The time is ripe for the U.S. to negotiate or join a digital trade agreement that advances U.S. internet standards of openness and democracy, as opposed to China’s autocratic standards. Such an agreement also must be worker-centric, protecting the rights of workers and small businesses.
The Biden administration has pledged that new trade policies and agreements must be worker-centric. This term includes more robust labor protections but is part of a larger initiative to develop trade policies that allow the balance of benefits to accrue more to workers and less to large corporations. New digital trade policies can be crafted to fit into this framework, addressing the needs of workers and small businesses in the digital economy.
A worker-centric digital agenda starts at home. The digital economy poses three key labor challenges. First, we must address America’s deep digital divide — one that hits workers from underserved communities especially hard. All citizens must have access to digital devices and broadband, and digital training must be inclusive and accessible to all.
Next, Trade Adjustment Assistance (TAA) should be modernized to meet the needs of digital workers who lose their jobs because of trade. TAA should be made permanent and cover the full range of service workers — from truck drivers to call center workers, to those service employees tied to a factory which moves overseas. It also should emphasize digital training to equip workers for the new economy.
Third, we must recognize that the digital economy has introduced a new category of gig workers who provide on-demand work, services or goods. Global gig-economy transactions are forecast to grow by 17 percent annually to around $455 billion by 2023. These workers typically lack health care and other traditional employee benefits. Policymakers must ensure that they have the same labor rights and benefits as traditional employees.
In addition to investing in workers, we must invest in small businesses. In 2020, 60.6 million U.S. employees worked for small businesses — almost half of the private sector workforce. The digital transformation has been especially rapid for small- and medium-sized businesses (SMEs). Facilitating access to technology and training for small business owners is an important way to build a more inclusive economy.
Worker-centric digital trade policies must start with expanded stakeholder representation in setting policy, bringing in small businesses and labor representatives to refocus priorities and create worker-centric outcomes.
Future digital agreements also must contain language committing parties to upholding the highest labor standards at home and abroad. The needs of workers abroad must be addressed, especially in lower-income countries and including funding for trade capacity-building to ensure that these workers can reap the benefits from trade.
A worker-centric trade agreement should remove barriers to digital participation for disadvantaged socioeconomic groups. Making digital agreements work for SMEs, by simplifying and digitizing trade formalities, is essential. The Digital Economy Partnership Agreement (DEPA) between Singapore, New Zealand and Chile includes provisions on digital inclusion and SMEs.
China has been engaged in non-market practices in its Digital Silk Road Initiative to sell its technologies throughout the developing world. A digital agreement must create disciplines for subsidies and state-owned enterprises, practices used by China and copied by many other countries.
The heart of a worker-centric digital trade agreement are governance provisions that will foster the responsible use of technologies and protect workers and other online users. Online privacy has become an urgent worker concern because many employers use artificial intelligence, facial recognition and other technologies to monitor employees’ activities and automate supervision. The U.S. needs federal privacy legislation, and a digital agreement must include language to protect workers’ privacy and data. Agreements should encourage governments to develop balanced regulations so that the use of emerging technologies is transparent, fair and human-centric.
Cybersecurity never has been more important since COVID-19 has forced more business, health care and schooling online. Strengthening U.S. cyber protection means investing in talent and training workers for the future. Cooperation across borders is essential to mitigating digital security risk.
A worker-centric digital trade agenda must have a comprehensive approach to data flow to build trust. It should include provisions to protect the movement of data across borders, remove restrictions forcing local data storage, and subject data flow to robust security and privacy standards. The U.S. and its trading partners should guard against the export of personal data to third parties or countries that are likely to use this data to harm people.
Keeping the internet a safe and trusted medium is critical to our democracy and its values. New challenges in foreign markets have emerged, as governments misuse technology regulations to surveil political dissidents, suppress speech and undermine human rights. We need a smarter approach to promoting effective content-moderation practices and minimizing harmful content online, while continuing to promote free expression and political discourse. Language similar to the Christchurch Call and G-7 Internet Safety Principles should be in digital agreements, along with commitments to ensure that technology is never used to violate human rights.
To protect workers and citizens online, digital agreements must include provisions that address unsolicited messages, consumer fraud and other online harms. U.S. policymakers should strengthen the provisions in the Digital Economy Partnership Agreement and the United States-Mexico-Canada Agreement (USMCA) that address enforceability and the ability to redress damages.
Finally, including language on competition policy in a U.S.-led digital agreement could help dispel the notion that such an agreement benefits only Big Tech, and it could have the added benefit of strengthening regulatory cooperation among parties.
Technology and trade have delivered enormous benefits to global society, but they have not been shared equally. The Biden administration’s focus on workers is an opportunity to develop a worker-centric digital trade framework. This could help create a more equitable future for U.S. workers, a safe environment for workers and businesses, and a global digital governance agenda that promotes shared values of equity and democracy.
Orit Frenkel, PhD, is co-founder and CEO of the American Leadership Initiative. She is a former senior executive at the General Electric Company and served as director for trade in high-technology products at the Office of the U.S. Trade Representative. Follow her on Twitter @OritFrenkel.