FIRST IN MT: TECH LOBBY LEANS IN ON TRADE DISPUTES — Lobbyists for the largest U.S. tech companies are increasingly pressing the U.S. Trade Representative over foreign tech laws they say “discriminate” against their members — an effort the American Economic Liberties Project calls an attempt to “hijack” trade agreements so they forbid new tech rules at home and abroad.

Lori Wallach, director of the left-leaning group’s Rethink Trade program, called it a “backdoor way to try and put handcuffs” on regulators seeking to rein in the tech industry. In a new report out this morning, AELP found tech lobbyists have asked USTR to label foreign tech rules as unfair trade barriers 30 times in the last two years.

The push comes as the Biden administration crafts new trade agreements with Asia and Europe. If the tech lobby’s arguments make it into those agreements, Wallach warned it could short-circuit plans for new laws targeting the largest tech firms.

“They’re quickly mixing up huge vats of trade-agreement cement and pouring it around the ankles of numerous governments and parliaments, and hoping to God it sets before they act to regulate them,” said Wallace. “Because they want them locked in place.”

— The (trade) ties that bind: Every year USTR asks companies and their lobbyists to submit comments for its annual National Trade Estimate report, which determines which countries are imposing unfair trade barriers on U.S. firms. AELP found that the tech lobby complained aggressively in both 2020 and 2021, targeting the EU’s Digital Markets and Digital Services Acts 11 times, Australia’s News Media Bargaining Code 10 times, South Korea’s new law on app store payments five times and a new German anti-monopoly law four times.

If a country wants to trade with the United States, they’re generally prohibited from treating goods or services from U.S. companies differently than those from domestic firms. AELP says tech lobbyists are leveraging that prohibition to argue that laws like the EU’s Digital Markets Act — a new antitrust rule that imposes identical requirements on companies of a certain size regardless of origin — discriminate against U.S. tech firms (which are generally much larger than their European counterparts). If USTR agrees with that diagnosis and decides to do something about it through future trade deals, it could tie regulators’ hands.

“This is about big tech interests trying to achieve — through closed door negotiations and obscure, complicated trade language — the special protections and monopoly power lock-ins that they feel they’re going to lose in public debate,” Wallach said. She noted many of the foreign laws targeted by the tech lobby have U.S. analogs, including the Open App Markets Act, S. 2710, and the Journalism Competition and Preservation Act, S. 673.

— It’s just business: AELP found three lobbying firms were responsible for most of the complaints to USTR. The Computer Communications and Industry Association called foreign tech rules unfair seven times, as did the now-defunct Internet Association. The Information Technology Industry Council, another tech lobbying group, levied six discrimination claims against foreign countries.

In a statement, CCIA president Matt Schruers said “the fact that AELP’s funders happen to like these protectionist barriers doesn’t mean they don’t conflict with trade commitments to the United States.” He urged the Biden administration to “work with trading partners to address trade tensions and expand access to new markets.”

ITI spokesperson Jennie Westbrook Courts said the group asks governments around the world “to consider their policies holistically.” She called fair treatment under international trade commitments “a key part of that consideration.”

— Crunch time: Democratic lawmakers recently warned the Biden administration not to listen to the tech lobby as it negotiates the Indo-Pacific Economic Framework, a new trade deal set to include India, Japan, South Korea and Australia. The text of that deal could come as soon as January — and in new comments submitted just last Friday by CCIA and ITI, both groups again sought to convince USTR that Australia and South Korea’s tech rules should be prohibited under a new deal.

“They’re going even farther now,” Wallach said of the tech lobby. “They’ve doubled down.”

— A time for choosing: While elements of the Biden administration have come out swinging against the market power of the largest tech platforms, Wallach said the Commerce Department — which plays a huge role in negotiating trade deals — “has not been shy about publicly attacking other countries’ digital governance rules, using the exact corporate discrimination language to attack facially neutral policies.” She worried other trade discussions, including ongoing negotiations at the U.S. / EU Trade and Technology Council, will be impacted as well.

“You could end up with U.S. trade agreements undermining vital anti-monopoly and digital governance initiatives all over the world,” Wallach said.

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