Tech companies such as Amazon, Microsoft and Cisco are spending more on lobbyists to make their case about the North American Free Trade Agreement, as negotiations about the future of that trade deal heat up.
Trade negotiators have said that they will schedule talks on revamping NAFTA into next year. The tech industry has a clear interest in the trade pact, given its role in foreign trade and in supply chains across North America.
In 2016, U.S. companies exported more than $200 billion in technology goods, including $43 billion to Mexico and $24 billion to Canada, according to the Information Technology Industry Council, a lobbying group whose members include Apple, Alphabet and Oracle. U.S tech exports to Mexico have surged nearly 70 percent since 2006.
President Donald Trump has called NAFTA “the worst trade deal ever made” that cost the country manufacturing jobs. Those representing tech companies counter that a barrier-free trading environment benefits U.S. companies, and that the agreement should be modernized to include key policy provisions regarding data storage and tariffs.
In the second quarter of this year, 28 technology companies and industry associations hired lobbyists to discuss NAFTA with Trump administration officials or with lawmakers on Capitol Hill, according to data from the Center for Responsive Politics. That compares with 12 in the first quarter — and just one in all of last year.
- Amazon has contracted 11 lobbyists to work on trade issues including NAFTA, the company told CNBC. Amazon has spent $6.1 million on lobbying in total.
- Microsoft says it has hired 11 lobbyists to work on trade — including a ‘handful’ dedicated specifically to NAFTA — and has spent $4.5 million in total.
- Intel said it has five lobbyists working on issues including trade. The chipmaker spent $1.9 million on lobbying in the first two quarters.
- Cisco says it has 11 lobbyists working a variety of issues, including NAFTA, with a total lobbying spend so far this year of $800,000.
Josh Kallmer, the senior vice president for global policy at ITI, told CNBC that the technology industry is encouraging the White House to modernize NAFTA in a few critical ways.
For one, the agreement should ensure that data can move freely across borders, Kallmer said. Specifically, the pact between the U.S., Mexico and Canada should prohibit requirements on companies to localize data.
That has become an issue in other jurisdictions. For example, China has implemented new cybersecurity laws that require foreign companies to store users’ data within the country and partner with local firms.
“In China, there are real restrictions on data flow, and in Indonesia and Vietnam as well. Even in the European Union, there are restrictions. That cuts down the flexibility of companies to best serve their customers, and increases costs and the risks of a data breach,” Kallmer said.
Kallmer also says technology companies want to eliminate what they would consider excessive tariffs, taxes and fees on their products.
“It’s about locking in good market access,” he said.
The deadline for submitting lobbying disclosures for the third quarter is Oct. 20.
Source: Tech CNBC
Tech companies are suddenly spending much more on lobbying as NAFTA negotiations loom