Digital Trade Agreements Threaten New Wave of Job Offshoring

Recent and pending digital trade agreements could spark a massive wave of new job offshoring, as well as have far-reaching implications for corporate liability, consumer privacy and racial justice issues in the United States and around the world.

Americans have already experienced what happens to manufacturing jobs under trade deals that free corporations from regulation and taxation across borders: the jobs move wherever workers are the most exploited. The same is likely to happen with service sector jobs under digital trade deals being pushed today.

Digital trade agreements are being pushed by huge corporate interests. Digital trade agreements are often presented as a means of helping small- and medium-sized businesses reach more potential customers over the Internet. In reality, these trade pacts are an effort by some of the largest global corporations to lock-in rules that enable them to dominate the digital economy of the future at the expense of public-interest concerns. These trade pacts are not being driven by mom-and-pop businesses, but rather by mega-corporations along the lines of Google, Amazon, Apple and more.

Enabling increased offshoring of service-sector jobs. Digital trade deals that guarantee companies the right to transfer data across borders — free from localization, taxation, technology transfer, privacy, liability and other regulatory requirements — would make it much, much easier for companies to relocate service-sector jobs around the globe to wherever is the most profitable and convenient for them. This typically means outsourcing work from high-wage countries like the United States to lower-wage countries with ongoing labor rights abuses. As 5G networks become more of a reality, jobs threatened by pending digital trade agreements include those in call centers, logistics, transportation, retail, education, healthcare, data processing, financial services and more.

Undermining consumer privacy and evading corporate liability. Digital trade pacts that dictate cross-border data transfers be free from regulation also make it easier for companies to evade local consumer privacy rights, an increasingly serious issue that affects not only things like individuals’ addresses, social security numbers and online passwords, but also their personal finances, medical and genetic information, Internet browser histories and more. The ability to store such data anywhere across the globe, free from regulation, would also help companies evade legal liability for potential security breaches and other harmful behaviors. Just as policymakers are finally starting to question Big Tech’s role in our society, digital trade agreements are being pursued to help Big Tech head off future consumer-oriented policy requirements.

Concealing discriminatory practices. Digital trade rules that prevent governments from requiring corporations to reveal their source codes and algorithms make it much more difficult for regulators, academics, civil society and the public to safeguard against hidden biases in online platforms used today for everything from “predictive policing” to the processing of job applications. These trade deals increasingly shelter unfair and oppressive practices from scrutiny, criticism and reversal.

The Trump administration currently has digital trade agreements under negotiation with Brazil, Kenya and the United Kingdom, as well as with over seventy-five countries within the World Trade Organization. These pacts would expand upon recent agreements with Japan, Mexico and Canada.

Learn More

TJEF Factsheet on Digital Trade Rules (PDF)

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