Strong Digital Trade Commitments are Critical to Success of U.S.-Brazil Trade Discussions

As the United States and Brazil make progress toward a trade agreement, both countries have a significant opportunity to advance meaningful rules-based digital trade commitments that reflect the importance of data and technology in this bilateral relationship. We recognize the challenge that COVID-19 presents to both countries during these negotiations, and we fully appreciate that the first priority of both the U.S. and Brazilian governments is to address the medical and economic response to the coronavirus crisis. We believe that the shared response to this pandemic will be bolstered by closer trade and economic ties, and we stand ready to work with both governments on those crucial efforts.

At a time when barriers to digital trade are proliferating and a wide range of economies – including both the United States and Brazil – are engaged in the negotiation of digital trade commitments at the WTO, the need for agreement on strong disciplines in this bilateral context is timelier than ever. Through these trade discussions, Brazil and the United States can demonstrate that, beyond facilitating trade, investment and connectivity, high-standard digital trade provisions can drive development and improve standards of living.

Brazil’s innovation agenda – its National Digital Transformation Strategy, National AI Strategy, E-CIBER Cybersecurity Strategy, and National IOT Plan – sets it apart from its neighbors as a leader on innovation and digital issues. However, many of Brazil’s trading partners are more advanced in pursuing these concepts in a bilateral or global trade context, and the time is ripe for Brazil to join its peers in committing to strong trade – especially digital trade – commitments in these discussions.

We believe that in order to successfully seize the opportunity that the enhanced discussions under the Agreement on Trade and Economic Cooperation (ATEC) provide, as well as to resolve specific trade issues faced by tech companies, Brazil and the United States’ advanced trade discussions must incorporate the essential foundational principles of digital trade, in particular those that:

  • Strengthen transatlantic data flows and prohibit data localization;
  • Prohibit tariffs and customs formalities on electronic transmissions and enshrine non-discriminatory treatment of digital products, including with respect to digital taxation measures that are discriminatory in nature;
  • Ensure protection of personal data, taking into account best international practices for privacy and interoperability;
  • Strengthen and expand good regulatory practices for digital trade, including as a means to promote emerging technologies like AI and machine learning, in accordance with the OECD principles;
  • Promote governmental cooperation and risk-based approaches to cybersecurity;
  • Prohibit requirements to disclose source code, algorithms, and proprietary information relating to cryptography;
  • Establish limitations to intermediary liability for users and suppliers of interactive computer services to support and safeguard digital supply chains;
  • Facilitate access to and use of open public data in minable, machine-readable formats to spur adoption of AI and other emerging technologies; and
  • Enshrine acceptance of electronic contracts, signatures and authentication.

We also encourage the governments to use these discussions to resolve specific trade concerns, such as those that the tech industry recently identified for the Office of the U.S. Trade Representative (USTR), including preventing localization requirements, such as for data, testing, or certification, reducing tariffs on ICT products, and avoiding ill-fitting regulations on value-added services.

As the two governments move forward in their bilateral trade discussions, we encourage the development of strong, rules-based commitments necessary to deepen the U.S.-Brazil bilateral trade and investment relationship and ensure its resilience in the modern, data-driven economy. We hope that these discussions can both set Brazil and the United States apart as leaders in this important space.

Public Policy Tags: Trade & Investment