Redefining protectionism: the new challenge in the digital age.

• Author: Aaronson, Susan Ariel

Congressman Sandy Levin (MI), the ranking Democrat on the House Ways and Means Committee, did not mince words. In a September 28, 2016, speech to the Council on Foreign Relations, he noted, "For decades, efforts to shape trade policy to address its downsides as well as maximize its upsides were easily labeled protectionism." Congressman Levin wanted his audience to know, "We need to rethink what is protectionist."

Congressman Levin is right to point out that twenty-first century protectionism is a slippery concept. Scholars and policymakers alike need to rethink how we define and measure it as well as reconsider the appropriate strategies to address it. Nowhere is this more evident than U.S. policies towards digital trade (goods and services delivered via information flows on the internet) and digital protectionism (barriers or impediments to digital trade, including censorship, filtering, localization) measures, and regulations to protect privacy. The stakes are huge for the internet, for the world's people, and for the U.S. economy.

In 2015, the World Trade Organization reported that from 1995 to 2014, world exports of computer and information services expanded much more rapidly than any other services sector, recording as much as 18 percent growth on average annually to an estimated US$302 billion in 2014. While Europe has some 58 percent of computer and information services exports, emerging economies, in particular India and China, have a large and growing share. But digital trade is also expanding through e-commerce platforms such as Alibaba, Amazon, and eBay. Approximately 12 percent of the global goods trade was conducted via these platforms in 2014.

While digital trade and the digital economy are important to all countries, they are particularly important to the United States. The United States International Trade Commission reported that in 2014, the United States exported over $385 billion in digitally enabled services--a broader measure of digital trade. (Statistics about the digital econo my are inexact because economists do not agree on what and how to measure the digital economy or digital trade.) U.S. firms such as Google, Facebook, Twitter, and Amazon are global trade behemoths. Digital trade represents nearly 55 percent of U.S. services exports and has generated an annual trade surplus of over $150 billion. However, this trade does not only benefit internet companies and consumers.

Digital trade does not only benefit...