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Remarks at U.S. Chamber of Commerce on Global Flow of Information on the Internet

Thursday, June 16, 2011

Commerce Secretary Gary Locke
Remarks at U.S. Chamber of Commerce on Global Flow of Information on the Internet

I’m sorry I wasn’t able to be here for your discussion earlier, but I look forward to hearing what you came up with.

As you know, I’ve been nominated by President Obama to be the next ambassador to China.

But even from across the globe, I want to remain up-to-speed on your thoughts on how to maintain a free flow of online commerce worldwide. And I want to do what I can, wherever my office may be, to ensure electronic information moves as freely as possible from country to country.

Today, I’d like to discuss how the Department of Commerce is tackling the issues American businesses are having with online information flow and how we can work together to continue the progress we’ve already made.

There may be some other people here, who, like me, can remember when Time’s “Man of the Year” was a personal computer. And, according to reports, most of that story was composed on a typewriter.

That was in 1982, well before terms like “cyberspace” and “virtual reality” and “social networking” would enter the popular lexicon. 

There were precious few cell phones and certainly nothing called a blog. The Internet was the private preserve of the Defense Department, federal researchers and certain universities.

Fifteen years ago, we saw the dawn of the commercial Internet. 

Flash forward to 2011. 

Nowadays, the world does an estimated $10 trillion of business online. Nearly every transaction you can think of is being done over the Internet:

  • Consumers pay their utility bills from their smart phones;
  • People download movies, music and books online; and
  • Companies, from the smallest local store to the largest multinational corporation, order goods, pay vendors and sell to customers via the Internet.

This is the future of the global economy. And it’s a sector where the United States has demonstrated tremendous innovative capacity.

The U.S. is the birthplace of the Internet, of e-commerce, of online communications – and of much of the hardware, software, content and business models that bring vitality to the digital world.

The sheer volume of economic activity today directly translates into yet more opportunities for entrepreneurs as well as keeping our larger companies competitive in the aggressive global economy.

Across the Obama administration, we work every day to revitalize the economy and spur job creation. And we know that overseas barriers to online transactions can frustrate and impede our innovators here at home.

When this happens, our competitiveness is diminished and potential job growth can fail to materialize. I know earlier this morning, you heard a host of examples of these restrictions.

This is an issue that the administration has been taking head-on.

While many of our international partners understand that the free flow of information is integral to economic growth, others do not.

In these cases, artificial restrictions are simply methods of promoting or protecting local businesses. What I find most troubling is that the laws and policies that restrict online information flows are often vaguely articulated, inconsistently enforced and created without transparent or open processes.

With all this in mind, the Department of Commerce has made it a top priority to ensure that the Internet remains open for innovation.

Over a year ago, I launched a department-wide Internet Policy Task Force. The taskforce’s job is to help revamp U.S. policy on issues key to the Internet’s vitality, including:

  • Safeguarding consumer privacy;
  • Improving cybersecurity; and
  • Better protecting intellectual property online.

And our taskforce is also looking at today’s topic – the international challenges to the free flow of commercial information online and the impact those hurdles have on American businesses and job creation. 

Importantly, this administration is keenly aware that protecting key concepts like privacy and intellectual property do not need to conflict with our goal of ensuring free flow of commercial information.

As President Obama stated in the White House’s recently released International Strategy for Cyberspace:

“States do not, and should not have to choose between the free flow of infor­mation and the security of their networks. . . . The same is true commercially; cyberspace must remain a level playing field that rewards innovation, entrepreneurship, and industriousness, not a venue where states arbi­trarily disrupt the free flow of information to create unfair advantage.”

With this in mind, this summer, the Commerce Department will publish a report outlining policy directions we believe the U.S. government should take to make things easier for you and your fellow business-owners.

My aim is for the report to be precise as to what type of foreign restrictions on information currently face U.S. companies. We want to understand the rationales that foreign policymakers offer for why these restrictions have been instituted.

We want to articulate what impact they have had on innovation, economic development, and global trade and investment and what potential solutions exist. That’s why we sought public comment from industry and other stakeholders.

Our report is still in progress, but I’d like to share with you the key themes we have identified so far:

  • Restrictive rules on the flow of information can drastically hurt business revenues, for companies of all sizes.
  • Perhaps not surprisingly, companies are less likely to invest in markets where government restrictions are imposed on the free flow of information.
  • Limitations of e-commerce that result from technical blocking have the same impact as shuttering a brick-and-mortar business or blocking a physical trade port.
  • Requiring companies to re-engineer technologies and equipment to comply with government-imposed restrictions can significantly increase the cost of doing business.
  • Restricting Internet services harms the productivity of downstream business users.
  • New applications will not be deployed as readily in restrictive markets, so countries and markets that restrict data flows may lose in terms of competitiveness.

With these themes in mind, we’re circling a few possible policy fixes including the option of treating these restrictions as non-tariff trade barriers and thus adapting existing trade tools accordingly. 

The Department’s International Trade Administration is studying how to address restrictions on commercial data flows in its ongoing market-access and treaty-compliance efforts. And we are examining how to best incorporate into our many trade discussions the higher-level need for transparency and due process in the adoption and enforcement of restrictions on Internet commerce. 

Before I wrap up, I’d like to note that our experts at the Commerce Department have so far heard from dozens of companies and other stakeholders, but are still working on their analysis. Our experts will, of course, be able to factor in this morning’s discussions.

But there are still additional avenues to inform us of when you hit stumbling blocks. I invite you to contact our International Trade Administration and tell us when your companies encounter restrictions on the free flow of information.

ITA’s Trade Compliance Center and country experts are ready to work with U.S. businesses – large or small – to resolve market access barriers.

For example, the government has been helpful to many companies that have found their websites blocked or encumbered, preventing them from selling their goods and services into another market.

We are just now beginning to understand the true nature of these problems and are actively looking for additional ways to help U.S. companies address them.

In many respects, our work naturally complements the important initiatives at the State Department. We all know that Secretary Clinton and her team are going to continue to focus on the human rights and freedom-of-expression opportunities and challenges online. 

The Web has been awe-inspiring in enabling people around the world to speak and gather in situations where freedoms of expression and association have been constrained by government.

As a communications device that gives voice to the un-heard, the Internet has truly been transformative.

It will always be the Commerce Department’s job to promote economic freedom online within the international agenda as well. I look forward to working with Secretary Clinton and my other diplomatic colleagues to promote both the free flow of goods and services online and the broader set of Internet freedom issues.

Although the Commerce Department can help set the stage for innovation with sensible rules, guidelines and incentives, we know the actual innovating and creating is going to happen in the private sector.

That's a message President Obama has delivered throughout his term in office. It’s a message I've been trying to send everywhere I go in this country.

Too often, when this topic is raised by government officials, it is perceived as adversarial; the government versus business – the government looking to force the private sector to do something. 

That's not what we are trying to do here.  Today, we want to discuss the best ideas on how we can help make the Internet more open and more powerful in its role as one of the greatest engines for economic growth in America.

We’ve made great progress together. I look forward to working with you to continue our success.

Thank you.