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Representatives from member countries of the Trans-Pacific Partnership met to discuss a possible new regional trade deal, Vina del Mar, Chile, March 15, 2017 (AP photo by Esteban Felix).

Trump’s Bilateral Trade Focus Won’t Work for the Internet

, Monday, March 20, 2017

While much about U.S. President Donald Trump’s trade policy remains uncertain, his official 2017 “trade policy agenda,” released on March 1, clearly stated the preference for bilateral over multilateral negotiations. Echoing what he said during the election campaign, the trade agenda also emphasized national sovereignty and the enforcement of U.S. trade laws. Trump’s focus on bilateralism, however, comes with real costs. Bilateral negotiations are time-consuming and entail significant negotiating resources. Even when “successful” in narrow market access terms, firms can incur significant transaction costs from having to navigate the resulting tangle of inconsistent or conflicting rules.

Multilateral trade rules—such as those embodied in the World Trade Organization or in broad regional agreements like the Trans-Pacific Partnership, or TPP, that Trump quickly pulled the U.S. out of—bring more predictability and continuity to trade relations. With respect to one of America’s most important exports, digital trade, bilateral trade talks simply would not be useful because of the crisscrossing nature of global information flows. The platform for facilitating those information flows—the internet—is designed to be universal, open and global. That is why the system of rules governing trade in information flows needs to be global, as well. ...

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