Washington, D.C. – Congressman Darin LaHood (IL-16) introduced the Digital Trade for Development Act – forward-looking legislation that modernizes the Generalized System of Preferences (GSP), promotes economic growth around the world, and prevents the proliferation of restrictive digital trade policies. The bill text can be read here.
"Digital trade is an engine for economic success in the United States and around the world," Rep. LaHood. "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."
Created by Congress in the 1970s to spur economic development in poor countries through trade, the GSP is a trade program that provides nonreciprocal, duty-free treatment for certain U.S. imports from eligible developing countries. Beneficiary developing countries (BDCs) are selected based on certain mandatory eligibility criteria. The last authorized GSP program expired on December 31, 2020.
Evidence suggests that several developing countries are enacting similar digital trade policies to China's restrictive Cybersecurity Law and related measures at the detriment to their own economic interests. These countries benefit from duty-free access to American markets under the GSP while employing digital policies that undermine American values, jobs, and exports. Updating and reforming the GSP to support sound digital trade policies will advance American strategic interests around the world and promote economic development in the developing world.
The market access provisions in the last authorized GSP do not reflect the realities of the 21st-century economy. The Digital Trade for Development Act would incorporate digital trade as a statutory consideration in designating beneficiary developing countries (BDCs) under the GSP. The legislation would permit the U.S. Trade Representative (USTR) 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.
"BSA commends Congressman LaHood for reintroducing the Digital Trade for Development Act. This legislation modernizes the Generalized System of Preferences to – among other things – promote protections for the privacy of personal information and extend the benefits of digital trade to all. The United States should stand by these important priorities and should remain vigilant against digital barriers that would hinder sustainable development outcomes or limit the benefits of digital transformation for all," added BSA | The Software Alliance.
“Digital trade supports the modern economy, enhances productivity, and enables consumers to benefit from the global marketplace,” said ITI President and CEO Jason Oxman. “Congressman Darin LaHood’s Digital Trade for Development Act will modernize the global trade system and help counter digital trade barriers worldwide. We’re grateful for Congressman LaHood’s leadership on this critical issue and urge all governments, including the United States, to implement the policy principles outlined in the legislation.”
