Susan Walsh/AP Photo
Sen. Ron Wyden, left, speaks during a Senate Finance Committee hearing last year on the high cost of prescription drugs. Wyden and others are promoting the senator’s top trade staffer for the post of deputy U.S. trade representative.
President-elect Biden is vectoring in on a choice for the critically important post of U.S. trade representative, and there are a lot of moving parts. A major player is Big Tech, since the next crucial round of trade negotiations will be all about e-commerce.
Will Amazon, Google, and Facebook, the most powerful global corporations in the history of the world, continue to have their way with us, using trade law as a means of constraining domestic regulation? Or will the U.S. and the EU join forces to add some rules on privacy, transparency, competition, and some liability for abuses?
The issue here is not just who is named to head USTR, but the key jobs just below the top one. Trade law is so intricate and specialized that the deep state and its corporate allies can frustrate nominal policy.
A disturbing harbinger, according to our sources, is that two top trade lobbyists for Amazon, who used to hold senior posts at USTR, are primed to go back in. David Roth, who was a senior policy adviser at USTR, is now director of international public policy at Amazon. And Arrow Augerot, who was deputy assistant USTR for congressional affairs, is now a director for Americas public policy at Amazon and a registered lobbyist.
If people like these populate key negotiator slots, they will undermine even a relatively progressive USTR chief.
The leading candidate to get that job, as we’ve reported, is Katherine Tai, the chief trade staffer for the House Ways and Means Committee. Tai is fairly progressive on key trade issues.
She has the strong backing of Sen. Sherrod Brown (D-OH), and progressive trade activists support her. Tai played a key role in improving the recent U.S.-Mexico-Canada deal (USMCA), and is a relative hard-liner on China.
But there’s a catch. Big Tech, other corporate interests, and Sen. Ron Wyden (D-OR), the senior Democrat on the Senate Finance Committee and on trade and tech issues, are promoting Wyden’s top trade staffer, Jayme White, to be deputy USTR.
Though Wyden is a liberal on other issues, on trade he has been a complete ally of Big Tech. Wyden was a principal author of Section 230 of the Communications Decency Act, which gives tech platform companies blanket immunity over content that is defamatory, fake, or incendiary.
(Trump, hoping to punish tech companies, which he views as in bed with Democrats, has been trying to repeal Sec. 230. With the possible exception of Trump’s China tariffs, this might be the only good Trump action in four years. And even here it’s a dubious effort, as Trump negotiated and signed the USMCA, which includes Sec. 230–style language.)
A Tai-White regime at USTR would follow an unfortunate pattern of appointing relative progressives for top jobs, and then giving the corporate crowd keys to the machinery. And when it comes to trade, the devil is in the details.
Retail electronic commerce is projected to grow to over $6.5 trillion by 2022. So when we talk about regulating cross-border data transmission and sales, we are talking about regulating capitalism. At the 2019 conference of WTO trade ministers, the effort to begin negotiations for standards under the auspices of the WTO stalled; but bloc-to-bloc negotiations will move forward, most notably between the U.S. and the EU.
Consider several key tech and e-commerce issues now front and center in pending trade negotiations:
Privacy. The EU’s General Data Protection Regulation is far better than U.S. law, but it doesn’t go nearly far enough. Will the next set of trade negotiations strengthen it, or gut it?
The Algorithm Will See You Now. Big Tech fiercely guards the secrecy of its algorithms. But suppose an algorithm is responsible for cross-border misinterpretation of a CT scan, or suppose an algorithm leads to racial profiling? In some circumstances, plaintiffs need to look inside that black box if they are to get relief. But existing trade law prohibits access to source codes, and the tech companies will fight to keep things that way, at consumer expense.
Investor-State Dispute Settlement. Provisions allowing corporations end runs to kangaroo counts to overturn national regulations as restraints of trade were standard in recent trade deals, until the USMCA, which repealed the investor-state provisions of NAFTA. Will Big Tech, Big Pharma, and Big Finance succeed in resurrecting investor-state in other trade deals?
Trade and Public Goods. The pandemic has revealed the urgency of treating vaccines as public goods. For decades, there has been an ongoing struggle between nations of the global South and Big Pharma, with the U.S. siding with pharma more often than not.
Antitrust and Competition Policy. Amazon, Google, and Facebook are best understood as a shared monopoly, carving up markets and buying out or crushing potential rivals. Under a progressive administration, we could have tougher competition and antitrust policy. Or Big Tech could use trade law to protect its market power and undermine domestic regulation.
Section 230. The aforementioned Sec. 230, giving tech platform companies blanket immunity, could be repealed or modified—or if Big Tech has its way, the rule could be locked in as part of a future trade deal and preempt domestic regulation.
Just this week, Facebook voluntarily began removing misinformation circulated about pandemic vaccines. If The New York Times published false news that caused medical harm, it could be financially liable. Why are Big Tech platform companies granted immunity so that we need to rely on their intermittent voluntary goodwill?
And will tech companies use their sheer economic muscle via trade to undermine domestic regulation in other respects? For instance, Amazon could dangle the prospect of locating a warehouse district in Mexico, provided that Mexico agree to challenge any U.S. effort to modify Sec. 230 as a trade violation.
All this is just the tip of the iceberg. As this short list suggests, the issues are potentially endless and the details and industry tactics byzantine. The next U.S. trade rep needs to be not only resolute, but deeply knowledgeable.
Gary Gensler, former head of the Commodity Futures Trading Commission, and a good progressive, has been making a run at heading USTR, despite having no background in trade. He’d be better than many of the alternatives. But even for someone as smart as Gensler, trade is not something you can learn by taking a crash course.
Until now, both Democratic and Republican administrations have used “free trade” for one purpose—to allow the largest global corporations not just to write the rules of trade for their own global advantage, but to use trade deals to hamstring domestic regulation as well. The fact that nominal liberals such as Sen. Wyden have been part of this consensus suggests just how revolutionary a change we are asking of the Biden administration.
At stake is whether democracies, acting in the public interest, will regain the ability to regulate capitalism.
