Issues: USTR Barshefsky on Internet Freedom, Editorial in the Washington Post, July 9, 1998

BG9819E | Date: 1998-08-19

Just as did the printing press in the 16th century and the telegraph in the 19th, electronic communications and the Internet in particular will change almost all aspects of daily life. And if we act now to make sure global electronic commerce is allowed to reach its full potential, the changes may be most profound in business and international trade.

Today 45 percent of all business equipment investment in America is in information technology. Businesses are buying computers, setting up networks and Web sites, and taking the initial steps that will support a leap in electronic commerce, in the United States alone, from $8 billion today to $300 billion in the year 2000.

These figures may make us think first of the growth of big companies and technological leaders. And Americans rightly take pride in the success of high-tech companies that lead the world. We may well find, however, that the benefits of electronic commerce will be greatest for Americans now often shut out of trade because they are in rural areas, reservations or inner cities -- or simply lack the capital to get started.

The information superhighway is just as safe for small cars as for 18-wheelers. With the Internet, small businesses, individuals with good ideas or rural cooperatives can find international customers and products in seconds at almost no cost. They can get customs forms and fill them out more rapidly and at less expense. They can deal directly with faraway buyers, eliminating transactional costs and other barriers that make it difficult for smaller businesses to export. Best of all, they can do most of this free -- because today, in trade terms, the Internet is pristine.

Today there are no customs duties on cross-border telephone calls, fax messages or computer data links. This duty-free treatment includes electronic transmission on the Internet. And that is why a few minutes on the computer now finds the Hopi Nation in northern Arizona advertising kachina dolls to urban buyers, and warning them to protect the tribe's intellectual property by refusing to buy fakes, and small hotels and restaurants in the rural West advertising to prospective tourists.

But there is a threat to these bright prospects. Governments may see electronic commerce not as a way to increase productivity and help entire nations prosper but as a threat to domestic special interests or as an opportunity for revenue through taxes and tariffs. The de facto free-trade zone on the Internet could be hampered or even crippled by new tariffs and non-tariff barriers, drastically slowing the development of global electronic commerce.

If we act now, we can prevent this, and the early signs are good. At the recent World Trade Organization ministerial conference in Geneva, the 132 member economies agreed on a "standstill," in which no member will impose new tariffs on electronic commerce.

This is just the beginning. With hard work, we will preserve the Internet as a duty-free zone for commerce, and set out a work program that eliminates non-tariff measures, unnecessary paperwork and needless bureaucracy.

If this continues, our country will be more prosperous. Society will be more mobile and offer more opportunity for even impoverished citizens to become entrepreneurs. The American dream will be easier for all of us to reach. The same thing will happen in every country around the world. It is an opportunity we will get only once, and by acting now, we can take advantage of it.