As Trade Talks Continue, China Is Unlikely to Yield on Control of Data
That is beginning to change. The United States has enshrined the tech industry’s position in the United States-Mexico-Canada agreement, which provides for open access to government data, protections for company source codes and algorithms and a prohibition on customs duties on data, among other provisions.
The agreement will serve as a jumping-off point for American trade talks with Japan, as well as negotiations on e-commerce rules with more than 70 countries at the W.T.O. Trade agreements between Europe and Japan, and between Japan and a collection of 10 other countries in the Asia-Pacific region, also have as a default the free flow of information, with some exceptions.
In other parts of the world, the tide is moving in the opposite direction, said Aaron Cooper, vice president of global policy at the Software Alliance, a trade group. In countries like India, Indonesia, Russia and Vietnam, governments are introducing regulations to ostensibly protect their citizens’ privacy and build domestic internet industries that will stymie the ability of American companies to provide services in those countries.
China and the United States, home to the world’s largest tech companies, are the global “controllers of data,” said Susan Aaronson, a professor of international affairs at George Washington University. “There are private firms in the United States, and private firms in China that work very closely with the Chinese government.”
It remains to be seen which country takes the lead and how rules around their data evolve. For now, both are throwing up roadblocks to thwart each other. For instance, Chinese rules prevent foreign companies from mapping the country, which could limit the ability of American companies to offer automated driving technology. American lawmakers and policymakers have tried to prevent China from monopolizing data-related infrastructure by barring Huawei and other Chinese telecom equipment firms from building any part of America’s next-generation telecom network.
In the trade talks, China has offered some concessions on rules governing the cloud computing industry, where foreign companies are required to operate in tandem with a Chinese partner. In a meeting in March, China’s premier, Li Keqiang, floated the idea of giving foreign cloud computing companies the ability to operate independently in a free-trade zone, as well as two of the roughly eight licenses that companies need to operate in China, people familiar with the negotiations say. In return, the Trump administration has pressed China to provide all the required licenses, and eliminate all ownership requirements without geographic restrictions.