Author: Dan Schiller

Digital Trade Free Flow of Information

Contingency at the USTR?

By Dan Schiller

The free flow of information was, as IO has discussed, the guiding doctrine of US international communications policy from the 1940s – the era of news agencies and movies – to the late 2010s and internet-enabled transnational data flows.[1] 

In the face of growing restrictions placed on cross-border data flows by numerous other countries, however, the Biden Administration thereafter reduced the purchase of this foundational policy. Free flow continued to guide the US agenda, but for digital trade blocs:  alliances between the US and specific groups of other countries. The US-Mexico-Canada trade agreement and the US-Japan trade pact were leading examples; and the US sought to expand on these, notably through negotiations on the Indo-Pacific Economic Framework for Prosperity (IPEF).

While still underlining its ostensible commitment to free cross-border flows in general, in February 2024, the Administration nevertheless moved to hedge this through an Executive Order portending restrictions on access to Americans’ “bulk-sensitive data” by “countries of concern.”[2] If the policy context had come to seem ambiguous in early 2024, however, then this was mostly because, paradoxically, in late October 2023 it had grown startlingly clear. This was when the United States Trade Representative (USTR) suddenly withdrew US support for free cross-border data flow provisions in both the ongoing IPEF and World Trade Organization negotiations – upending the prior US position.[3]

How could this happen? The US had been compelled to attenuate its longstanding free flow policy by virtue of its reduced global power or, put differently, because other countries had succeeded in mandating local storage of data and/or in imposing restrictions on international data flows. In response, the US had “shrunk” its policy to apply to digital trade blocs of allied countries – still collectively accounting for a large share of the global economy.  With the late October action, however, the Trade Representative sabotaged the very policy that the US had hitherto done its utmost to preserve, albeit with a reduced footprint. Why?

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Geopolitics US-China Relations

Hatchet Job

By Dan Schiller

After China’s leaders opened their country to foreign investment in the early 1990s, US transnational companies flooded in searching for cheap labor and new markets.  Foreign direct investment [FDI] in Chinese plants and factories, as well as portfolio investment in Chinese corporate shares, skyrocketed.[1]  Established in tax-haven jurisdictions like the Cayman Islands, shell companies – “special purpose entities” – smoothed the way for foreign venture capital, hedge funds, and other speculative interests to take advantage of the boom.

For thirty years, US manufacturing and finance capital profited mightily from these arrangements.[2]  By setting conditions on foreign investment and through other measures, meanwhile, China’s strong state strengthened and expanded its own economy. At the same time, continuing a trend which began during the late 1970s and 1980s, US working-class communities experienced prolonged devastation as high-wage jobs were relocated, exported, or simply eliminated. Anger and deepening political disaffection were the results. 

Drawing opportunistically on this anger, the unexpected presidency of Donald Trump produced a sea-change in US-China relations. Though there’s plenty of informal everyday racism in the United States, to bring it to bear on political-economic objectives requires organizational work. To rationalize his “America First” economic policy toward China, Trump turned to anti-Chinese racism, for example by referring to Covid as the “Chinese virus” and the “Wuhan virus.”[3]

The Biden administration heightened the stand-off by supplementing Trump’s tariffs with export controls on state-of-the-art semiconductor technologies, AI, and quantum computing – citing both economic and national security.[4]  Democrats and Republicans now combined a stepped-up racism with attacks on purported Chinese “subversion.” Laws restricting Chinese nationals from buying property were enacted by fifteen US states, with other such laws pending in twenty others.  Academic scientists at US universities of Chinese descent experienced racial profiling and harassment, and many did not feel safe in their jobs; Chinese graduate students were barred from academic laboratories in Florida.[5] Violence inflicted upon Asian Americans rose during the Covid 19 pandemic, and persisted at a high level.[6]

China’s Xi Jinping reciprocated by according new emphasis to nationalistic rhetoric and with defiant economic policies toward the U.S.[7] A dominant political faction in the US then took US aggression up a notch. 

