BSA | The Software Alliance releases digital trade agenda for new negotiations

WASHINGTON – May 22, 2017 – In the 25 years since the conclusion of the North American Free Trade Agreement (NAFTA), the American software industry has transformed. It has evolved from floppy disks and desktop computing to cloud computing, smart devices, and data analytics. Innovation moves quickly, and those changes continue at a rapid rate – artificial intelligence, blockchain, and “smart” contracts are each reshaping how software is developed and used.

Software’s exponential growth has become a boon for American economic and job growth. Software contributes over $1 trillion to the US GDP, supports almost 10 million jobs, and adds $52 billion in R&D investments.

Current trade agreements, however, do not address this major driver of the digital economy. BSA | The Software Alliance has developed a digital trade agenda outlining provisions that every modern trade agreement should include. The agenda is designed to ensure that companies do not face market access barriers or discrimination against innovative software services.

A well-constructed, sound, and modernized trade agreement must address 21st century obligations that will drive US job creation, competitiveness, and innovation, consistent with the objectives established by Congress in Trade Promotion Authority laws, and the precedents set by existing agreements.

“NAFTA is the place to start,” said Victoria Espinel, President & CEO of BSA | The Software Alliance. “These improvements are critical for the modern economy. NAFTA is an opportunity to create a trade agenda for the future.”

Key elements of a modern trade agreement for the 21st century economy include:

DATA ECONOMY

Privacy and security are imperatives, but governments invoke privacy or security as a rationalization for creating market access barriers that harm US companies.

• Free Movement of Data Across Borders: Given the importance of cross-border data to the modern economy, governments must use privacy or security policies only as necessary, and never as disguised market access barriers. 
• No Data Localization: Governments should not use data localization requirements as a market access barrier. For example, governments should not require that a data center be built inside its borders as a condition for doing business in a country.
• Electronic Signatures: National laws should recognize electronic signatures in commercial transactions, including “smart” contracts.

TECHNOLOGY IN GOVERNMENT

• Technology in Government: Governments should promote the use of innovative technology in government operations as they provide services to their citizens.
• Procurement: Procurement rules should be changed to reflect the 21st century needs of governments.
• Choice: Companies and government agencies should be free to use the technology of their choice and not be required to use local technology.

REGULATION

• Strong Support for Encryption: Governments should not undermine encryption in commercial products by imposing restrictions on security technologies used to safeguard against intrusions.
• International Standards: Governments should not force companies to use conflicting national standards.
• State-Owned Enterprises: Governments should not favor state-owned enterprises through discriminatory regulation or subsidies.
• No Forced Technology Transfer: Governments should not force companies to transfer their technology, or to disclose trade secrets or source code in other to have market access.
• No Customs Duties on Electronic Transmissions: Governments should not impose customs duties on the telecommunications value of electronic transmissions or on data being transmitted.

INTELLECTUAL PROPERTY

• Copyright Rules: Governments should have copyright rules in line with international standards with appropriate exceptions and safeguards, clear rules permitting commercial data gathering, and rules ensuring that ISPs are protected from liability for unlawful content posted by third parties.

• Legal Software: Governments should use legal software in government agencies.
• Cyber Theft Penalties: Governments should have criminal penalties for cyber theft of trade secrets.
• Patent Protections: Governments should have nondiscriminatory protection for software patents.

BSA’s digital trade agenda is intended to create a modern trade agreement that recognizes the enormous impact software has on the US economy. BSA sent a letter to the Administration outlining these trade priorities and emphasizing digital trade’s role as an engine of growth for the American economy in the coming decades. To view the full agenda, click here.