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President-elect Donald Trump has unfinished business from his first term to attend to on trade. No, not tariffs. Trump needs to go on the offensive and finish what he started on digital trade.

Digital trade , from buying books online to watching movies on streaming services to exchanging data across supply chains. As the Office of the United States Trade Representative (USTR) , 鈥淸s]ome portion of nearly every business is digitally enabled, and every industry leverages digital technology to compete.鈥�

Not surprisingly, digital trade has an enormous impact on the US economy. The Congressional Research Service observes that  7.7 million American jobs, and 5% of US GDP. The Information Technology Industry Council (ITI)  out that digital trade tallies for 55% of America鈥檚 traded services exports, equating to nearly a trillion dollars in sales annually.

Yet the promise of digital trade is being held up by taxes and regulatory obstacles that are being rolled out by governments around the world. In its , for example, the USTR points a finger at Canada鈥檚 new digital services tax, China鈥檚 鈥渆xpansive state control鈥� over the collection, storage, processing, and sharing of data,鈥� India鈥檚 limitations on electronic payment providers, and the growing list of countries that impose 鈥渄ata localization鈥� requirements on US service providers.

 To lower these and other barriers to digital trade,  set out in 2019 to negotiate a 鈥減lurilateral鈥� agreement under the auspices of the World Trade Organization (WTO). The deal, known as the , would set out provisions to be reciprocated among a 鈥渃oalition of the willing,鈥� not the full WTO membership. The US played a lead role,  the elimination of digital taxes, data localization and forced-tech transfer, as well as the protection of source code, among others. 

Last July, some 90 countries agreed to the . The US was not among them. That鈥檚 because the Biden administration  of the Joint Statement Initiative, answering the demands of a .  Their suggestion that retreating on digital trade would open more 鈥減olicy space鈥� in which to regulate Big Tech is contested by others.

Digital trade rules already included exceptions to create policy space in specific circumstances, such as national security. Under the , for example, protections for source code don鈥檛 apply to critical infrastructure. The digital trade chapter of the  (USMCA) also includes exceptions, the proviso being that these shouldn鈥檛 result in measures that are 鈥渁rbitrary or unjustifiable,鈥� or 鈥渁 disguised restriction,鈥� or overly trade restrictive. The  of the Joint Statement Initiative followed suit.

What the text 诲辞别蝉苍鈥檛 do is cover source code. Or cryptography. Or data localization. Why? Because without US leadership, the coalition of willing . 

The Trump administration should reassert US preferences, as per its . American auto makers, who are increasingly morphing into tech companies with the 鈥淚nformation of Things,鈥� need more digital trade. So do our ranchers and farmers, who use AI platforms to comply with regulations on food traceability, for example. These opportunities, in turn, will create new businesses, many of which will tap America鈥檚 strengths in exporting services and intellectual property.

The US to staying out of the Joint Statement Initiative will only benefit China. Indeed, Senator Ron Wyden (D-OR)  Biden鈥檚 retreat a 鈥渨in for China, plain and simple.鈥� Likewise, Senator Mike Crapo (R-ID)  that 鈥淸w]e have warned for years that either the United States would write the rules for digital trade or China would. Now, the Biden Administration has decided to give China the pen.鈥�

            It鈥檚 clear what China plans to do with the pen. Beijing has a  for narrowing the definition of digital trade and little desire to protect personal data or source code. Moreover, as USTR explained in its 2023 , China tolerates online censorship, piracy, and the theft of intellectual property in US exports of traded services.

            When Congress took up Trump鈥檚 signature trade deal, USMCA,  voted in favor of digital trade. The President-elect should finish what he started in his first term and update the WTO鈥檚 Joint Statement Initiative to fully account for America鈥檚 preferences on digital trade.