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Free Flow of Information Geopolitics New World Information and Communication Order

Freedom of Information and the Rise and Decline of American Power (Part IV)

By Dan Schiller

In the world’s number-two economy, China, the party-state retained control over its national internet from the outset (the 1990s).  During recent years, China’s Data Security Law, alongside its Personal Information Protection Law and its high-level regulator, the Cyberspace Administration of China, have constructed an evolving framework for close supervision of China’s internet – and for data flows out of and into China.  Other nations, notably in southeast and west Asia, are adopting elements of the Chinese model of internet governance.[1]  Additional countries, including Russia, have strengthened state controls over their national internets.  Meanwhile, citing a variety of factors, at least sixty states have staged internet shutdowns.[2]  Thus, obstacles to unrestricted commercial data flows from and to the US have proliferated. 

In addition, alongside a growing number of other states China and Russia also have been trying to win governmental authority to regulate the global internet – as previous telecommunications networks have been regulated – through multilateral organizations, especially the International Telecommunication Union.  Thus far, they have not succeeded: the US model of “multi-stakeholderism,” which signifies loose control by big corporate capital and the US government – retains its hold.  But the US approach of multi-stakeholderism has been placed on the defensive.  The world economic crisis of 2008 and the historic process of geopolitical-economic redivision that followed it are strengthening divergent nation-state interests.

Evident as well are structural changes, of varied kinds.  During the 1990s – the second highpoint of US global power – the infrastructure of the cross-border internet was based largely in the United States, and most international internet data was transported through the US no matter its origin or destination. However, by the late 2010s the morphology of this worldwide distribution system no longer looked as it had a quarter-century before. The internet’s infrastructure had been expanded and reconfigured.  The network of subsea cables and internet exchanges was extended and thickened. US social media companies had set up data centers outside the United States, to attain faster and cheaper access to foreign markets.  Some powerful new internet companies became established in China. National regulations had mandated that data collected within a country be stored within that country’s jurisdiction; by 2023, 75% of all nations had implemented some kind of data localization rules.[3] Economic policies and antitrust protections, privacy strictures, and national security measures crisscrossed and combined in complex ways to engender these assertions of jurisdictional sovereignty.

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Free Flow of Information New World Information and Communication Order

Freedom of Information and the Rise and Decline of American Power (Part III)

By Dan Schiller

Before turning to the stresses that threaten the free flow of contemporary international communications, it is vital to conduct a brief review of today’s cross-border cultural services and data flows.  As we saw, the US derived great ideological and market advantages during the postwar decades from free flowing press and media exports. Yet these pale in comparison to the immensity of today’s flows. Thus the US dependence on the free flow of information is greater than ever before. The domains that fall under the doctrine’s purview have in fact not only expanded, but also diversified.

Today there exist substantial and vigorous media businesses headquartered beyond US borders.  Between 2003 and 2012, Brazil’s exports of cultural services leapt from $195 million to $1 billion; India’s from $108 million to $487 million.  Between 2007 and 2012, South Korea’s cultural services exports jumped from $1.5 billion to $3.2 billion; between 2006 and 2012, Turkey’s increased from $1 billion to $1.2 billion. Throughout Western Europe national commercial media constitute strong conglomerate enterprises; the largest exporter, France, saw its exports rise from $1.5 billion in 2003 to $9.9 billion in 2012.[1] Increasingly significant and multifarious flows of cultural services have accompanied this growth.  Yet two striking structural continuities also are evident.

First, unbroken US supremacy. Between 2003 and 2012, US exports of cultural services increased from $36 billion to $69 billion. No other country came close to this total. And this still understates the extent of US dominance, in that there exists considerable US foreign direct investment in the cultural industries of other exporting nations.

Second, although exports of cultural goods and services doubled between 2005/6 and 2019, according to another UNESCO report, “the participation of developing countries in global flows of cultural goods has stagnated.” Meanwhile, “developed countries continue to dominate the trade in cultural services – accounting for an average of 95% of total exports. More specifically, the Least Developed Countries represent less than 0.5% of the global cultural goods trade, while in the international trade of cultural services, they are invisible. Foreign Direct Investment also remains disproportionately in favour of developed countries.” For this reason, the author concludes, the global flow of cultural goods and services remains “a one-way street.”[2]  Although today the US is joined by a scattering of other wealthy nations in the export of culture, the Global South possesses virtually no presence in this domain.

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