Free & Fair Trade

Ensure Global Trade is Free and Fair

At a Glance:

  • As much as two-thirds of the business of US technology companies arises outside the United States, and foreign opportunities for US information technology (IT) products are likely to grow over time.
  • After years of progress in removing barriers to legitimate trade in software and IT products, forward momentum has stalled in recent years.
  • The software industry’s ability to contribute to long-term economic and social progress depends on further progress toward free and fair trade.


BSA Position

The software industry supports government efforts to liberalize global markets and make sure that international commerce is conducted under commonly agreed, fair, enforceable rules. Significant progress has been made over the last few decades to remove barriers to legitimate trade in software and other IT products, and to crack down on illegitimate trade in pirated goods. The software industry’s ability to contribute to long-term economic and social progress depends on further progress toward free and fair trade.

Issue

As much as two-thirds of the business of US technology companies arises outside the United States, and the health of the broader US and global economy also depends on expanding international trade. Open foreign markets governed by enforceable, nondiscriminatory trading rules are essential to the current and future success of the software and IT industries — and their customers.

Background

For almost 50 years, from the end of World War II through the 1990s, governments around the world worked together to lower trade barriers, fueling rapid economic growth and rising incomes. However, efforts to expand trade have flagged in recent years. The US Congress allowed the President’s authority to negotiate trade deals and submit them for an up-or-down vote to lapse in 2007. Bilateral trade agreements signed with South Korea and other nations have been languishing in Congress. Progress on future trade deals has come to a virtual standstill.

Like their colleagues in many other industries, US high-tech companies derive substantial revenues from sales outside US borders. Because growth rates in IT spending are much higher abroad than in the United States, the reliance on overseas business will increase over time.

US software companies are leaders in the global marketplace. An estimated 65% of the PC software units in service worldwide in 2008 were from US-based companies. Because of the US software industry’s focus on foreign trade, the industry has been a significant contributor to the positive side of the US trade balance. In 2008, US software sales in overseas markets effectively reduced the US trade deficit by $36.4 billion, up 8.6% from the previous year.

Actions Needed

The US Congress and President should:

  • Enhance the President’s ability to negotiate strong trade deals by renewing his authority to submit trade agreements to Congress for an up-or-down vote.
  • Approve pending free trade agreements with South Korea, Panama, and Colombia.
  • Encourage other governments to establish transparent, technology-neutral and competitive government acquisition policies that do not discriminate against American goods and services.
  • Clarify and modernize export control laws to ensure they do not create impediments to trade.
  • Strengthen efforts through trade policy to ensure vigorous enforcement of intellectual property laws and specifically seek to stamp out software piracy overseas.
  • Complete a robust Anti-Counterfeiting Trade Agreement (ACTA) that is fully consistent with US laws.
  • Use the full range of available tools, including the Special 301 process, trade preference programs like the Generalized System of Preferences (GSP), and dispute settlement to ensure that trading partners meet their obligations under trade agreements.

For More Information