an exception that would allow them not to comply with the most problematic rules, but there’s no real chance it will be accepted. The change in the U.S. position is an important sign that the tide is turning against these rules, even in countries that have championed them. This new context provides a signal for countries to withdraw from participation. Many countries are also being pressured to accept the same provisions through bilateral or regional trade agreements, and these should also be rejected. And the US position could change again.
Preventing “trade” policy from imposing regulatory handcuffs on the digital economy is the first step toward using digitalization in the public interest, including for digital industrialization.
The change in the U.S. position is an important sign that the tide is turning...
Next, countries should fill that policy space with appropriate regulations. These would include rules to, for example, prevent monopolies and promote start-ups; prevent discrimination; ensure that civil rights, such as privacy and labor rights, are enforced in the digital sphere, and assess fair taxation; among others. For developing countries, technology transfer and a genuine commitment to supporting digital industrialization are top priorities.
Legal, policy, and programmatic developments in the EU, and some developing countries such as India, already go beyond the data flows and source code-related provisions proposed in the JSI. As their digitalization progresses, all countries will have to employ policies inconsistent with these provisions, as the U.S. — otherwise the home of digital laissez faire — has now realized.
In a few months’ time, WTO members will have to make a decision on another digital trade issue. More than 25 years ago, the U.S. snuck an agreement into the WTO to ban customs duties on electronic transmissions. But there is abundant evidence that Amazon, Netflix, Apple, and Microsoft can afford normal trade taxes on electronic books, movies, music, and software, while still making huge profits selling these products around the world. This agreement has been extended over and over. These taxes could be essential revenue sources for developing countries to build their digital infrastructures, not to mention for public services, climate resilience, and other key needs. A tax holiday for the most profitable of Big Tech corporations does nothing for workers or small businesses, in the United States or around the world. Now, developed country members of the WTO must drop their insistence on extending it yet again.
Instead, the moratorium on customs duties on electronic transmissions should be allowed to expire at the upcoming 13th Ministerial Conference of the WTO in Abu Dhabi in February 2024. This will be the next test of the “worker-centeredness” of the trade policy of the U.S., the EU, and other countries.
Only with proper policy space — by keeping rules preventing effective regulation of the digital economy out of trade agreements — will citizens worldwide have a chance to rein in Big Tech.
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'Heartbreaking' and 'Pathetic': US Obstructs Patent Waiver for Covid Tests and Treatments
"There have been at least 290,000 deaths from Covid-19 since the WTO punted on the question of global access to tests and treatments back in June," said one advocate. "How many more need to die before the U.S. joins the right side of history?"
Dec 06, 2022
Global health campaigners denounced U.S. President Joe Biden's administration for refusing to support a temporary suspension of patents for Covid-19 tests and treatments this year, a move that further delays the possibility of securing a World Trade Organization intellectual property waiver aimed at increasing access to lifesaving medical tools in developing nations.
In a statement released on Tuesday morning, U.S. Trade Representative Katherine Tai said that "over the past five months, USTR officials held robust and constructive consultations with Congress, government experts, a wide range of stakeholders, multilateral institutions, and WTO members."
Tai continued:
Real questions remain on a range of issues, and the additional time, coupled with information from the USITC [United States International Trade Commission], will help the world make a more informed decision on whether extending the ministerial decision to Covid-19 therapeutics and diagnostics would result in increased access to those products. Transparency is critical and USTR will continue to consult with Congress, stakeholders, and others as we continue working to end the pandemic and support the global economic recovery.
As Bloomberg reported, investigations of the sort that Tai wants the USITC to pursue "can take nine months to a year to complete," pushing the prospects for a comprehensive waiver of the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) well into 2023 or beyond.
Dr. Mohga Kamal-Yanni, policy co-lead for the People's Vaccine Alliance, said in response that "it is heartbreaking to see the Biden administration succumb to pressure from pharmaceutical company lobbyists and their henchmen in Congress."
"This moment of weakness will cost countless lives in low- and middle-income countries, leading to continued economic devastation."
"This moment of weakness will cost countless lives in low- and middle-income countries, leading to continued economic devastation," said Kamal-Yanni, "while a handful of pharmaceutical CEOs and shareholders will get even richer."
"The U.S. has had more than two years to meaningfully engage in WTO negotiations over access to lifesaving tests and treatments," she added. "Kicking the issue further into the long grass, just as the negotiating deadline approaches, is pathetic."
This sentiment was echoed by Arthur Stamoulis, executive director of the Trade Justice Education Fund.
