On January 4, 2021, Republican Senator Chuck Grassley of Iowa, the Chairman of the Senate Finance Committee, sent a letter to the U.S. International Trade Commission requesting an investigation of (1) foreign censorship practices that impede trade or investment in key foreign markets and the (2) trade and economic effects of such policies and practices on affected businesses in the United States and their global operations. The key portion of the letter is as follows:
On June 30, 2020, the Senate Finance Committee’s Trade Subcommittee held a hearing on “Censorship as a Non-tariff Barrier.” During the course of this hearing, Members of the Finance Committee learned more about how foreign government censorship adversely impacts U.S. businesses and citizens. Of particular concern, it appears foreign governments in some cases try to apply their censorship practices extraterritorially. This effort undermines U.S. businesses – and more importantly, U.S. values.
The Members of this Committee rightly want to know more so they can better act on this important issue. Therefore, I am writing today to request that the Commission conduct an investigation, and prepare a report, informed by a survey of businesses in the United States, under section 332(g) of the Tariff Act of 1930. The report should provide detailed information on this important matter, including the following:
1. Identification and descriptions of various foreign censorship practices, in particular any examples that U.S. businesses consider to impede trade or investment in key foreign markets. The description should include to the extent practicable:
a. the evolution of censorship policies and practices over the past 5 years in key foreign markets;
b. any elements that entail extraterritorial censorship; and
c. the roles of governmental and non-governmental actors in implementation and enforcement of the practices.
2. To the extent practicable, including through the use of survey data, an analysis of the trade and economic effects of such policies and practices on affected businesses in the United States and their global operations. The analysis should include to the extent practicable, quantitative and qualitative impacts of the identified policies, including by reference, where identifiable, to:
a. impact on employment;
b. direct costs (e.g., compliance and entry costs);
c. foregone revenue and sales;
d. self-censorship; and
e. other effects the Commission considers relevant for the Committee to know.
I request the Commission deliver its report no later than 18 months from the date of this letter. As the Committee intends to make the report available to the public in its entirety, the report should not include any confidential business information.
The letter does not mention China specifically, but it does make reference to a hearing on “Censorship as a Non-Tariff Barrier to Trade” held by the Senate Subcommittee on International Trade, Customs, and Global Competitiveness on June 30, 2020, in which the participants mentioned China frequently:
Republican Senator John Cornyn:
The internet itself is becoming less global. Countries like China and Russia are not only building their own infrastructure to cut themselves off from the world but exporting their authoritarian model to other nation-states through efforts such as the Digital Silk Road.
The Chinese government is using its market power to stifle speech of our firms and people. These actions are inconsistent with our principles; they are inconsistent with our values, and those of our allies.
Richard Gere (Chairman, International Campaign for Tibet):
China does not reciprocate. It limits access to its markets in key sectors, and does not allow any American media to broadcast within China. This lack of reciprocity, fueled by an Orwellian system of state censorship – far beyond what Orwell imagined – limits both the freedom of access to information by the Chinese people, and the right of American and other foreign media companies to engage one of the largest media markets in the world
Beth Baltzan (Fellow, Open Markets Institute):
With increasing boldness, the CCP – the Chinese government – has used its considerable leverage over global markets to attack the right to freedom of expression.
Nigel Cory (Associate Director, Trade Policy, Information Technology and Innovation Foundation):
U.S. firms and their increasingly digital goods and services are susceptible to non-tariff barriers in the form of both at-the-border and behind-the-border laws and regulations. The Great Firewall of China represents a rare case where U.S. digital exports face a barrier at the border. Meanwhile, behind this clear market access barrier, U.S. firms face a complicated, opaque, and changing regulatory framework tied to content moderation and information control that together makes for a very difficult and different business environment. Moreover, in many cases, China’s approach to censorship is unwritten, with enforcement often being arbitrary and delegated to private firms.
Clete R. Willems (Partner, Akin Gump Straus Hauer & Feld LLP):
China’s censorship activities manifest themselves in many ways, both explicitly and implicitly. China imposes explicit censorship through laws and other actions that restrict free speech on the internet. China’s “Great Firewall” utilizes a variety of techniques to block access to websites and content deemed objectionable. …
Additionally, China controls the major press instruments in China – both on- and off-line – and suppresses views inconsistent with the Party’s objectives. The leading news agencies in China are unambiguous instruments of the government. …
China is in the process of implementing another form of “implicit” censorship through its social credit scoring system for individuals and corporations. …
January 26 UPDATE:
The ITC has initiated this investigation:
The U.S. International Trade Commission (USITC) is seeking input for a new general factfinding investigation on the effects of foreign censorship policies and practices on businesses in the United States.
The investigation, Foreign Censorship: Trade and Economic Effects on U.S. Businesses, was requested by the U.S. Senate Committee on Finance (Committee) in a letter received on January 4, 2021.
As requested, the USITC, an independent, nonpartisan, factfinding federal agency, will analyze the effects of censorship policies and practices in key foreign markets on businesses in the United States. The report will:
- identify foreign censorship policies and practices and provide examples that U.S. businesses believe impede trade or investment in key foreign markets;
- describe these policies, including details of how they have evolved over the past 5 years, instances of extraterritorial censorship, and the roles of governmental and non-government actors in their implementation and enforcement; and
- provide qualitative and quantitative analyses of the trade and economic effects of these policies and practices on affected U.S. businesses, with a focus on their impacts on employment, direct costs, forgone revenue and sales, and other relevant effects.
