Susan Walsh/AP Photo
U.S. Trade Representative Katherine Tai speaks during a meeting with Japan’s minister for economy, trade, and industry, January 6, 2023.
Recently, I wrote about how Big Tech lobbyists redefined the concept of “digital trade” and used it for their own ends, to protect the profitability of their enterprises and make it impossible for signatory countries in trade deals to use legislative ends to protect other things, like personal privacy or the rule of law.
As if on cue, last week the office of Sen. Elizabeth Warren (D-MA) put out a report showing the enduring power of Big Tech in trade deals, following exactly the usual playbook. The report also shows how the leading officials around U.S. trade representative (USTR) Katherine Tai, who is generally seen as in favor of a progressive trade agenda that breaks with the past, aren’t serving her well, at least in the digital economy arena.
The report mostly involves a tranche of emails obtained under the Freedom of Information Act by the progressive coalition Demand Progress. The emails show former USTR and Commerce Department officials, now working for tech firms like Amazon, Google, and Facebook, setting meetings with current leadership and discussing trade deals under active negotiation.
This is precisely the dynamic that sociologist Wendy Li described in a recent research paper, detailing the cognitive capture Big Tech achieved mainly through persistent meetings, discussions, and social conversations. That constant contact allowed lobbyists to infiltrate the minds of public officials and get their beliefs adopted as official policy. In fact, Warren’s paper quotes from Li’s work specifically.
What’s interesting here is who Big Tech is turning to as they initiate this work. They are mostly hitting up career staff and Tai’s lead deputies. While Tai herself has talked to lobbyists from Amazon and Google, you definitely feel in these exchanges some pressure from below. This presents a problem for Tai, who has an agenda that’s at odds with corporate wishes, but a leadership team in her own office that’s more aligned with them.
This matters right now because USTR and the administration are negotiating the Indo-Pacific Economic Framework (IPEF), which Warren and other Democrats in Congress have previously criticized for a digital trade chapter that would limit the ability for governments to set national policy on tech platforms.
The report does a good job of laying out Big Tech’s hiring spree of former officials who are well positioned to influence policy. Two officials who served as deputy USTR—Michael Punke (who was also U.S. ambassador to the World Trade Organization) and Arrow Augerot—work for Amazon, along with former senior policy adviser to USTR David Roth. (Punke and Augerot show up repeatedly in the emails.)
Augerot and Roth were actually in consideration for the top deputy slots at USTR, as was Behnaz Kibria, a senior policy counsel at Google who also is well represented in the emails. Such an open collaboration with Big Tech was not possible, so instead those deputy slots went to Jayme White, who came from the office of tech-friendly Sen. Ron Wyden (D-OR), and Sarah Bianchi, a former investment manager at BlackRock and a lobbyist for Airbnb, who had little experience with trade policy before going to USTR (it was mostly just a landing spot for an Obama holdover).
It’s not hard to see the outlines of a bargain here, where progressives would get the Cabinet official and the corporate wing would get the deputies. Sources have indicated to the Prospect in the past that Bianchi and White were not Tai’s choices.
Sen. Elizabeth Warren’s report shows the enduring power of Big Tech in trade deals.
In addition, as Li demonstrated in her paper, career staffers at USTR were brought around to Big Tech’s way of thinking about digital trade policy—that any regulations impeding tech platforms are illegal trade barriers, and that countries should not restrict the usage of personal data or impose any legal liabilities on digital platforms.
And so the 128 pages of internal emails mainly show communications between USTR career staff, or top deputies like Bianchi and White, and these revolving-door tech lobbyists, going all the way back to the first months of the Biden administration. The frequency of the communications and meetings suggest that the government and these lobbyists are something like a team, working together on a digital trade policy they each sustain.
Contact isn’t all initiated from one side, either. While tech lobbyists are of course seeking meetings, offering briefings, getting clarity on rumors and information, and just trying to get in front of the principal decision-makers, often the communications start from the government side. Whenever some development on trade policy transpires, government officials go to the representatives of these giant companies, seeking advice and consultation.
There’s “an upcoming opportunity to touch base with Mexico on the fintech measure and so we wanted to see if you all may have any updates since the measure has been finalized,” writes USTR director Sarah Ellerman to Kibria, the Google rep, in March 2021. Leah Liston, another USTR director, asks Amazon’s Ari Giovenco if his team has “input” for an upcoming meeting with Mexican officials in June 2021. That same month, USTR’s Kenneth Schagrin asks Giovenco for an update on Amazon’s “consultations with the Saudis.”
However narrow these discussions are intended to be, they don’t usually end there: A meeting between Tai and Amazon’s Punke intended to cover Punke’s time as WTO ambassador and “how you approached the job” is later referenced in the context of Punke raising the topic of Mexico’s “de minimis” standard, an important exemption from cross-border inspection and fees for goods up to a certain value, which Amazon has been abusing to bring millions of packages per day into the U.S. without customs duties.
There’s tons of flattery and offers of support. But eventually, we get to the heart of things. Google’s Karan Bhatia writes Tai on August 5, 2021, to complain about proposed legislation in South Korea preventing dominant app stores from forcing developers to essentially pay tolls for access. Bhatia says this “would have the effect of prohibiting U.S. business models and advantaging local providers,” even though it would affect a Korean app distributor as well. Bhatia just asks Tai to raise concerns with Korean officials. Tai replies that the issue “is on my radar” and that she will provide updates in the future. Another email refers to a discussion between Augerot and White on the “DMA,” an acronym for the Digital Markets Act, an EU regulation on the market power of the tech platforms which industry has been trying to gut.
Several communications between lobbyists and White or Bianchi cite IPEF specifically. That is a live negotiation where the current digital trade chapter very much reflects the industry line of removing any “trade barriers” to digital platforms. In one instance in the emails, a lead assistant to Bianchi writes Google’s Behnaz Kibria to “speak with experts like yourself” about IPEF, and “to further discuss the digital element of the strategy.”
White and Bianchi are the highest-ranking officials in USTR outside of Ambassador Tai, who is going to hear from industry all the time as well. If the advice Tai gets from her own staff and leadership team mirrors what she hears from corporate America, it’s hard to be grounded on policy. When industry gets their political intelligence directly from career staff, they can make informed pitches for their preferred position. This makes it far more likely that, regardless of Tai’s outlook, those perspectives will be reflected in the policy.
That’s the position Tai finds herself in. Commitments to reinvent trade aside, she has official advisory panels stacked with industry mouthpieces, a career staff that long ago bought into the arguments lobbyists peddle on digital trade, a legacy of existing and enforceable deals that toe the industry line, and a set of top deputies who seem quite receptive to Big Tech’s charms as well.
Sen. Warren makes a number of recommendations in the report, including improved transparency for industry meetings and better guardrails on the revolving door (which would require legislation that isn’t happening this Congress). But the biggest recommendation from Warren is that USTR should just “reject the Big Tech agenda.” The problem is, it’s hard to separate Big Tech’s agenda from USTR’s. That’s the whole point.