"There have been at least 290,000 deaths from Covid-19 since the WTO punted on the question of global access to tests and treatments back in June," said Stamoulis. "How many more need to die before the U.S. joins the right side of history?"
"We're in the third year of the pandemic and billions of people worldwide still don't have access to Covid tests, vaccines, and medicines," Stamoulis continued.
Large swaths of the Global South have been deprived of lifesaving Covid-19 medical tools and remain completely unprotected, with less than 25% of people in low-income countries having received at least one vaccine dose to date.
Experts have long argued that pausing enforcement of the corporate-friendly TRIPS Agreement for the duration of the pandemic would remove the intellectual property barriers standing in the way of increased generic manufacturing. However, in June, Big Pharma-aligned policymakers--most of them from highly vaccinated rich countries--defeated a popular proposal to waive coronavirus-related patents to boost the global supply of jabs, diagnostics, and therapeutics.
Instead, the WTO, which operates on the consensus of its 164 members, adopted a watered-down alternative pertaining only to vaccines--described by critics as worse than the status quo--and vowed to decide whether to extend the decision to cover tests and treatments within six months. The Biden White House's new demand for a delay--in which they joined the European Union, United Kingdom, Japan, South Korea, Singapore, and Switzerland--comes just days before the December 17 deadline.
As Knowledge Ecology International director James Love pointed out on social media, the U.S. government blocked the proposed TRIPS waiver for tests and treatments after telling the World Health Organization that it is opposed to including intellectual property flexibilities in an emerging WHO pandemic treaty "because that's a conversation for the WTO."
\u201cYesterday the US government told the WHO they don't want intellectual property rights discussed in the WHO pandemic treaty, because that's a conversation for the WTO. Also, same day, blocked WTO agreement on exceptions for COVID 19. \n\n https://t.co/ryTFnvgYAL\u201d— James Love (@James Love) 1670304180
Meanwhile, the need for improved access to tests and treatments is particularly acute in poor countries, given the ongoing severity of global vaccine apartheid.
The WHO estimates that just one in every 50 tests is administered in low- and middle-income nations home to 84% of the global population. While publicly available data on treatment access is sparse, a recent analysis from Oxfam and the People's Vaccine Alliance shows that just a quarter of Pfizer's Paxlovid pill orders are destined for developing countries.
Pfizer's licensing agreement with the United Nations-backed Medicines Patent Pool enables other drugmakers to produce its pill for generic consumption in just 95 countries representing 53% of the global population. As a result, excluded countries, many of which are not wealthy, may be forced to pay $250 per course rather than $25.
Globally, the ongoing Covid-19 pandemic has caused more than 15 million deaths directly and indirectly, and the disease alone continues to kill roughly 1,500 people per day.
The profoundly inequitable allocation of medicines--fueled by high-income nations snatching up a disproportionate share of vaccines, tests, and treatments and pharmaceutical corporations refusing to share knowledge and technology--has exacerbated avoidable suffering. Artificially imposed scarcity and uneven distribution also enables the coronavirus to continue circulating and mutating, increasing the likelihood of a vaccine-resistant variant emerging.
A recent investigation revealed the extent to which Big Pharma has lobbied against a robust intellectual property waiver for Covid-19 jabs, diagnostics, and therapeutics--and worsened deadly inequality in the process.
Tai's "call for 'more information' cannot be an excuse for inaction," Stamoulis said Tuesday. "While pharmaceutical monopolies make billions, people are still dying, others are getting long Covid, the economy is suffering, and new variants remain a constant threat."
"It's long past time," he added, "for the Biden administration to support the modest changes to WTO pharmaceutical monopoly protections standing in the way of Covid test and treatment access around the world."
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Pending India-UK Trade Deal Could Upend Global Generic Drugmaking Efforts, NGOs Warn
If a leaked draft of the bilateral pact is accurate, said one critic, the agreement "risks India's ability to produce lifesaving medicines for millions of people around the world."
Nov 02, 2022
A coalition of leading British health and public development organizations warned Wednesday that a leaked chapter of a proposed India-U.K. Free Trade Agreement contains provisions that could devastate India's ability to produce lifesaving medications, a development that would in turn adversely affect Britain's National Health Service--which gets a quarter of its drugs from the South Asian country.
"We'd be signing our own death warrants if we agree to a deal with these terms--the government simply has to back down."
The leaked chapter revealed that the prospective trade pact--progress on which has recently languished amid British political volatility--will enable pharmaceutical corporations to "evergreen," or indefinitely extend, their monopolies and charge artificially inflated product prices for years after the expiration of a drug's initial 20-year patent.
