Washington, D.C. – Congressman Darin LaHood (IL-18) today introduced the Digital Trade for Development Act, forward-looking legislation that would modernize the Generalized System of Preferences (GSP) to support open digital trade policies that promote economic growth around the world by adding digital trade as a statutory consideration under GSP eligibility criteria.
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 on the basis of certain mandatory eligibility criteria.
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 sound economic development in the developing world.
The market access provisions in the GSP do not reflect the realities of the 21st-century economy. The Digital Trad 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 BCD status if, for example, they restrict digital trade to the detriment of U.S. strategic interests through predatory industrial policies that target technology sectors.
"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."
“Digital trade and cross-border access to technology can drive economic empowerment and resilience across beneficiary developing countries. It’s important for USTR to have ongoing conversations with developing countries about these benefits. We are pleased Representative LaHood introduced the Digital Trade for Development Act, which brings welcome attention to the benefits of digital trade and updates the Generalized System of Preferences for today’s economic opportunities.” said Victoria Espinel, President and CEO, BSA | The Software Alliance.
"The crucial nonpartisan reforms proposed by Representative LaHood modernize the GSP program by supporting open and forward-looking digital trade policies to promote economic growth in the developing world," said K. Dane Snowden, President & CEO, Internet Association.
"A free and open internet is a key component of a successful development strategy in the modern global economy. We're grateful to Representative LaHood for advancing this effort to modernize the GSP statute in another example of his steadfast leadership on digital trade issues as co-chair of the Digital Trade Caucus," said Jason Oxman, ITI President and CEO.
Full bill text can be read here.
Rep. LaHood serves on the Subcommittee on Trade for the Ways and Means Committee, the most powerful – and the oldest – committee in the House of Representatives. He is a co-chair of the Digital Trade Caucus and the U.S.-China Working Group. He also serves on the House Intelligence Committee.
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