On September 20, 2024, Robert D. Atkinson, President of the Information Technology and Innovation Foundation (ITIF), testified before the U.S. House Ways and Means Trade Subcommittee, emphasizing the urgent need for robust digital trade rules to protect American innovation. Atkinson highlighted that the U.S. leads the global IT market with a 37% share as of 2020 and noted that the digital economy was valued at $2.6 trillion in 2022, growing at an annual rate of 7.1%. He projected that digital trade is expected to double from $16.6 trillion to $32.9 trillion by 2028, underscoring the importance of maintaining a competitive edge in this rapidly expanding sector. [b063c6b5]
Atkinson pointed out that by 2021, 62 countries had imposed 144 data localization measures, which pose significant barriers to U.S. companies. He cited specific examples of international actions that have negatively impacted U.S. firms, including the European Union's Digital Markets Act targeting American companies, and the implementation of digital services taxes in Canada and Australia. Furthermore, he noted that U.S. firms faced substantial fines under the General Data Protection Regulation (GDPR), amounting to $3.1 billion from 2020 to 2023, and highlighted the EU's previous fines against Google totaling $7.3 billion. [b063c6b5]
In his testimony, Atkinson stressed that digital mercantilism not only undermines U.S. economic interests but also threatens the innovation ecosystem that has propelled the U.S. to the forefront of the global digital economy. He called for Congress to establish and enforce strong digital trade rules that would protect American innovation and ensure fair competition in the international marketplace. [b063c6b5]
Additionally, Atkinson's earlier analysis indicated that the U.S. Development Finance Corporation (DFC) disproportionately funds countries with substandard intellectual property policies, which could further harm American commercial interests. He urged Congress to create stronger criteria for assessing how a recipient country's trade policies impact U.S. techno-economic interests, suggesting that the DFC should cease financing nations that implement unfair trade and IP policies. [fa54cb71]
