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The tech sector’s hopes for a speedy US-UK digital trade deal are dim


The UK’s hopes of striking a deal soon to deepen digital trade ties with the US have been buried in the diplomatic sands amid growing resistance to such pacts in Washington, tech industry insiders have warned.

Industry frustrations surfaced as Prime Minister Rishi Sunak landed in Washington for a meeting with President Joe Biden, where the two leaders are expected to seek closer economic ties.

Tech groups hope London and Washington make progress toward a deal to boost digital transactions, even as they have ruled out talks about a more comprehensive free trade agreement for now.

Had in Aberdeen, Scotland, USA and UK last April agreed to set out an “ambitious roadmap” to deepen trade relations, including “harnessing the benefits of digital commerce”.

But critics say the Biden administration is now softening prospects for a UK digital deal as some lawmakers on the left of the Democratic party become increasingly hesitant about provisions that would benefit big tech companies.

“The reality is that nothing has happened since the joint statement in Aberdeen because the US is unwilling to substantively participate in digital trade talks for domestic political reasons,” said Sabina Ciofu, the head of the International Policy and Trade Program at the lobby group. TechUK.

Under former President Donald Trump, the US included sweeping provisions to boost digital trade in the USMCA agreement with Mexico and Canada, and entered into a standalone digital trade deal with Japan.

These deals include provisions to provide legal certainty over data flows, prohibit restrictive practices such as requiring data localization, and formalize regulatory cooperation.

Biden has proposed a digital trade chapter in the Indo-Pacific economic framework, his plan to strengthen US economic ties in the region. But as a bad omen for proponents of a pact with the UK on digital trade, US business groups expressed concern that Biden is now “faltering in his promotion of high-quality digital trade rules” in IPEF, according to a letter sent last month.

Biden is facing criticism from the left for considering even more open digital commerce around the world. Last month, US Senator Elizabeth Warren, an influential Democrat from Massachusetts, accused the White House from allowing “Big Tech” companies to manipulate digital trading regulations in a way that would restrict the US government from promoting competition and regulating the industry.

“While we appreciate your commitment that digital trade negotiations will not conflict with the active work of the federal government on technology policy, we remain concerned that Big Tech companies are advocating an approach to digital trade that does just that,” wrote Warren in the letter. , which was signed by six other Democratic legislators. The US Trade Representative and the White House National Security Council declined to comment.

A US official disputed any connection between pressure from lawmakers and the Biden administration’s position. “I would push back strongly on the idea that we oppose a digital trade deal with the UK just because of Congress,” the official said.

In addition, the US is not ruling out even deeper digital ties to be discussed in the coming months as Biden’s and Sunak’s trade officials begin to shape specific areas for improving their economic relations.

Nigel Huddleston, British Secretary of State for International Trade, told reporters on the brink of a meeting of Commonwealth trade ministers this week in London that “constructive talks” were still taking place on digital trade.

A tech insider suggested that the UK could still get a deal with the US on digitizing trade papers, with legislation already being passed by the UK parliament. It is also possible that the US and UK will agree on closer cooperation to tackle the rise of artificial intelligence.

But these would fall far short of a digital trade deal, leaving technology and trade lobbyists on both sides of the Atlantic alarmed by the lack of movement.

“(This) is yet another example of the administration’s (Biden) discouraging hands-off approach to trade. A US-UK trade deal would be an opportune opportunity to set a new global benchmark for modern, inclusive and digitally-centric commerce in the 21st century,” said Jason Oxman, the CEO of ITI, the Washington-based American technology lobby group. .

Jake Colvin, president of the National Foreign Trade Council, a Washington-based lobbying group, said, “It is no secret that the Biden administration is under pressure to relinquish US digital trade leadership,” warning that a such a position would only lead to “discrimination”. against American companies “from Brussels to Beijing”.

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