CRS Considers Policy Challenges on Digital Trade

The Congressional Research Service ("CRS") reviewed the legislative and policy challenges before Congress concerning data privacy, data localization, artificial intelligence ("AI") and regulation of the technology sector.

In an In Focus Report, the CRS said that output in the U.S. digital economy, consisting mainly of e-commerce, digital services (e.g., telecommunication, internet and cloud services) and infrastructure (software and hardware) was $4.3 trillion (9% of the value of all goods and services produced in the U.S.) in 2022 (most recent data available). CRS highlighted that Congress is considering, among others:

• how proposed data protection legislation might impact consumer data protection, treatment of cross-border flows of sensitive information, minimization of foreign adversaries’ access to data on U.S. citizens and regulation of data brokers;
• legislating or conducting oversight on specific data localization issues (e.g., whether or not to mandate localization of data generated by U.S. TikTok users);
• regulation or oversight of digital platforms and emerging technologies such as AI (when considering the overall digital economy); and
• to what extent future policy may depart from or conflict with standards set in agreements such as the U.S.-Mexico-Canada Free Trade Agreement and the U.S.-Japan Digital Trade Agreement.