LaHood sponsors bill to beat back restrictive digital trade practices

To help prevent the growing number of constraining digital trade policies around the globe, U.S. Rep. Darin LaHood (R-IL) recently offered legislation to modernize the Generalized System of Preferences (GSP), a trade program that provides non-reciprocal, duty-free treatment for certain U.S. imports from eligible developing countries. 

“Digital trade is an engine for economic success in the United States and around the world,” Rep. LaHood said on Tuesday. “By modernizing the GSP, this bill can support open digital trade policies that expand economic growth in developing countries and advance American interests around the world.”

The congressman on Jan. 12 sponsored the Digital Trade for Development Act, H.R. 6990, which would modify the bases for ineligibility for countries to benefit from the GSP, according to the bill’s text. The last authorized GSP program expired on Dec. 31, 2020. 

Created by Congress in the 1970s to spur economic development in poor countries through trade, the GSP selects beneficiary developing countries (BDCs) based on certain mandatory eligibility criteria.

Evidence suggests that several BDCs are enacting similar digital trade policies to China’s Cybersecurity Law and related measures, while at the same time benefiting from duty-free access to American markets under the GSP, according to a bill summary provided by Rep. LaHood’s staff.

If enacted, H.R. 6990 would incorporate digital trade as a statutory consideration in designating BDCs under the GSP, and permit the U.S. Trade Representative to prevent countries from receiving BDC status if, for example, they restrict the free-flow of data or force other restrictive e-commerce policies to the detriment of U.S. strategic interests aimed at technology sectors, the summary says.

BSA | The Software Alliance and the Information Technology Industry Council endorsed the measure.