Google, Microsoft, IBM urge new internet trade rules

Data is our widget.

Google, Microsoft, Citigroup, IBM, GE and other top-tier companies have urged the United States to fight for trade rules that protect the free flow of information over the Internet.

The unveiling of principles hashed out by the companies over the last nine months comes at a crucial moment, Rick Johnston, senior vice president for international government affairs at Citigroup, told reporters.

While past trade agreements have largely focused on eliminating tariffs on manufactured and agricultural goods, "we're now in an era where the economy is literally driven by the Internet. It's a digital economy," Johnston said.

The group's report says future US trade pacts must "reflect the new realities of the global economy: specifically, the contribution of the Internet toward economic growth, toward job creation and exports," said Bob Boorstin, director of public policy for Google, which has battled Internet restrictions in China and other countries.

One dangerous trend is a requirement by an increasing number of governments for companies to locate data centres within a country's borders in order to provide services, Boorstin said.

Such laws are discriminatory and contrary to the notion of cross-border trade, the coalition said in its paper, which also criticised actions "governments around the world" have taken to block access to information services such as Facebook, Twitter, WordPress and YouTube.

Digital protectionism

Even when Internet curbs are intended to support legitimate public interests such as national security or law enforcement, businesses can suffer when those rules are unclear, arbitrary, unevenly applied or more trade restrictive than they need to be to achieve their objectives, the group's paper said.

In many cases Internet restrictions are simply "digital protectionism" to shield domestic companies from foreign competition, the paper said.

The companies said they hope their ideas will be reflected in the proposed Trans-Pacific Partnership, a free trade agreement that the United States is negotiating with eight countries in the region.

That would put pressure on China to adopt similar policies even though it is not currently a member of the TPP talks, said Bill Reinsch, president of the National Foreign Trade Council, which helped lead the effort to work out the group's ideas.

MasterCard, Visa, Oracle, and GoDaddy.com also attached their name to the paper, along with the US Chamber of Commerce, the Business Software Alliance, the Coalition of Services Industries and other groups.

They said the United States should push for a new international consensus on ensuring cross-border data flows in forums such as the World Trade Organization, the Organization for Economic Cooperation and Development and the Asia-Pacific Economic Cooperation group, which is holding its annual summit this month in Hawaii.

When appropriate, the United States should also bring cases at the WTO to enforce existing trade rules that cover cross-border data flows, the business coalition said.

"We want the free flow of data just like we want the free flow of goods and services," said Nuala O'Connor Kelly, chief privacy leader at General Electric. "In the information age, data is our widget."

(Reporting by Doug Palmer; Editing by Xavier Briand)