NEGOTIATING OBJECTIVES FOR A US-UK TRADE AGREEMENT
January 15, 2019
Docket No. USTR-2018-0036
Edward Gresser
Chief of the Trade Policy Staff Committee
Office of the United States Trade Representative
600 17th Street, NW
Washington, DC 20508
Dear Mr. Gresser:
BSA   The Software Alliance 1 provides the following information pursuant to the request of
the Trade Policy Staff Committee for written submissions regarding trade negotiations
between the United States and the United Kingdom (UK). Our submission relates
specifically to several topics on which the Committee invited comment: (1) negotiating
objectives for the proposed agreement; (2) relevant barriers to trade that should be
addressed in the negotiations; and (3) other measures or practices that undermine fair
market opportunities that should be addressed in the negotiations.
The software industry powers the American economy – supporting nearly ten million
American jobs.2 Likewise in 2016, the UK’s software industry was responsible for €170
billion of total UK value-added growth and supported 2.7 million jobs.3 This negotiation
presents an enormous opportunity for the United States and United Kingdom to solidify a
strong transatlantic partnership and build off the digital trade provisions of previous free
trade agreements, such as the United States-Mexico-Canada Agreement (USMCA). A
continued focus on digital trade will help ensure that US innovation continues to thrive and
that our digital economy continues to grow.
The United States has an important opportunity to set core digital standards that will not only
benefit our innovation economy, but also strengthen our workforce and foster continued US
leadership in emerging technologies. As the White House explained, “USMCA contains the
strongest measures on digital trade of any agreement. This includes rules to ensure data can

BSA’s members include: Adobe, Akamai, Apple, Autodesk, Bentley Systems, Box, Cadence, CNC/Mastercam,
DataStax, DocuSign, IBM, Informatica, MathWorks, Microsoft, Okta, Oracle, PTC, Salesforce, Siemens PLM
Software, Slack, Splunk, Symantec, Trend Micro, Trimble Solutions Corporation, Twilio, and Workday.
1

2

Software.org, The Growing $1 Trillion Economic Impact of Software (Sept. 2017), available at:
https://software.org/wp-content/uploads/2017_Software_Economic_Impact_Report.pdf
3

Software.org, The Economic Impact of Software (Oct. 2018), available at: https://software.org/wpcontent/uploads/EU_2018_Economic_Impact_factsheet_UK.pdf

 BSA Comments on US-UK Trade Negotiations
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be transferred cross-border and to minimize limits on where data can be stored.” 4 These
modern digital trade provisions should therefore serve as the basis for all future agreements
USTR negotiates.
As part of the agreement USTR is seeking in trade negotiations with the UK, BSA urges
USTR to include strong digital trade provisions that:
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Obligate the Parties to permit the cross-border transfer of data while protecting
personal information;
Prohibit data localization requirements;
Prohibit customs duties on electronic transmissions;
Protect source codes and algorithms;
Recognize electronic signatures in commercial transactions;
Protect intellectual property while including appropriate exceptions and
safeguards;
Promote the use of innovative technology in the public sector;
Support encryption in commercial products;
Promote interoperability through adherence to internationally-recognized standards
in regulating AI and other emerging technologies; and
Prohibit preferential treatment for state-owned enterprises.

Given TPA guidance 5 and marketplace developments, USTR has pursued updated digital
trade provisions in several recent trade negotiations, including the USMCA, the TransPacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP), and
the Trade in Services Agreement (TISA). These efforts provide a foundation for
modernizing US-UK trade.
BSA’s comments build on these negotiations and TPA guidance. They fall into four broad
areas: securing the new data economy; updating intellectual property protections for the
digital age; advancing the use of technology in government; and promoting trust and
security. The driving principle in all four areas is that there should be no market access
barriers and no discrimination against software.
We urge USTR to build upon the USMCA’s digital trade provisions in negotiations with the
United Kingdom. The United States had a $10.9 billion services trade surplus with the UK
in 2017 – driven by US leadership in emerging technologies and innovation across the data
economy.6 Continued US leadership in this space requires the inclusion of strong digital
trade disciplines that promote the free flow of data across borders, prohibit data localization
requirements, protect intellectual property, and promote interoperability, among other
requirements. By incorporating improvements into trade negotiations with the United
4

