August 15, 2013
News Release 13-073
Inv. No. 332-531
Contact: Peg O'Laughlin, 202-205-1819
DIGITAL TRADE GROWING IN THE UNITED STATES AND GLOBALLY, SAYS USITC
Digital trade -- products and services delivered via the Internet -- makes up a growing segment of
the U.S. economy and is increasing globally as well, reports the U.S. International Trade
Commission (USITC) in its publication Digital Trade in the U.S. and Global Economies, Part 1.
The USITC, an independent, nonpartisan, factfinding federal agency, completed the report at the
request of the U.S. Senate Committee on Finance. The report is the first of two requested by the
Committee. (The second report, Digital Trade in the U.S. and Global Economies, Part 2, will be
completed in July 2014.)
As requested, Digital Trade in the U.S. and Global Economies, Part 1 provides information on
the role of digital trade in both U.S. domestic commerce and international trade. It describes
notable barriers and impediments to digital trade and outlines potential approaches for further
assessing the role of digital trade in the economy. Highlights of the report follow.
- The Internet and Internet technologies benefit both producers and consumers. Producers
gain from lower costs and more efficient business practices. Consumers benefit from
improved access to products and services, more choice, and greater convenience.
- The leading companies with a large online presence are expanding their footprints in all
aspects of the U.S. and global economies. As they expand their business operations, the
products and services they offer are increasingly likely to include some, if not most, of the
following: communications services (such as email, voice, and instant messaging),
entertainment, social networking, information search/retrieval, productivity enhancement
(including data storage and analysis, productivity-enhancing software, and logistics
services), and e-commerce.
- All types of online content are growing, including music, games, videos, and books. The
economic effects of digital trade on the U.S. economy vary by sector. For music, games,
and videos, the share of digital sales has rapidly increased over the last few years,
partially offsetting declines in revenues from physical sales. E-book sales are increasing
as well, although revenue from e-books still accounts for a small share of total book sales.
- Social media websites are having widespread effects on the broader U.S. economy. Social
networking and user review sites increasingly act as advertising and marketing venues as
they become more integrated with online content providers. Retailers account for a large
portion of the advertising revenues earned by social networking sites.
- Technologies such as cloud computing -- the delivery of software and other computer
services via the Internet are transforming the provision of information and
communications technology (ICT) services. Cloud computing services allow companies
to outsource their use of ICT products and services more easily and flexibly. Small firms,
in particular, benefit from no longer having to make costly investments in ICT
infrastructure and computing capacity.
- Internet technologies have transformed how most goods and services in the economy are
produced by helping firms lower their costs and operate more efficiently while giving
consumers improved access to a wider range of products and services. Services
industries that have innovatively used Internet technologies to improve their customer
interface and back-end operations include retail, logistics, financial, professional,
healthcare, and education services.
- U.S. exports of digitally enabled services (one measure of international digital trade) grew
from $282.1 billion in 2007 to $356.1 billion in 2011, with exports exceeding imports
every year during that period. Europe, with its strong Internet infrastructure, is the most
important regional trading partner for the United States. Europe is also an important
destination for U.S. digital trade-related foreign direct investment.
- Notable barriers and impediments to digital trade identified by industry representatives
and experts included concerns about localization requirements, divergent data privacy and
protection rules, inadequate intellectual property protection and unclear legal frameworks,
growing online censorship, and traditional impediments such as burdensome customs
procedures that particularly impact small and medium-sized enterprises.
- Studies that have quantified the economic contributions of the Internet have generally
found that it has made significant contributions to U.S. output, employment, consumer
welfare, trade, innovation, productivity, and corporate financial performance.
Digital Trade in the U.S. and Global Economies, Part 1 (Inv. No. 332-531, USITC publication 4415, July
2013) is available on the USITC's Internet site at http://www.usitc.gov/publications/332/pub4415.pdf.
The report may also be requested by emailing email@example.com, by calling 202-205-2000, or by
writing the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington,
USITC general factfinding investigations, such as this one, cover matters related to tariffs or
trade and are generally conducted at the request of the U.S. Trade Representative, the House
Committee on Ways and Means, or the Senate Committee on Finance. The resulting reports
convey the USITC's objective findings and independent analyses on the subject investigated. The
USITC makes no recommendations on policy or other matters in its general factfinding reports.
Upon completion of each investigation, the USITC submits its findings and analyses to the
requester. General factfinding reports are subsequently released to the public, unless they are
classified by the requester for national security reasons.
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