Obama administration officials believe a major trans-Pacific trade deal struck early Monday morning will help companies protect their digital property abroad and preserve online privacy.
Six years in the making, the Trans-Pacific Partnership (TPP) between the United States and 11 other Pacific Rim countries is expected to lower trade barriers and open up new markets for U.S. exporters.
Backers of the deal say these guidelines will establish rules of the road to help counteract the massive digital theft of corporate secrets that has plagued U.S. firms and made companies hesitant to operate in certain overseas markets.
“By setting high standards on labor, the environment, intellectual property, and a free and open Internet, this agreement will level the playing field for American businesses and workers,” said Secretary of State John KerryJohn KerryEgypt’s death squads and America's deafening silence With help from US, transformative change in Iran is within reach Ellison comments on Obama criticized as 'a stupid thing to say' MORE in a statement Monday.
In a May interview with The Hill, Deputy Commerce Secretary Bruce Andrews called the TPP “critically important” for cybersecurity.
“What TPP is doing is writing the new international norms” on cybersecurity, which he said “will allow [companies] to do what they need to do to protect their data.”
The deal is expected to include more commitments to let data flow unimpeded between borders and commitments to not require that data is stored locally.
“That’s something that’s really important — giving companies the flexibility to build the security solution for their business,” Andrews said.
But China, allegedly the worst perpetrator of digital intellectual property theft, is not part of the TPP.
The deal would have no direct impact on the rampant Chinese hacking that analysts believe make up a large part of the $300 billion-plus American businesses lose each year to intellectual property theft.
It would also not address a vague national security law Beijing approved in June that gives officials authority to ensure certain technologies are “secure and controllable.” Foreign companies have argued the law could force them to use government-approved encryption and hand over access to customer data and proprietary source code.
These issues were a major focus of Chinese President Xi Jinping’s recent state visit to Washington. The two countries’ leaders eventually agreed on a “common understanding” not to conduct or support industrial hacking.
President Obama on Monday argued the agreement will put pressure on China to brings its standards up to match the TPP, which covers 40 percent of the global economy. Several of China’s nearby neighbors, such as Japan, Malaysia, Vietnam and Singapore, are signed on to the deal, putting further pressure on the Asian power.
“We can’t let countries like China write the rules of the global economy,” Obama said. “We should write those rules, opening new markets to American products.”
The president has even suggested China is already exploring joining the TPP at some point.
“They’ve already started putting out feelers about the possibilities of them participating at some point,” he told NPR’s “Marketplace” in June.
Even absent China joining the TPP, Joshua Meltzer, a Brookings fellow focusing on the global economy, told The Hill the framework’s intellectual property-theft guidelines will play a major role in U.S.-China economic discussions.
“That’s going to start to be part of the context that’s going to define that relationship,” he said.
Big tech industry trade groups on Monday mostly stood behind the administration's argument that the TPP will help American companies better protect their data. Many latched onto the data transfer components.
“Importantly, the TPP contains modern cross-border data flow provisions which are critical to today’s economy,” said the Software and Information Industry Association (SIIA), whose members include Adobe, Facebook and Google.
The Information Technology and Innovation Foundation (ITIF), a think tank that has received funding from technology companies such as Google and IBM, gave the overall deal mixed reviews but lauded “the new protections against trade secret theft.”
The measures will “help ensure that future generations of technological innovation continue to drive a robust global economy,” said Stephen Ezell, ITIF’s vice president for global innovation policy, in a statement.
“Such intellectual property protections are essential for global trade to thrive, for without them, there would be little incentive to take on the risk and expense of innovation," he added.