President Donald J. Trump Secures A Modern, Rebalanced Trade Agreement with Canada and Mexico (2018)
https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-secures-modern-rebalanced-tradeagreement-canada-mexico/
5

Congress incorporated digital trade into the principal negotiating objectives identified in the 2015 Trade Priorities
and Accountability Act. Section 102(b)(6)(C) provides that agreements should “ensure that governments refrain from
implementing trade-related measures that impede digital trade in goods and services, restrict cross-border data
flows, or require local storage or processing of data.” Section 102(b)(6)(D) provides that “where legitimate policy
objectives require domestic regulations that affect digital trade in goods and services or cross-border data flows, to
obtain commitments that any such regulations are the least restrictive on trade, nondiscriminatory and transparent,
and promote an open market environment.”
6

USTR, United Kingdom Exports, https://ustr.gov/countries-regions/europe-middle-east/europe/united-kingdom

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Kingdom and trading partners elsewhere, the software industry can continue creating US
jobs and improving the competitiveness of US industries while benefitting transatlantic
trade relations.
Data Economy
Privacy and security are bedrock principles for software services providers. BSA members
are committed to protecting customers’ privacy and security. These companies regularly
update their software products and services as well as their policies to ensure that
customers are safe in using their services and other offerings, and that they comply with
the laws of each market where they operate.
Ensuring that users are safe and their privacy respected are goals governments pursue as
well, including through laws and regulations. Unfortunately, governments sometimes invoke
these policy goals to rationalize market barriers that are intended to impede US companies.
US-UK trade negotiations should address such barriers and ensure strong protections for
digital trade.
There are several crucial commitments that US-UK negotiations should incorporate to grow
the US digital economy and foster US digital exports and jobs.
Free Movement of Data Across Borders: In view of the importance of cross-border data
flows to the modern economy, governments should not use privacy or security as disguised
market barriers or protectionist policies.
The Agreement should obligate governments to refrain from imposing barriers to cross border transfer of data, with sectoral carve outs. Recognizing that a government may
determine it to be necessary to adopt or maintain measures for legitimate domestic public
policy purposes, including privacy or security, that are not consistent with this obligation,
such measures must not discriminate against foreign service providers or constitute a
disguised restriction on trade, and must be narrowly tailored to achieve the specific
objective. A dispute settlement mechanism also must be available to allow close scrutiny
and enforcement of measures that derogate from this obligation.
No Localization Requirements: The Agreement should preclude governments from using
data localization requirements as a market access barrier in any sector of the economy.
For example, a government should not require that a data center be built inside its borders
as a condition for doing business in its territory.
The Agreement should prohibit a government from requiring, as a condition of doing
business, that a service provider use or locate computing facilities in its territory.
Recognizing that a government may determine it is necessary to adopt or maintain
measures for legitimate domestic public policy purposes, including privacy or security, that
are not consistent with this obligation, such measures must not discriminate against foreign
service providers or constitute a disguised restriction on trade, and must be narrowly
tailored to achieve the specific objective. A dispute settlement mechanism also must be
available to allow close scrutiny and enforcement of measures that derogate from this
obligation.
Financial Services: Rules specific to any specific sector, such as financial services, which
are typically addressed in separate chapters of free trade agreements, must be
substantially the same as the rules of general applicability on cross-border data flows and

