With the release of the full text of the Trans-Pacific Partnership (TPP) trade agreement last November, the American people and their representatives now have an extensive opportunity to analyze the specific provisions of the proposed deal. In addition, as required by recent trade legislation, the U.S. International Trade Commission (USITC) is conducting a detailed, independent review of the likely economic impact of the TPP on specific industry sectors and the overall U.S. economy.
In recent comments filed in the USITC investigation, the Progressive Policy Institute (PPI) urged the Commission to pay particular attention to the beneficial economic effects of the TPP’s groundbreaking provisions on small business trade, international e-commerce, and the digital economy.
PPI has highlighted in recent reports the transformative role that digital tools—including Internet platforms like eBay—are playing in “democratizing” trade. Increasingly, smaller, digitally enabled American exporters can often sell products and services to customers around the world as easily as their large, established competitors.
But, for the digital economy to continue to transform trade, countries must resist a growing trend toward “digital protectionism.” As PPI’s submission explains, the TPP would support the continued growth of digital trade through groundbreaking rules that would require countries to allow commercial data flows; restrict “data localization” requirements that mandate where data or facilities must be located; and require privacy, consumer protection, and other rules to promote more secure and robust international e-commerce.
PPI’s comments also underscore the importance of the TPP’s many pioneering provisions to help small and medium-sized enterprises (SMEs) to export. These include the creation of a special committee to assure that the agreement works for SME traders; a requirement that countries create user-friendly digital information portals to assist SME traders; and eliminating or significantly reducing high duties, regulatory barriers, and customs delays that the studies by the Commission and others show can place disproportionate burdens on smaller traders.
PPI’s submission emphasizes that these and other TPP provisions have significant potential to support substantial expansion of American SME exports and economic growth that is shared more widely by more Americans. Studies by the Commission and others have found that smaller firms that export are more productive, hire more employees, and pay higher wages than non-exporting SMEs. And PPI’s own analysis shows that woman- and minority-owned firms that export employ three to five times more workers—and pay salaries some 60 percent higher—than their non-exporting counterparts.
In short, TPP points toward the next frontier in international trade—new opportunities to promote digital trade and engage more small firms and entrepreneurs in global commerce. The International Trade Commission should assess the potential of such new forms of trade to reinvigorate U.S. economic growth and competitiveness.
Gerwin is senior fellow for trade and global opportunity at the Progressive Policy Institute.