International Trade

TPP: Balancing Trade and Digital Rights

Americans greeted the Trans-Pacific Partnership (TPP), a trade agreement negotiated by the United States and eleven other nations, with conflicting reactions. Some have already come out against the agreement, others have proclaimed their support, and still others are carefully reviewing its text and weighing its many complexities. The agreement, more than 6,000 pages long, contains numerous provisions that address digital rights, privacy, and the free flow of information, among many other global issues. When considering human rights and the future of Internet governance, is the TPP “good enough?” Does it, despite many red flags, provide the world with net positives that should be weighed equally beside its downfalls? IIEP affiliate Susan Aaronson, in a recent policy brief on the TPP’s Internet provisions and alongside experts in a panel hosted by IIEP, argued that the democratic spillover from trade agreements and the provisions the TPP includes to support information flows could “prove helpful” for the Internet. Others, including some of our panelists from “TPP and the Internet: A Multistakeholder Perspective,” argue that the implications for privacy are too dangerous and the agreement too permanent to support on the grounds of digital rights.

GWU Professor and IIEP affiliate Susan Ariel Aaronson is an expert on human rights and trade issues, including digital trade, and has had her research funded by the Ford and MacArthur foundations and the U.S. government for her research in the area. Aaronson has written extensively on TPP and in particular how it might affect the Internet, urging citizens and policymakers to withhold judgment on the agreement until they review the chapters individually and as a coherent whole. Aaronson is a frequent guest on public radio and often writes on trade, digital trade, and trade and human rights issues.

After reviewing the agreement as a whole, Aaronson penned a policy brief examining how the agreement would impact cross-border information flows, privacy, and more. While there is great potential for the TPP and trade deals generally to improve Internet freedom, she noted the costs that the deal would mean for the Internet, as well as benefits to the fight against censorship. In the policy brief, she argues that “TPP could play an important role in encouraging cross-border information flows and providing tools to challenge censorship and filtering…But TPP critics make some important points that should not be ignored, including its effects on freedom of expression and on cyber-security.”

The Trans-Pacific Partnership has been in the works since 2005 when Brunei, Chile, New Zealand, and Singapore agreed to reduce barriers to trade in the Trans-Pacific Strategic Economic Partnership Agreement (TPSEP/P4). In 2008, Australia, Canada, Japan, Malaysia, Mexico, Peru, the United States, and Vietnam decided to join and expand the agreement. The parties agreed to negotiate an e-agreement that would tackle new sectors such as digital trade, as well as introduce new transparency and regulatory coherence standards to ensure that regulations did not distort trade.

Like other trade agreements, the TPP regulates how and when parties can use protectionism and contains chapters on labor rights, the environment, trade, and goods and services. According to Susan Aaronson, the TPP also contains a lot that is new and innovative in a trade agreement. First, it includes chapters on regulatory coherence and transparency. Secondly, the e-commerce chapter contains several of the first binding provisions on the free flow of information and privacy. Aaronson has argued that in weighing TPP’s impact on the Internet, one must compare the provisions on free flow and digital protectionism and the chapters on regulatory coherence, services, and transparency against the provisions on privacy and online intellectual property rights. She sees great potential, although some experts disagree.

Aaronson also notes that the agreement contains transparency requirements that could bring much needed sunshine, due process, and increased political participation to trade (and Internet related) policy-making in countries such as Vietnam and Malaysia.

However, she also argues that opponents and critics alike have oversold its effects on the Internet. On one hand, the Obama administration has stated that “TPP will help preserve the open Internet and prevent its breakup into multiple, balkanized networks in which data flows are more expensive and more frequently blocked.” Critics, however, still assert that the agreement undermines Internet freedom and access to information. In fact, some activists have even concluded that it “spells doom for free speech online.” Aaronson states that critics, just like supporters, are exaggerating the probable effects of the TPP. While these critics argue about the negative impacts of potentially imposing the United States’ copyright and privacy standards on other countries, others have noted that the agreement does include protections for content dissemination and individuals.

Aaronson asserts that TPP will have positive effects on the Internet if:

  1. the agreement goes into effect and other countries such as South Korea and Indonesia sign on
  2. if policymakers use its provisions to enhance human welfare – to use trade disputes to challenge censorship and filtering; and
  3. if other nations copy and build on TPP’s language in their free trade agreements or at the WTO.

The Trans-Pacific Partnership will definitely have some sort of an impact on Internet governance, says Aaronson, “simply because it covers so many Internet providers and users and because its commitments will affect how governments can behave when regulating cross – border information flows.” The population of TPP countries amounts to almost 1/4 of all Internet users.

“Moreover, if TPP is approved, it could have significant spillover effects on how other governments deal with cross – border information flows. They will have to comply with TPP rules when they exchange information with TPP parties.”

These spillover effects could be immensely important for other nations adopting their own agreements and potentially incorporating the TPP’s provisions that address privacy, information flows, digital rights, and more. Aaronson furthermore asserted that one should not just read the e-commerce chapter to understand TPP’s effect on the Internet – one should also read the financial services, telecommunications, services, transparency and government regulatory chapters, which have additional implications.

