Senate Finance Republicans urge president to negotiate digital trade rules with Asia

Republicans on the U.S. Senate Finance Committee called on the Biden Administration to show leadership on trade by beginning to negotiate rules for digital trade with U.S. allies in the Indo-Pacific.

“Our refusal to get into the game to set the rules for trade in the Indo-Pacific encourages potential partners to move forward without us and ensures China will hold the reins of the global economy,” stated a Nov. 8 letter from the senators to President Joe Biden. Among the 14 Senate Republicans who signed the letter were U.S. Sens. Bill Cassidy (R-LA), Steve Daines (R-MT), Rob Portman (R-OH), Todd Young (R-IN), John Thune (R-SD), Richard Burr (R-NC), and Tim Scott (R-SC).

The digital rules, the lawmakers said, must reflect American values and rein in China’s abusive trade practices. “These rules must ensure free flows of data, prohibit discriminatory measures, including duties and taxes, support consumer protection, promote cybersecurity, protect human rights, combat censorship, and preclude governments from forcing the transfer of proprietary source code and algorithms,” the senators wrote.

The United States should build on the digital trade chapter that was negotiated as part of the United States-Mexico-Canada Agreement to establish the type of rules needed in the Indo-Pacific, the senators added.

The lawmakers warned that China could someday become a member of both major trade blocs in Asia, the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Transpacific Partnership, which is a “strategically unfavorable position to be in” for the United States.

“If this challenge is left unanswered, China will continue to make headway in its strategy to build a China-centric economic order and displace the United States from its pre-eminent position in international affairs,” the letter said.

A digital trade agreement with U.S. partners in the Indo-Pacific would be a positive first step, the letter said. “To that end, we seek a dialogue so we can work together to move forward on a plan to ensure that the United States—not China—writes the rules for digital trade in the 21st Century,” the Senate Republicans wrote.