International Trade in the Digital Economy

By Greg Slater, director of trade and competition policy at Intel Corporation

I had the opportunity today to testify before the Senate trade subcommittee on international trade issues involving the digital economy. My testimony noted Intel’s goal of creating a computing continuum where an individual’s applications and data will move with that person as he or she engages in different activities throughout the day, and stated that this continuum will tremendously increase trade in the digital economy. For instance, Intel and 70 other companies recently have invested $50 billion in the creation of an initiative to drive interoperability for cloud computing. Intel also this year launched a software application store – the Intel AppUp center – for netbook computers.

I highlighted three general international trade issues of particular concern for the digital ecosystem. First, trade agreements need to be modernized to ensure their commitments effectively address actual or potential barriers unique to the digital world. Even so, the most advanced agreements cannot keep pace with the rapid innovation in the digital world and emerging barriers to trade in new digital goods and services. Second, to help fill in the “regulatory gaps” not suited for binding international agreements, industry must develop appropriate private agreements, best practices, and voluntary standards. International voluntary standards and best practices are more flexible than technical regulations, ensure interoperability, and are easier to update to accommodate evolving technologies and address any legitimate privacy, security, IP and other concerns that arise with new electronic products and services. Third, governments should work to reduce or eliminate tariffs on digital goods. In sum, we need both proactive standards and practices (typically the “do’s”) and updated, binding international rules (generally the “do not’s”) to further reap the benefits of a digital economy.

Intel thanks Senator Wyden for holding this hearing and proactively addressing the role of international trade in the digital economy, as free trade is critical to preserving American innovation and jobs.

Read my testimony here: Intel Corp. Senate Trade Subcmte testimony Nov 18 2010.pdf.