Cape News

As prepared for delivery

“Thank you, Ranking Member Blumenauer, Subcommittee Members, and our witnesses, for being here today. I appreciate you all taking the time to discuss the need for U.S. leadership in establishing and enforcing strong digital trade rules.

Technology products are a crown jewel of American competitiveness. If our tech sector was its own country, its economy would be the 8th largest in the world—larger than even Canada or Russia. It employs 8.9 million Americans and pays 33 percent more than other industries on average.

However, our status as an innovation powerhouse is under threat. In recent years, our strategic and economic rivals have sought to erode America’s competitive edge through a series of discriminatory digital trade and tax measures targeting American companies. There is no question this is contrary to our national interest.

This is why I was so concerned last October when the Biden Administration announced it was no longer supporting core, bipartisan digital trade rules in negotiations at the World Trade Organization and in the Indo-Pacific.

A recent poll found 86 percent of American voters believe it’s important for the U.S. to lead in writing global rules for technology. Yet, where we should be leading on technology rules, America is retreating. Where we should be arguing for our values in the face of digital authoritarians, we are silent. And where we should be working with allies, we are leaving likeminded partners out to dry.

Even more concerning, it has been almost a year since USTR announced this policy change, yet the Administration has gone radio silent on what our digital trade policy should look like. Predictably, WTO partners have moved on without the United States. At USTR’s insistence, digital trade is also off the table in ongoing negotiations with Kenya despite the chance to set a gold standard with this important partner and developing nation.

At the same time, it seems like our Administration is out to lunch as foreign governments treat American companies like a piggy bank by imposing new Digital Services Taxes. It is unacceptable Canada, one of our closest trading partners, is now collecting its DST with little response by the U.S. government. Make no mistake; the new USMCA dispute against Canada’s DST is a positive step but it is too little too late. We should have been ready to act immediately when Canada proceeded unilaterally blatantly ignoring a series of warnings from Congress and our executive branch.

Fecklessness on trade enforcement signals to foreign governments that aiming trade barriers at U.S. firms is fair game. Look no further than the European Union which continues its regulatory assault against American enterprise. For example under the Digital Markets Act six companies are designated for increased regulation as “gatekeepers” … five are American one is Chinese and none are European. The Digital Services Act similarly targets American innovators.

Yet the Biden Administration has turned its head the other way and in some cases has even sent agency officials to assist the EU in implementing these laws. This sort of collusion to undermine American companies is unacceptable Discriminatory actions against U.S companies should be met with a firm response not a helping hand I’ll close with this America needs to return to table We need get back negotiating smart trade agreements that support innovators – agreements with real teeth Further US Government must have will enforce them We need make sure foreign governments know discriminatory actions will be met swift decisive response from government supports job creators.”