In recent years, a growing number of restrictions on digital trade around the world has caught the attention of U.S. policy makers.  On January 13, 2017, for example, the United States Trade Representative requested the International Trade Commission (“ITC”) to prepare a series of three reports on “the value of new digital technologies for U.S. firms and the impact of barriers to digital trade on U.S. firms’ competitiveness in international markets.”  The first of these reports, Global Digital Trade 1: Market Opportunities and Key Foreign Trade Restrictions, is a thorough introduction to the primary digital trade barriers that have emerged with the expansion of the digital economy, and to the industries affected most.

The ITC’s report identifies six general categories of regulatory and policy measures that create restrictions on digital trade in major markets:

  • Data protection and privacy, including data localization;
  • Cybersecurity;
  • Intellectual property rights;
  • Censorship;
  • Market access restrictions (g., low de minimis duty thresholds and unique technical standards for hardware and software); and
  • Investment measures (g., ownership restrictions, licensing and taxation policies, and local content requirements).

Specific sectors covered by the report include:

  • Internet infrastructure and network communication services;
  • Cloud computing services;
  • Digital content, search, and news;
  • E-commerce, digital payments, and records; and
  • Consumer communications services and devices.

The ITC’s second report, which will provide analysis of specific restrictions on “business to business” (“B2B”) products and services in key foreign markets, is due by the end of October 2018.  The final report is due by the end of March 2019 will provide similar analysis regarding “business to business” (“B2B”) products and services.