On September 17, 2014, the House Energy and Commerce Committee’s Subcommittee on Commerce, Manufacturing, and Trade (“Subcommittee”) held a hearing entitled “Cross Border Data Flows: Could Foreign Protectionism Hurt U.S. Jobs.” Subcommittee members and witnesses discussed the benefits of international cross border data flows for a variety of industries, as well as the risks of limiting such data flows.  The participants also discussed several related topics, including the E.U.-U.S. Safe Harbor Framework negotiations and their relation to cross- border data flows and potential protectionist policies.

The panel generally agreed that cross-border data flows are a vital piece of the U.S. economy and that a restriction on that flow would represent a significant non-tariff trade barrier. It was stated that approximately 40 million American jobs are supported by industries that rely on intellectual property and data flows, and that those industries represent 60% of U.S. exports. Chairman Lee Terry (R-NE) suggested that a Congressional Resolution to the U.S. Trade Representative or Department of Commerce may be helpful in voicing the seriousness with which the U.S. takes the issue.

When discussing the cause of the recent proposals in some countries to limit data flows to the U.S., the panel noted recent revelations about government surveillance and retail consumer data breaches as two motivating factors.  It was suggested that Congress should reassess the Foreign Intelligence Surveillance Act to address surveillance concerns, and that the U.S. should review its current framework of privacy laws for areas of improvement. Additionally, Ranking Member Jan Schakowsky (D- IL) voiced support for the USA FREEDOM Act, H.R. 3361, and the Data Accountability and Trust Act, H.R. 4400, as two pieces of legislation that could address some of those concerns.