On December 2, the Institute for International Economic Policy — in concert with the Software and Information Industry Association (SIIA) and the Internet Policy Forum of the Internet Society, DC Chapter — hosted a breakfast discussion of the cross-border data flow provisions of the Trans-Pacific Partnership at the Elliott School of International Affairs. IIEP welcomed Mark MacCarthy, Vice President of Government Affairs at the Software and Information Industry Association; Peter Maybarduk, Director of Access to Medicine and Information at Public Citizen; Sanford Reback, Director of Global Public Policy at Akamai; Fanny Hidvegi of the Electronic Privacy Information Center; and Susan Aaronson, IIEP affiliate and International Affairs professor at the George Washington University. Tracey D. Samuelson of APR Marketplace moderated the forum.

Panelists signaled that the trade agreement could undermine privacy rights, individuals’ trust in the Internet, freedom of expression, and cybersecurity. Fanny Hidvegi, an International Privacy Fellow at EPIC, noted that the TPP has “many human rights red flags” because it makes trade a fundamental right, leaving privacy standards more or less to states. She proposed that the Trans-Pacific Partnership agreement should recognize privacy and data protection as global fundamental human rights, making them legal obligations for member countries. However, TPP’s primary goals do not place these rights at the forefront, instead addressing them from a business context.

“As we all know, data flows are key for trade…and stakeholders emphasize all the time how and why it is important to businesses. What I’d like to talk about today is what is important for people,” said Hidvegi.

Each panel member was asked by Samuelson to answer whether TPP will be a net positive. The panelists were quite divided.

Peter Maybarduk, a human rights lawyer with expertise in intellectual property working to bolster pharmaceutical competition, argued that the agreement represents industry interests more than anything else. Maybarduk called the Trans-Pacific Partnership “trade über alles” in which trade and economic gains are valued above all other considerations and limitations are built into the agreement as an afterthought. Moreover, he argued that it would be a mistake to consider industry interests to be a proxy for the interests of individuals. Additionally, he noted that the copyright provisions of the TPP are concerning in that they contain no incentives for individual creativity while also keeping information out of the public domain.

Allowing cross-border data flows is critically important, according to Sandy Reback of Akamai. SIIA’s Mark MacCarthy called the TPP’s provisions for data flows a “clear step forward” from previous agreements. Data flows are necessary for actions such as accessing medical records globally and purchasing products from overseas, whereas data localization is inefficient and serves as an overall hindrance to global trade. Therefore, he argued that “businesses and human rights groups should both be delighted with the cross-border provisions in TPP,” due to the protection against content controls and press censorship that the TPP provides – what he considers to embody the ideals of freedom of expression. In fact, countries signing the TPP must now justify any restrictions made to information flows.

Aaronson and Reback agree that the means of negotiating TPP were not appropriate for the Internet age, as many critics of the TPP have focused on the lack of transparency during the negotiations. While “transparency is incredibly important”, Reback argued, “sovereign nations do not negotiate trade agreements in the public square.” Aaronson agreed, noting that while “trade agreements can’t be made in the sunshine,” we can rethink how we make trade policy and who we involve. Aaronson suggests that the USTR could experiment with crowd-sourcing, asking the public to weigh in with creative ideas on negotiating topics where countries find significant divisions. Overall, the panelists agreed that the USTR needs to find new ways to involve the public, build public understanding of what’s in the negotiating texts, and to be more transparent.

Aaronson believes TPP is ultimately a step forward. At the event, she pointed out that the positives of TPP are often ignored. Aaronson believes that TPP could help provide a free flow of information, which allows countries to progress and helps citizens, and these positives of TPP are often ignored. Moreover, she asserts that empirical research shows how trade agreements improve the rule of law, provide traders and citizens with more access to information, and can expose more repressive states to new ideas.

As evidenced by our panel, TPP will continue to spark controversy as it awaits a Congressional vote. While the potential for positive and negative consequences of the TPP are hotly debated, the extent of their impact will be difficult to fully predict unless the agreement goes into effect. Nonetheless, it is important that issues with the TPP are worked out and discussed prior to its passage, as the agreement would put into place a binding set of rules between nations that are difficult to adjust retrospectively. The scope of these potential positives and negatives only highlights the importance of continued discourse like the talk hosted by the Institute provided. Thank you to moderator Tracey D. Samuelson and our panelists for a thought-provoking and interesting discussion!

A live-stream of the panel is available here


The Institute for International Economic Policy (IIEP), which is located within the Elliott School of International Affairs, serves as a catalyst for high quality, multi-disciplinary, and non-partisan research on policy issues surrounding economic globalization. The Institute research program helps develop effective policy options and academic analysis in a time of growing controversies about international economic integration in many countries around the world. The institute's work also encompasses policy responses for those who face continued poverty and financial crises despite worldwide economic growth. Affiliated faculty have appointments in the departments of economics, history, and political science as well as the law and business schools.

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