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localization, and must not contain any special rules that could be interpreted to deviate
from the general ones.
New Services: The Agreement should ensure that robust market access commitments
cover both existing services and new services that may emerge in the future. Innovative
new digital services should be protected against future discrimination, and trade
agreements should not become obsolete as markets evolve and technology advances. The
United States must not accept broad carve-outs for future “new” services.
On-line services: To promote growth of Internet-based services, the United States and UK
governments should ensure that Internet intermediaries are protected against liability for
unlawful content posted or shared by third parties, consistent with US law.
Electronic Authentication and Smart Contracts: To facilitate trade, the Agreement should
require that the laws of each government allow electronic authentications and signatures to
be utilized in commercial transactions. In addition, the Agreement should require
governments to recognize the use of “smart” contracts and other autonomous machine-tomachine means for conducting transactions, such as blockchain, which are growing in
economic significance in the United States and UK.
Intellectual Property
Copyright Rules: Consistent with US law and US free trade agreements, the Agreement
should ensure that governments have copyright laws that provide meaningful protections
for rights holders as well as safeguards to foster the Internet’s continued growth as a
platform for free expression, innovation, and digital commerce. The intellectual property
chapter should provide online service providers with safe harbors from liability for infringing,
or otherwise unlawful, content posted by third parties. Such safe harbors requir e Internet
service providers (ISPs) to 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, as such obligations would weaken incentives for innovation and threaten the
dynamism and values that have made the Internet so valuable.
In addition, the Agreement should preserve the ability for US companies to develop worldclass software-enabled data analytics solutions that are powering innovations in areas such
as artificial intelligence. To that end, the Agreement should ensure that copyright laws are
sufficiently flexible to permit commercial text and data mining of all lawfully accessible
content.
Trade Secrets: The Agreement should require governments to adopt civil and criminal
causes of action and penalties for theft of trade secrets.
Government Use of Legal Software: The Agreement should require governments to adopt
laws and other measures obliging central government agencies to use only non -infringing
software, and to use such software only as authorized by the relevant license for both the
acquisition and management of the software for government use.
Technology in Government
Technology Promotion in Government: The Agreement should promote the use of
innovative technology in government operations involving the provision of services to
citizens.

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Procurement: Procurement rules should be changed to reflect the 21 st century needs of
governments.
Choice: The Agreement should ensure that companies and government agencies are free
to use the technology of their choice, and not be required to purchase and use local or
other specific technology.
Trust and Security
Encryption: The Agreement should prohibit governments from undermining the use of
encryption in commercial products by imposing restrictions on security technologies used to
protect data in-transit or at-rest. Such a provision should preclude governments from
mandating how encryption and other security technologies are designed or implemented,
including imposing requirements to build in vulnerabilities or ‘back doors’ or otherwise
requiring the disclosure of encryption keys.
International Standards: The Agreement should follow the rules agreed under the WTO
Technical Barriers to Trade provisions, as updated and revised in further agreements. This
is a key area for technology companies which have participated in the volunt ary standardssetting processes that underpin the US system.
Cybersecurity: The Agreement should seek to strengthen the foundations of digital trade
and innovation by advancing mutually beneficial approaches to cybersecurity. First, the
Agreement should build upon previous negotiating experience, such as the principles
proposed by the United Nations Group of Government Experts and endorsed by the G -7.
Second, the Agreement should encourage the mutual adoption of a voluntary, standardsbased, outcome-focused cyber risk management framework to drive the adoption of
stronger cybersecurity measures by both government and industry stakeholders. Such an
approach should focus on the National Institute for Standards and Technology’s
Cybersecurity Framework for Critical Infrastructure, which has been strongly supported by
US industry and is currently in wide use across around the world. The Administration’s
continued commitment to the NIST Framework’s approach to cybersecurity is reflected in
the recent executive order on Strengthening the Cybersecurity of Federal Networks and
Critical Infrastructure.
State-owned enterprises: The Agreement should include rules precluding governments
from favoring their state-owned enterprises over foreign service providers through
discriminatory regulation or subsidies. The Agreement should build upon previous
negotiating experience, and make these provisions enforceable through dispute settlement
procedures.
No Forced Technology Transfer: The Agreement should prohibit governments from
conditioning market access on the forced transfer of technology to persons in their
territories. Likewise, it should preclude disclosure of trade secrets or source code as a
condition of market access. These prohibitions should not, however, operate to impede
legitimate security testing and research. Such provisions should be based on previous
negotiating experience, and should clarify the legitimacy of security testing and research.
No Customs Duties on Electronic Transmissions: The Agreement should prohibit
governments from imposing customs duties on either the telecommunications value of
electronic transmissions or the value of the information being transmitted. Such a provision
should be based on previous negotiating experience.

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Conclusion
BSA welcomes the opportunity to provide this submission to inform the Administration ’s
development of specific negotiating objectives for US-UK trade negotiations. We look
forward to working with USTR and the other agencies represented on the Trade Policy Staff
Committee to make digital trade a central element of the negotiations. Removing market
access barriers for software, and incorporating the other regulatory protections described
above, will enable this growing and dynamic sector of the US economy to expand its reach;
contribute to the US service trade surplus; and continue to generate new jobs in the United
States.