Digitrade Digest #99


Australian envoy: IPEF countries must strike balance on digital trade

Inside U.S. Trade: Australian Ambassador to the U.S. Kevin Rudd said on Monday, urging skeptics to get behind IPEF rather than “rail against it.”

Rudd, former Australian prime minister and longtime supporter of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, urged listeners skeptical of the Biden administration’s non-traditional approach to trade not to write off the framework.

“We’ve got to accept the reality that that’s the framework that we now are working with, rather than just rail against it,” he said, citing “skeptical views” on trade in corners of both major U.S. political parties in the wake of the U.S.’ withdrawal from negotiations for the agreement now known as CPTPP.

IPEF’s digital trade chapter in particular offers a “real” and “practical” opportunity to engage on rule-setting, he argued, saying it could open “broader possibilities in terms of where we can take the rest of the IPEF agenda.”

Rudd contended Australia had succeeded in striking a “balance” between trade liberalization and “appropriate protection” in trade agreements negotiated with other partners that he said benefit small- and medium-sized businesses. On digital, he said, such a balance involves rules crafted to enable data flows and minimize data localization while maintaining “the integrity of Australia’s robust privacy system.”

“Some say in the case of digital trade that it only benefits big corporations,” he added. “We in Australia don’t see it this way.”

During a later panel on Monday, First Secretary for Trade at the Australian Embassy Katelyn Hornby suggested a similar balance could be achievable via IPEF, while stressing a need for compromise.

“There’s a lot in there that is new that may be alarming to some in this room, but I think that it is reflective of the political moment,” she said about the developing digital trade text, adding, “there’s an opportunity to land text that is politically sustainable.”

Hornby described the text as “reflective of trade politics at the moment in the U.S.”

“From our perspective, it’s an attempt to thread the needle between progressives and big business,” she said, echoing language used earlier this year by a U.S. official to describe the administration’s attempt to navigate competing domestic interests — a battle over whether “Big Tech” interests drive commitments.

“I think in IPEF, no one is going to win everything,” Hornby added, saying members must instead focus on “finding that balance and that sweet spot to then build on it into the future.”


Critics Slam Lobbying by Tech Giants in Indo-Pacific Talks

Blomberg: Activists are stepping up that campaign as the trade negotiators convene for their fourth round of negotiations of the IPEF in Busan, South Korea held last week.

When talks were held in Australia in November, Alphabet Inc.’s Google and IBM Corp. co-hosted an invitation-only reception for negotiators. In the Singapore round in May, which was supposed to be mostly closed to outside stakeholders, sessions began late one morning because of a breakfast hosted by the tech industry. Elsewhere in the bustling conference center, a “war room” was run by the US Chamber of Commerce. “Just like in past international trade agreements, Big Tech companies are swooping in to make sure they get carve-outs,” said Maria Langholz, communications director with the left-leaning advocacy group Demand Progress. The firms, she said, want to “continue to enrich themselves through their anticompetitive behavior.”

The tech giants have been active in conversations with government officials: 34 of the 40 stakeholders who gave presentations in Singapore represented corporations or their groups, most of which had ties to tech, according to people familiar with the matter who requested anonymity to discuss confidential talks.

What Musk and Zuckerberg entering the AI race could mean for regulation

The Washington Post: After complaining for weeks that artificial intelligence companies were scraping Twitter’s data, Elon Musk announced Wednesday that he’s starting his own AI company called xAI. A day later, it was reported that Mark Zuckerberg’s Meta is poised to release a commercial version of its large language model (LLM), internally dubbed LLaMA.

The moves are likely to catch the attention of regulators, who have had their hands full with AI policy in recent weeks. On Wednesday, our colleague Cat Zakrzewski broke the news that the Federal Trade Commission is investigating OpenAI’s ChatGPT for allegedly harming consumers.

Google pitches media outlets on AI that could help produce news

The Washington Post: Google is in discussions with news publishers about building and selling artificial intelligence tools that could help reporters and editors produce written journalism, a potential major acceleration of the practice of using automated tools to produce news content.

Google has been presenting the tools to news outlets since early spring, according to news executives present for meetings or later briefed on them. The product was pitched as possibly being able to collect information as part of newsgathering, write an early draft of a news story, and handle postproduction elements like writing social media posts, according to one executive who sat in on a pitch, speaking on the condition of anonymity because they were not authorized to discuss the matter. Google suggested that the tool would be most appealing to local publishers.

“We have seen large-language models like ChatGPT and Bard produce factually incorrect information. Unleashing these models in the critical, and often time-crunched, field of journalism seems premature,” said Hany Farid, a computer science professor at the University of California at Berkeley and a member of the Artificial Intelligence Lab there.

Facebook to make its AI free to use, expanding access to powerful tech

The Washington Post: The social media giant is doubling down on its “open source” approach — potentially boosting competition while also raising the risk of malicious actors using the tech Facebook owner Meta will make its cutting edge artificial intelligence technology freely available to the public for research and building new products, doubling down on an “open source” approach to the tech that heats up the AI race — and could introduce new risks.

Meta announced Tuesday its new Llama 2 “large language model” — a highly complex algorithm trained on billions of words scraped from the open internet — will be available to anyone to use free, either downloaded directly from the company or accessed through cloud providers including Microsoft, Amazon and AI start-up Hugging Face. Making it open source means companies and researchers can see the underlying code, modifying it for their own uses or porting it directly into products of their own.

Llama 2 could be a “watershed moment,” Matt Bornstein, a partner with venture capital firm Andreessen Horowitz, said on Twitter. The capabilities of the model rivals recent versions of OpenAI’s tools, he added.


Global Impact: US-China tensions raise AI stakes, complicating an already messy tech war

South China Morning Post: Ready or not, artificial intelligence is coming, and it is reshaping the US-China tech war that has evolved over the past five years.

This fact was on full display at China’s largest conference dedicated to tech, the World Artificial Intelligence Conference (WAIC), which took place in Shanghai earlier this month.

While the event attracted all the biggest domestic players, a single foreign sponsorship – from mobile chip designer Qualcomm – illustrated just how strained things have become for US tech giants trying to operate in China.


EU wants AI Act to be a global benchmark, but Asian countries are not convinced

South China Morning Post: The European Union is lobbying Asian countries to follow its lead on artificial intelligence in adopting new rules for tech firms that include disclosure of copyrighted and AI-generated content, according to senior officials from the EU and Asia.

The EU and its member states have dispatched officials for talks on governing the use of AI with at least 10 Asian countries including India, Japan, South Korea, Singapore and the Philippines, they said.

The bloc aims for its proposed AI Act to become a global benchmark on the booming technology and the way its data protection laws have helped shape global privacy standards.

However, the effort to convince Asian governments of the need for stringent new rules is being met with a lukewarm reception, seven people close to the discussions told Reuters. Many countries favour a “wait and see” approach or are leaning towards a more flexible regulatory regime.

The officials asked not be named as the discussions, whose extent has not been previously reported, remained confidential.

Singapore, one of Asia’s leading tech centres, prefers to see how the technology evolves before adapting local regulations, an official for the city state told Reuters. Officials from Singapore and the Philippines expressed concern that moving overly hasty regulation might stifle AI innovation.