Defending the Rules

William Reinsch

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From time to time in this column I’ve complained about groups trying to use trade agreements to achieve other purposes. This is another one of those times. Last week, 16 public interest groups wrote the president urging him not to include liability shield language for tech companies in trade agreements. This is a reference to the now-infamous Section 230 (of the Communications Decency Act of 1996), which prevents tech platforms from being held liable for the content of others posted on their sites. This has become controversial in the United States due to opposition from both the left and the right, albeit for different reasons, and there have been frequent calls in Congress to amend it.

The central argument of the public interest groups is that including similar language in trade agreements will prevent Congress from changing U.S. law at some later date. The more pernicious argument is that liability shield language has been slipped into trade agreements by big tech companies in pursuit of their own agendas. Lori Wallach of Public Citizen, one of the organizations signing the letter, said, “A big monopolizing industry sneaks its demands and desires and fantasies into binding trade agreement policy and then handcuffs domestic legislatures and policy-making procedures,” ignoring the fact that many of the companies the groups are concerned about either did not exist in 1996 or were certainly not monopolies and can hardly be blamed for the original language.

This demand to remove similar liability language in future trade agreements is a bad idea. (Full disclosure: I am a fan of Section 230 because I think liability should attach to the originator of the problematic content and not the intermediary that allowed the content to be posted.) First, it is what might charitably be called a bank shot—an attempt by interest groups to achieve indirectly what they have been unable to achieve directly. The signers of the letter don’t like Section 230, presumably because they think it permits tech companies to be less than diligent in taking down racist or otherwise inflammatory content, but thus far they have been unable to repeal or narrow it. Instead, they are trying to keep similar language out of trade agreements on the theory that if the language is in, that will make it more difficult for Congress to change domestic law.

There are two additional problems with this approach, neither having anything to do with the substance of Section 230. First, U.S. trade agreements that are approved by Congress (including the United States-Mexico-Canada Agreement [USMCA], which contains liability language) generally contain a provision that says in the event of a conflict between the agreement and U.S. law, the latter prevails. In other words, the United States regularly asserts its sovereignty in case of trade agreement conflicts. It is, of course, true that if there were a serious effort to repeal or narrow Section 230, opponents of that effort would no doubt cite trade agreements as a reason not to do it, along with a host of other reasons, but that should not by itself persuade anybody.

Second, guidance from Congress on negotiating trade agreements has consistently been that the U.S. trade representative should stay as close to U.S. law as possible (on the lofty assumption that our law is, of course, better than anybody else’s). Given that direction, it is hard to fault our negotiators for doing what Congress has told them to do. For better or worse—in my view, better—Section 230 is the law of the land. Including a parallel provision in USMCA is simply doing what Congress demanded. And, if you think about it, U.S. law is probably a pretty good guidepost, and at the very least a standard that prevents negotiators from wandering too far away from congressionally approved objectives.

Another, arguably more cynical, flaw in this approach is the fact that the United States does not appear to be negotiating any trade agreements anyway and does not seem to have any plans to do so. This is a mistake on several levels, most notably in that it prevents the administration from pursuing its own trade goals on labor and the environment, but in the case of Section 230, the fact that we are not doing anything means that for the time being the public interest groups have nothing to worry about.

This issue is another illustration of an ongoing struggle between the trade wonks and activists on the role of trade in public policy. You see it in the vaccine waiver debate and in the climate debate. In the latter, for example, the trade wonks argue that the rules supporting the trading system are important and climate mitigation programs should be constructed within their parameters, and environmentalists argue that their priorities are so important that the rules should be changed to accommodate them. In the vaccine debate, the proponents of the waiver argue that the public health emergency should override the rules, and the opponents argue that there are ways to achieve the objective within the framework of the rules. This ongoing battle also demonstrates how difficult it is to change the rules.

The Section 230 issue is not quite the same, but it reflects the same divide between those who support strong trade rules and those who want to change them to achieve other goals. This is not going away anytime soon.