October 26,2023

Crapo and Colleagues Condemn Biden Administration’s Decision to Cede U.S. Digital Leadership to China

Washington, D.C.—Senate Finance Committee Ranking Member Mike Crapo (R-Idaho) and Finance Committee members Chuck Grassley (R-Iowa), John Cornyn (R-Texas), Tim Scott (R-South Carolina), Steve Daines (R-Montana), Todd Young (R-Indiana), John Barrasso (R-Wyoming), Thom Tillis (R-North Carolina) and Marsha Blackburn (R-Tennessee) issued the following statement in response to the U.S. Trade Representative’s (USTR) decision to end U.S. support for combatting China’s predatory practices in international digital trade negotiations. 

“We have warned for years that either the United States would write the rules for digital trade or China would.  Now, the Biden Administration has decided to give China the pen. 

“The USTR announced in Geneva that it will abandon support for proposals made during the Trump Administration to allow free data flows between countries.  In so doing, USTR, which touts a ‘Worker-Centered Trade Policy,’ is choosing to side with China over the 8 million Americans who work in the digital economy and generate 10 percent of U.S. GDP.  China made clear it opposes free data proposals precisely because it wants the right to require all data be stored under whatever terms China’s laws or regulations may dictate, including forcing data to undergo government security reviews.  China’s laws and regulations routinely facilitate technology theft, human rights abuses and the loss of American jobs. 

“The Biden Administration’s claim that it wants to ensure ‘policy space’ is spurious.  The Trump Administration’s proposals—supported by a number of U.S. allies—explicitly permit legitimate public policy regulation of how companies might handle customer data.  The United States-Mexico-Canada Agreement (USMCA), which passed Congress overwhelmingly, also includes these commitments.  Unfortunately, the only party getting any ‘space’ here is China, and that space allows China to assume the leadership role formerly held by the United States.

“USTR not only failed to consult with Congress before reversing its policy on free data flows, but misled it.  As recently as this weekend, USTR officials told congressional staff that they had not abandoned support for negotiating the free data flow commitments at issue.      

“Regrettably, we are not surprised.  This is simply one of the many instances where USTR fails to engage with Congress—even though Congress has the constitutional responsibility for trade.  Moreover, Ambassador Tai makes clear in her speeches and through her actions that foreign countries are free to discriminate against U.S. companies and workers as long as these countries and USTR can concoct an excuse.  Failing to stand up for America and against foreign discrimination—particularly from China—is contrary to the USTR mission.  We, however, will work, through Congress, to ensure the American people have the agency they need and deserve.”