Has Big Tech ‘captured’ US trade policy?

In recent weeks, politicians and advocates across the political spectrum have accused the Office of the U.S. Trade Representative (USTR), the agency negotiating trade agreements on behalf of the nation, of being “rigged” and “captured” by Big Tech companies like Amazon, Google and Facebook. They argue these trade agreements threaten countries’ ability to regulate tech companies, enact data privacy laws, and ensure the safety of new technologies.

At the same time, defenders argue that it’s precisely the USTR’s job to represent business American interests on the world stage. Without these trade agreements, U.S. companies would face discrimination, political uncertainty and unfair competition abroad.

So is USTR captured, or is it doing its job?

We tend to think of regulatory capture as instances when agencies do the bidding of private interests, instead of public interests. But according to my research, the line between public and private interests is not always so clear. Rather, capture often occurs because industry lobbyists can shape how public officials understand what the public interest is to begin with. 

This was the case during the Obama and Trump administrations, when tech companies’ policies were championed by USTR. First, tech companies gained access to trade negotiators by hiring lobbyists who were already well-known in trade policy. These lobbyists, many of whom went through the revolving door after serving in government, pursue a range of formal and informal avenues to get heard by policymakers, from Federal Register comments and advisory committee positions to dinners and coffees with old friends. In doing so, they try to redefine the public interest in service of industry interests.

“We’re players on the same team,” they might say. “What’s good for us is also good for the country. We also believe in [jobs, innovation, diversity, sustainability, insert buzzword here].” It just so happens that what advances those public interests also advances the tech industry’s bottom line. They also argue that the current system aligns with what they’re proposing: “Barriers to data flows are barriers to trade,” or, “This is already how trade works.”

When capture occurs, regulators are not faced with a choice between private and public interests. Rather, they are surrounded by an industry-crafted consensus around the public interest. For these reasons, the digital trade provisions in the Trans-Pacific Partnership and United States-Mexico-Canada Agreement were celebrated by proponents in Congress, the private sector and the federal government as bipartisan and universally loved.

Yet there’s no shortage of skepticism, coming from advocacy groups, members of Congress, academics, tech workers and other industries. Trade negotiators are aware of these concerns, but may not see them as particularly reasonable. Negotiators speak of the value of tech companies’ expertise and characterize their engagement as a positive collaborative relationship, wherein tech lobbyists are regularly consulted at all stages of the policy process.

Contrast this with the combative, fear-based relationship cultivated by some industries around issues like intellectual property. They cast advocacy groups as difficult to work with, noting that complaints about process and lack of transparency can be a distraction. In other words, it can be easy to write these groups off, either for being unserious or for not playing nice.

It’s true that, these days, the groups that don’t get what they want are often quick to throw around the term “capture.” Furthermore, it might be too early to say whether USTR, in the current administration, is captured by tech companies.

To clarify whether U.S. trade policy is captured, here are criteria that can serve as a litmus test:

1. For a given policy issue, are there organized interest groups advocating for a specific policy framework and outcome?
2. Does USTR generate data and design new policies around that framework?
3. Does USTR ultimately adopt the policies and frameworks advocated by that particular interest group?
4. Is USTR ignoring or unaware of other voices and interests from different sectors, industries, or policy communities?

If the answer to all of those questions is “yes,” then we might have a case of capture.

Let’s look at the recent Indo-Pacific Economic Framework (IPEF) talks as an example. On Point 1, it’s obvious that tech interest groups are well-organized and advocating for their digital framework. Recent emails between USTR and tech lobbyists illustrate how persistent this effort has been.

On Points 2 and 3, it’s hard to say without knowing more about how IPEF negotiations are going. To assess, we’ll need to see where the IPEF negotiating language has landed. We’ll also need to see how the agreement is implemented and enforced.

And this brings us to Point 4, where USTR has certainly signaled its willingness to engage and understand concerns from groups that have been dismissed by previous administrations. The question remains as to whether these groups will be able to break through the echo chamber that tech lobbyists have built over the past decade.

Any trade negotiation has winners and losers. If an industry gets what they want, it doesn’t mean that they captured U.S. trade policy. Debates and fights between different interest groups are good — the debate is what a pluralistic, dynamic democracy should be about.

But what is more concerning is when one side defines the issue and writes the rulebook, and there is no fight at all. As new technologies develop, and groups sound the alarm on the impacts of social media, AI and digitalization on human rights, health, national security and economic inequality, USTR should be wary of taking for granted what the tech industry tells them, and commit to serving as a credible, neutral referee in the arena.

Wendy Y. Li is a Ph.D. candidate in sociology at the University of Wisconsin-Madison who served in the Office of the U.S. Trade Representative.