March 23, 2023

At Hearing, Senator Warren Questions U.S. Trade Representative on Digital Policy Concerns and Lack of Transparency

Warren: “When deals like the IPEF are negotiated in secret, it means that members of Congress who are trying to pass laws to rein in Big Tech can’t tell what you are or aren’t giving away.”

Video of Exchange

Washington, D.C. — At a hearing of the Senate Finance Committee, U.S. Senator Elizabeth Warren (D-Mass.) questioned U.S. Trade Representative (USTR) Katherine Tai on the agency’s approach to digital trade policy in enforcement of existing rules and negotiation of the Indo-Pacific Economic Framework (IPEF). Warren, expressed concerns about potential giveaways to Big Tech in IPEF and the lack of public consultation and transparency. She urged Ambassador Tai to stand up to lobbyists aiming to use digital trade rules to protect the Big Tech companies from regulation, and urged USTR to publish the draft IPEF text so the American public can see what is in it. 

Transcript: Hearing, “Hearings on The President’s 2023 Trade Policy Agenda.”
U.S. Senate Committee on Finance
Thursday, March 23, 2023

Senator Elizabeth Warren: Thank you, Mr. Chairman. Giant corporations lobby to rig the laws in their favor, but if it looks like someone in government might actually rein them in, they have a second bite at the apple: they try to rig the trade deal to lock in more favorable regulations. 

In other words, if a government tries to break up your monopoly or crack down on your price fixing, just call it illegal trade discrimination and keep right on going with those business practices.

This is not a theoretical concern.  Ambassador Tai, I was concerned to see reporting just yesterday that you have used meetings with your Canadian counterpart to criticize Canada’s effort to make Big Tech pay for the news content that Big Tech uses to make huge profits.  That proposed Canadian law, by the way, looks a lot like pending U.S. legislation that right now has bipartisan support.

Ambassador Tai, if that report is true, it would be wildly out of step with President Biden’s whole-of-government order to prioritize policies that promote competition in the economy. Do you agree that we should support our allies when they step up to regulate Big Tech, including supporting them in the way that we write and enforce digital trade deals?

Katherine C. Tai, United States Trade Representative: Senator Warren, short answer is yes. I do agree with your statement. Second piece, if I may interject, and on the basis of that reporting, which was brought to my attention yesterday, I think it is probably based on a readout of a meeting that I had with my Canadian counterpart. And I have, in fact, raised these Canadian bills that are in question with my Canadian counterpart to ask more and to learn more about them. What I like to do is to understand, especially in this realm, where digital and trade intersect to understand what the motivations are of our trading partners.

Senator Warren: Okay, and just so I'm clear on this, you were not patting the Canadians on the back for reining in Big Tech I take it? Which is what we'd like to see happen. You were not telling them to back off regulation, however, is that right? I just want to be clear on this.

Ambassador Tai: The basis of the readout – and this is me going a step further from the readout – I raised the question to say I would like to learn more about this.

Senator Warren: Okay and this is critically important because as U.S. Trade Representative, you don’t just enforce existing trade rules. You are also currently leading negotiations on digital rules in the Indo-Pacific Economic Framework – new rules that Big Tech lobbyists also want to rig in their favor to undermine President Biden’s competition agenda, and to undermine the work of Congress and regulators like the FTC and the DOJ.

Ambassador Tai, can you assure me that the IPEF digital trade text you are currently negotiating will not impede in any way those efforts to stop Big Tech’s anticompetitive practices, like gobbling up competitors or abusing monopoly power to jack up prices?

Ambassador Tai: It is absolutely correct that it is not our intention to use these negotiations to impede –

Senator Warren: Good.

Ambassador Tai: – and I'd also like to repeat for you comments that I've made earlier in the hearing that it is our vision in terms of what we are negotiating in the Indo Pacific Economic Framework, including in the digital area, that we are bringing with us a pro-competition outlook that is meant to enable as many participants in the economies as possible. 

Senator Warren: I am very glad to hear that, but I want to explain that I have concerns because the text is classified, and that means even though I may see it and my staff may see it – we are among a few members of Congress who have access, I can't even talk with you right now about it in this hearing – any of the specific issues in the text.

This means that the American public can’t know what’s in the text, but just last week U.S. negotiators were in Bali discussing this text with representatives from foreign countries. Who else got access to the text?  So-called non-government advisors – which includes Amazon and Google lobbyists.

Ambassador Tai, that’s just not right.  This text should be public, and the next tranche of digital text that you’re planning to discuss with partners next month should also be public.

Ambassador Tai, will you commit that, going forward, you will at the very least publish detailed summaries of digital negotiating text for public feedback and do so before sharing further text or having further discussions with our partner countries?

Ambassador Tai: Senator Warren, in engagements with you and other members of this committee, I have heard a very clear desire for more transparency. I made a commitment that we would publish public summaries of the proposals that we've made and Tuesday, we published a summary of the texts that we have tabled, I believe, going into the first round of negotiations. 

Let me just share with you, we are moving at a slower pace than I would like and part of it is because we are doing something new. So I do commit to you that we will keep working on improving our practices and your feedback, and the feedback from this committee on how we can do this better, is valuable and will inform our work.

Senator Warren: Well, I appreciate that. I know I'm over time. I just want to say that when deals like the IPEF are negotiated in secret, then it means that members of Congress who are trying to pass laws to rein in Big Tech can’t tell what you are or aren’t giving away. It means regulators like the FTC and DOJ can’t do it, so I very much hope you’ll be transparent.