A US-based technology group has urged the Trump administration to overcome barriers to digital trade, alleging that several countries including India and China have turned to discriminatory policies that unfairly disadvantage American companies. The group has also named South Korea, Russia, Vietnam, Canada, Mexico and Indonesia that have adopted discriminatory policies against US companies. “Multiple foreign governments have turned to discriminatory or otherwise harmful policies that unfairly disadvantage American companies and impede the ability of technology products and services to drive growth,” Information Technology Industry Council (ITI) said in its ‘report to the president on Trade Agreement Violations and Abuses’.
Rules that treat foreign firms and local companies differently are in India, China, Colombia, Indonesia, South Korea, Russia and Vietnam, the report said. Technical barriers to trade, standards and conformity assessment are in the EU, India, Mexico and Vietnam, and tariffs and fees on technology products or digital products in the EU and India, it said. Burdensome customs regulations are in Canada and Mexico, ITI said, alleging that investment restrictions, including local presence requirements are in India, China, Indonesia, and Vietnam. There are restricted access government procurement markets in India and South Korea, it said.
In the India annex of the report, ITI alleges that tariffs on technology products are inconsistent with India’s WTO commitments. “India continues to raise tariffs on an increasingly wide range of technology products, including products where it is bound under the WTO rules to apply zero tariffs, such as mobile phones, base stations, routers, and ink cartridges,” the report said. “Our view is that India is blatantly acting in a manner that is inconsistent with its WTO commitments. We encourage USTR to consider enforcement actions, such as revoking India’s GSP benefits or initiating WTO dispute settlement proceedings, to address India’s behaviour as soon as possible, as we anticipate that India will continue to raise tariffs on additional technology products,” it said.
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Objecting to the recent Make in India initiative of the Indian government, the report said that the order released by the Department of Industrial Policy and Promotion (DIPP) in the summer of 2017 obliges government agencies to provide procurement preferences to locally produced products for all public procurement, varying by cost thresholds.
In order to qualify for a local product, it must have 50 per cent local content, calculated by the product’s bill of materials, it said.
Governments around the world are preventing US tech companies from selling their products and services abroad; requiring the “localisation” of data, software, services and hardware within their borders; forcing technology transfer; and using regulatory and other barriers to put a thumb on the scale in favour of their own firms, it said. “These restrictions harm the US companies in all sectors, preventing manufacturers, service providers and small businesses from entering foreign markets and using technology products and services to support exports and other businesses in the US,” it said.
ITI Senior Vice President for Global Policy Josh Kallmer said that the US can be offered the greatest potential to use trade to enhance innovation, job creation and economic growth by removing the barriers and enabling digital information to move rapidly and freely, including across the borders. According to the report, data localisation and restrictions on cross-border data flows in China, Colombia, the European Union (EU), Indonesia, South Korea, Russia and Vietnam; while restrictions on the ability of cloud computing companies to compete is in China and South Korea.