US Digital U-Turn Undermines Free, Open Internet 

For the past three decades, the US has promoted the free flow of information online and limiting individual countries’ ability to force data to be stored within their borders. No longer.

The free and open Internet is under siege. Countries around the globe led by China and Russia are pushing to erect barriers, imposing censorship regimes and firewalls, and blocking US business from doing business on their territories. Even our European allies are threatening, in the name of privacy and digital sovereignty, to restrict data flows.  

But now, the US is making a dangerous U-Turn. US Trade Representative Katherine Tai has dropped longstanding American digital trade demands for free flows of data in World Trade Organization talks. Although opposition to her decision is mounting, the Biden Administration has failed to reverse course. 

For me, this retreat is personal. Over the past 25 years, I have fought to keep the Internet as a unified global interconnected network. Inside the Department of Commerce, both Republican and Democratic administrations agreed on blocking authoritarian attempts to turn it into a Splinternet. Chinese-style Great Firewalls are bad for US business and bad for global freedom.  

To be sure, the Biden Administration is not endorsing Chinese-style censorship. It wants to crack down on tech harms, arguing that it needs “policy space” for new laws on privacy and other issues before negotiating on digital trade. It worries that free data flows benefit only Big Tech.  

Both assumptions are incorrect. The US can fight for free digital trade – and go ahead with enacting privacy and other tech regulation. My former colleague Jonathan McHale, who led US digital trade efforts for 25 years across four Administrations points out “that our trade partners have successfully managed to both legislate domestically and negotiate trade rules at the same time.”  

Data localization hurts small businesses as much or more than big businesses. As the US Chamber of Commerce notes, “Unlike larger companies, smaller businesses with fewer products, service lines, and resources usually cannot carry the increased costs of data localization, forced technology transfers, and arbitrary application of regulations.” 

The US U-turn carries additional risks. The WTO negotiations also were designed to prevent the forced disclosure of source code that could have undermined intellectual property rights. Forced disclosure may “allow adversaries to identify and exploit security and privacy vulnerabilities,” according to a letter to Ambassador Tai and Secretary of State Anthony Blinken signed by a coalition of civil rights, civil liberties, open Internet advocates, and digital trade experts. 

I signed the letter. In it, we detail concrete dangers. Data localization mandates would throttle global services such as Wikipedia. Over the past decade, the Wikimedia Foundation has received an increasing number of requests to provide user data to governments and wealthy individuals, who wish to censor accurate public information or to identify and take retaliatory action against the volunteers editing Wikipedia.  

Data localization could amplify a global crackdown on free expression. Rwanda’s data protection law leaves personal data easily accessible to prosecute dissidents. in Uzbekistan, authorities temporarily blocked Skype, TikTok, Twitter, VKontakte, WeChat, and other popular platforms due to their non-compliance with a data localization law, Overall, more than three-quarters of the world’s Internet users live in countries where expressing political, social, and religious viewpoints lead to legal repercussions. 

Opposition is mounting to the Biden policy. The US House of Representatives and the US Senate held public hearings at which both Democrats and Republicans expressed concerns. Republicans on the House Oversight Committee have launched an investigation. 

The Administration seems unsure how to respond. In a speech on May 6 in San Francisco at Silicon Valley’s annual convention on both the technology and the politics of securing cyberspace,  Secretary of State Blinken spoke out in favor of open, interoperable Internet, and cross-border data flows.   

But US trade officials continue to move in the opposite direction. At the recent EU-US Trade & Technology Council meeting in Belgium, the US declined to sign bilateral commitment to data-free flows. In the annual National Trade Estimate, published in March, the US Trade Representative Katherine Tai gave a pass for the first time to multiple data localization measures, reducing by over 70% its coverage compared to 2022.  

It’s not too late to undo the damage. At the most recent WTO meeting in Geneva, dozens of countries agreed to extend a moratorium for two years on imposing tariffs on digital trade. Hopefully, this will provide the US with enough time to right its wrong turn on data localization and other digital trade issues. 

Fiona M. Alexander is a Senior Fellow for the Digital Innovation Initiative at CEPA. She is both a Distinguished Policy Strategist in Residence at the School of International Service and a Distinguished Fellow at the Internet Governance Lab at the American University in Washington. She is a former Department of Commerce official, specializing in technology policy. 

Eduardo Castellet Nogués, Program Assistant for CEPA’s Digital Innovation Initiative, contributed research. 

Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions are those of the author and do not necessarily represent the position or views of the institutions they represent or the Center for European Policy Analysis.