New Wave of IT-Focused Trade Barriers Locks Multinational Firms Out of Key Emerging Markets
At a time when the global economy can ill-afford barriers to growth, a study from the Business Software Alliance finds that a new wave of IT-focused market-access restrictions is spreading through key emerging markets.
The report shows there is an unsettling domino effect at work: As top emerging economies like China and India place limits on foreign technology providers, other emerging markets are emboldened to impose protectionist measures of their own. Taken together, these barriers are hindering the IT industry's ability to grow and contribute to the US and global economies.
These IT-focused market obstacles can be hard to recognize. They often are disguised as policies to promote innovation, enhance security, or advance other domestic priorities. BSA's report catalogues five types, providing specific case studies for each one. They include:
Stacking procurement by government or state-influenced enterprises in favor of domestic products or IP, or biasing particular technologies or business models.
Manipulating technology standards to bolster domestic firms and insulate them from foreign competition.
Invoking security concerns to block or tie up foreign IT products in red tape while giving advantage to local alternatives.
Inhibiting multinational cloud service providers with data-location requirements or restrictions on cross-border transactions.
In addition to pernicious new forms of protectionism, there are tariff barriers that persist because the WTO's Information Technology Agreement does not cover many new technologies or key markets.
To ensure IT companies can compete fairly in emerging markets, BSA urges the United States and other leading IT economies to pursue an eight-point action plan for the digital economy through bilateral, multilateral, and regional trade forums. BSA's proposed agenda includes championing transparent, non-discriminatory procurement policies; promoting market-led technology standards; establishing clear rules allowing data to flow across borders; modernizing and expanding the World Trade Organization's Information Technology Agreement; and intensifying engagement with emerging markets to promote best practices for spurring innovation.
Download the full report for more details: www.bsa.org/tradelockout (PDF).
Read more about the report in AFP, The Hill, and Politico Pro.