Communications Daily is a Warren News publication.
'Localization Mandates' Opposed

Promote Free Data Flows, IBM Urges of US-Japan Trade Deal; MPAA, RIAA Seek IP Protections

Digital trade is a “significant competitive advantage for the U.S. economy,” and the Trump administration should view any U.S.-Japan free-trade agreement as an “important opportunity to expand commitments to the free flow of data,” commented IBM in docket USTR-2018-0034. The Office of the U.S. Trade Representative sought feedback to help shape the administration’s negotiating posture in future trade talks with Japan (see 1811260011).

Sign up for a free preview to unlock the rest of this article

Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!

Permitting “free flows of data” across borders, preventing data “localization mandates” and protecting algorithms and source code should be “broad digital trade principles” in a U.S.-Japan free trade agreement, said IBM. It worries some countries “in the interest of data security, are pursuing trade policy that forces data to be stored locally,” it said. “Hackers don’t care where data is stored,” said IBM. “These policies won’t solve the security issue.”

Cisco thinks it’s important for the U.S. and Japan to “reaffirm and expand upon their existing duty-free treatment” of information and communications technology (ICT) goods “in any bilateral trade agreement reached between them,” said the company. Though Japan has low tariffs on ICT goods, “it features some significant formal and informal non-tariff barriers,” including “burdensome conformity assessment procedures,” said Cisco. The free-trade agreement the U.S. recently negotiated with Canada and Mexico “contains strong provisions on mutual recognition of technical regulations, standards, and conformity assessments,” and Cisco believes it’s important to “include similar provisions” in any U.S.-Japan trade agreement.

Content groups pressed USTR to pursue agreements with Japan that bolster IP protections. Online piracy “continues to be a widespread problem in Japan,” despite Japanese government efforts to thwart it, said MPAA. “MPAA and its member companies place the highest priority in securing both the legal and practical tools necessary to protect intellectual property rights in the digital age. While Japan does have a relatively strong copyright law and enforcement regime, there are discrete areas that must be improved.”

Copyright protection and strong IP enforcement are “critical” to a U.S.-Japan trade deal, commented RIAA. Strong copyright protection “in isolation” is of “limited value without robust enforcement, particularly in the digital environment,” it said. “A strong copyright enforcement framework is predicated upon clear legal basis for liability, including both primary and secondary civil liability, such as contributory and vicarious infringement as well as inducing infringement, and for aiding and abetting criminal infringement.”

A U.S.-Japan free trade agreement should include “meaningful protections for rights holders as well as safeguards to foster the Internet’s continued growth,” said BSA|The Software Alliance. The treaty’s IP chapter “should provide online service providers with safe harbors from liability for infringing, or otherwise unlawful, content posted by third parties,” it said.

A trade pact should include rules to require ISPs “remove infringing content upon notification by a rights holder, but should not be conditioned on any obligation by an ISP to monitor or filter infringing activity,” said BSA. Such conditions would “weaken incentives for innovation and threaten the dynamism and values that have made the Internet so valuable,” it said.