The Big Story: Startups voice need for strong digital trade policy
This week, in a pair of coalition letters, the startup ecosystem is calling on policymakers to advance digital trade policies that bolster their global competitiveness. On Wednesday, a coalition of 42 U.S. startups, investors, and support organizations from 18 states sent a letter to U.S. trade policymakers asking them to support free data flows, extend the e-Commerce moratorium, and provide trade resources for startups. That letter followed one from a global coalition of startup and entrepreneurship organizations calling on World Trade Organization (WTO) members to make the e-Commerce moratorium permanent. Both letters come ahead of the 13th WTO Ministerial Conference later this month, and alongside a House hearing this week exploring possible Ministerial outcomes.
The e-Commerce moratorium, which both startup coalition letters call to be made permanent, is a foundational trade policy for startups. It ensures that they don’t need to worry about yet another hurdle—in the form of customs duties—to trade abroad. The moratorium has existed since 1998 and has been extended at every Ministerial meeting since, but will expire in March if it is not renewed at the 13th Ministerial Conference later this month. At a House Ways and Means subcommittee hearing this week, witnesses and members alike underscored the importance of extending the moratorium as one of the few positive outcomes to be expected at this Ministerial. If the moratorium were to be allowed to lapse—as some countries are pushing for—barriers to trade will increase and startup competitiveness will be diminished.
The U.S. startup coalition letter also provides context for discussions on the direction of U.S. digital trade policy. Last fall, the Biden administration withdrew its support for key digital trade provisions on data flows, data localization, antidiscrimination and source code protection in plurilateral negotiations at the WTO. The letter underscores the importance of those provisions to U.S. startups’ global competitiveness and success. As the coalition writes in the letter, “trade policy impacts U.S. startups’ ability to break into new markets, create domestic jobs, earn investment, and scale their ventures.” That’s why strong digital trade policies are needed to “open opportunities and defend the ability of U.S. startups to provide their goods and services to customers around the globe.”
Policy Roundup:
House committee explores legislation to create national AI resource. On Tuesday, subcommittees of the House Space, Science and Technology Committee held a joint hearing where lawmakers dove into legislation, the CREATE AI Act, that would fully authorize the National AI Research Resource. The National Science Foundation earlier this year launched a pilot of the resource to provide access to data, compute resources, and support for exploring AI technology. The resource will help to bolster innovation and the AI talent pool in the U.S. The CREATE AI Act is expected to be marked up next month, where lawmakers should ensure startups benefit from AI resources.
Lawmakers need to extend affordable broadband program. On Thursday, the Federal Communications Commission stopped accepting new enrollments to the Affordable Connectivity Program, which provides subsidies to U.S. households so that they can better afford Internet services. The program was created as part of the Bipartisan Infrastructure law and has helped more than 20 million low income U.S. households. Despite its bipartisan popularity, program funds are expected to run out by April. Programs like the ACP help entrepreneurs access the tools they need to participate in the modern economy. Congress urgently needs to pass legislation, like the Affordable Connectivity Program Extension Act, supported by Engine and over 400 organizations, to direct funds to save the program so that the innovation ecosystem is accessible to all founders and would-be founders.
National entrepreneurship strategy recommends key policy changes for startups. This week, the National Advisory Council on Innovation and Entrepreneurship released their report "Competitiveness Through Entrepreneurship: A Strategy for U.S. Innovation" outlining 10 recommendations to drive U.S. innovation and economic growth. The report’s recommendations to improve capital access, bolster talent availability, promote R&D, and enhance the overall competitiveness of U.S. startups mirror longstanding Engine priorities and should be swiftly taken up by policymakers.
Startup Roundup:
#StartupsEverywhere: San Francisco, California. For Margot Lee Schmorak, Hostfully and VC Backed Moms are the results of her years navigating the tech industry as a woman, mother, and mission-driven professional. While Hostfully promises a better property management experience, VC Backed Moms is the ultimate online community for founders in all stages of motherhood. We spoke with her about rental property management, increased STEM education, and the ways in which policymakers can support motherhood in entrepreneurship.