Another provision would eliminate "pre-grant" patent oppositions, a critical check on unjustified patents. Yet another removes the requirement for patent-holders to disclose to Indian authorities information relating to relevant patent applications in other nations.
"In the interests of patients of the NHS and across the world, the U.K. must urgently rethink its approach and open negotiations to full public transparency and parliamentary scrutiny, including meaningful engagement on intellectual property provisions," the groups said in a letter to U.K. Secretary of State for International Trade Kemi Badenoch.
\u201cBREAKING: Today, UK civil society groups have written to @KemiBadenoch warning that provisions within a leaked text of the UK-India Free Trade Agreement, if adopted, would threaten the financial sustainability of the NHS and put lives at risk.\n\nFULL STORY: https://t.co/5kGsB6cAFL\u201d— STOPAIDS (@STOPAIDS) 1667403092
The letter's signers--who include members of groups like Global Justice Now, Just Treatment, Medecins Sans Frontieres U.K., Oxfam, and STOPAIDS--argued that the draft agreement's intellectual property (IP) protections "go way beyond what is required under international trade rules--namely the World Trade Organization's (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)."
"India's long-standing ability to produce quality-assured, affordable medicines for HIV, [tuberculosis], viral hepatitis, malaria, and other diseases, medicines that save millions of lives globally every year, relies upon its carefully drafted intellectual property laws and medical regulatory processes which balance the monopoly rights of manufacturers with everybody's right to health," the letter notes.
"India also supplies our NHS with 25% of all the medicines used to treat patients here in the U.K.," the signers added. "Any action that curtails India's ability to produce quality, cost-effective medicines also threatens the financial sustainability of our health service, and ultimately puts patients' lives at risk."
The letter asks Badenoch to:
- Immediately rethink your approach to IP trade agreements to prioritize the NHS and preserve affordable access to medicines globally;
- Refrain from proposals that include TRIPS-plus provisions that may have an impact on the production, registration, and supply of affordable, lifesaving essential medical products for the NHS and around the world;
- Ensure full freedom to utilize all available TRIPS flexibilities for public health and access to medicines, as previously committed to by all countries;
- Ensure that, as a result of the free trade agreement (FTA) with India, neither of the parties are required to amend their IP laws and policies in relation to medical technologies, including devices, patient data, pharmaceuticals, and biological medical products; and
- Open up all negotiation texts to public transparency and parliamentary scrutiny throughout negotiations, and commit to allowing full meaningful debate and votes in Parliament on all aspects of the agreement.
"As an NHS nurse, I know how its budget has been stretched to breaking point and beyond. Our patients use high quality, affordable medicines from India every day," Just Treatment patient leader Carol Webley Brown said in a statement.
"I simply cannot understand why the government would willingly push for changes through this FTA that would push up drug prices for the NHS and put its budget under even more pressure," she added. "That's unless they simply care about their friends in the industry more than the lives of NHS patients."
"We'd be signing our own death warrants," argued Webley Brown, "if we agree to a deal with these terms--the government simply has to back down."
\u201c\u201cThe UK government should withdraw it completely. India should stay vigilant and not allow barriers to affordable medicines to be written into FTA negotiations,\u201d - Leena Menghaney, MSF Access Campaign South Asia Head\n\nhttps://t.co/gKHSTyFRu1\u201d— MSF Access Campaign (@MSF Access Campaign) 1667386814
Dr. Andrew Hill, senior visiting research fellow at the University of Liverpool Institute of Translational Medicine, said that "the provisions set out in this leaked document would have extremely serious consequences for the NHS and global health, and the impacts would become more and more serious over time."
"By making it easier to secure patents and other forms of intellectual property monopolies on medicines, and much more difficult to challenge them, the U.K. government would be pushing the dramatic price-reducing effects of generic competition further and further into the future," he continued.
"Prices for the NHS will rise, patients will suffer," Hill added. "The naive idea that what is good for the pharmaceutical industry is good for patients and public health must be vigorously challenged. I urge the government to change course."
Baronnes Shami Chakrabarti, a member of the British House of Lords and human rights activist, said that "if accurate, this text doesn't just shame me as a British Asian, it risks India's ability to produce lifesaving medicines for millions of people around the world."
"I hope our prime minister knows what is being argued in his name and that India stands firm against corporate interests over people's lives," she added. "It is increasingly difficult to distinguish U.K. government statements from those of Big Pharma trade bodies. Our ministers resisted the Covid-19 vaccine intellectual property trips waiver that would have scaled up production and prevented many untimely deaths."
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