Contents
1AC ................................................................................................................................................................................................... 3
1AC- Inherency: PRISM / Bullrun ...................................................................................................................................................... 4
1AC- Inherency: 702.......................................................................................................................................................................... 5
1AC- Economy: Scenario- Localization A ........................................................................................................................................... 6
1AC- Economy: Scenario- Localization B ........................................................................................................................................... 8
1AC- Economy: Scenario- Encryption.............................................................................................................................................. 10
1AC- Economy: Scenario- HiTech A ................................................................................................................................................. 12
1AC- Economy: Scenario- HiTech B ................................................................................................................................................. 15
1AC- Economy: Scenario- HiTech C ................................................................................................................................................. 16
1AC- Economy: Impact- Asia ........................................................................................................................................................... 17
1AC- Economy: Impact- War ........................................................................................................................................................... 19
1AC- Economy: Impact- Innovation ................................................................................................................................................ 20
1AC- PLAN ....................................................................................................................................................................................... 26
1AC- Solvency: Signal Solves Credibility .......................................................................................................................................... 27
1AC- Solvency: Restrict 702 ............................................................................................................................................................ 28
1AC- Solvency: Credibility Solves Fear ............................................................................................................................................ 30
Add-On Advantages ....................................................................................................................................................................... 32
Protectionism 2AC 1/ ...................................................................................................................................................................... 33
Protectionism 2AC 2/ ...................................................................................................................................................................... 35
Protectionism 2AC 3/ ...................................................................................................................................................................... 36
Protectionism 2AC 4/ ...................................................................................................................................................................... 38
Protectionism- NSA = Pretext ......................................................................................................................................................... 40
Protectionism- Impact: EU .............................................................................................................................................................. 41
Protectionism- Impact: China ......................................................................................................................................................... 42
Protectionism- Impact: War............................................................................................................................................................ 50
Protectionism- Impact: Trade Solves War ...................................................................................................................................... 52
Leadership 2AC 1/ ........................................................................................................................................................................... 53
Leadership 2AC 2/ ........................................................................................................................................................................... 54
Leadership 2AC 3/ ........................................................................................................................................................................... 55
Leadership: Credibility Key ............................................................................................................................................................. 57
Leadership: Innovation Key ............................................................................................................................................................ 58
CASE Extensions ............................................................................................................................................................................. 60
Inherency: Credibility Lost .............................................................................................................................................................. 61
Economy- Localization: SQ = Fragmentation 1/ .............................................................................................................................. 62
Economy- Localization: SQ = Fragmentation 2/ .............................................................................................................................. 63
Economy- Localization: Country List ............................................................................................................................................... 64
Economy- Localization: Credibility Key ........................................................................................................................................... 66
Economy- Localization: Impact- Kills The Internet 1/ ..................................................................................................................... 68
Economy- Localization: Impact- Kills The Internet 2/ ..................................................................................................................... 69
Economy- Localization: Impact- Repression ................................................................................................................................... 70
Economy- Localization: Impact- Spying .......................................................................................................................................... 71
Economy- Localization: Impact- Germany ...................................................................................................................................... 72
Economy- Localization: Impact- Brazil ............................................................................................................................................ 73
Economy- Encryption: NIST Credibility ........................................................................................................................................... 75
Economy- HiTech: Every Company ................................................................................................................................................. 77
Economy- HiTech: Trend Bad .......................................................................................................................................................... 78
Economy- HiTech: Backdoors Kill Credibility ................................................................................................................................... 80
Economy- Impact: Global Service Sector ........................................................................................................................................ 81
Economy- Impact: Developing Economies- Big Data Key................................................................................................................ 86
Economy- Impact: Developing Economies- Leap-Frogging ............................................................................................................. 88
Solvency: Restrictions = Credibility 1/............................................................................................................................................. 89
Solvency: Restrictions = Credibility 2/............................................................................................................................................. 90
1
Solvency: Reframing Solves Opposition .......................................................................................................................................... 91
2AC Frontlines ................................................................................................................................................................................ 92
Cyber-Security Frontline 1/ ............................................................................................................................................................. 93
Cyber-Security Frontline 2/ ............................................................................................................................................................. 95
Cyber-Security Frontline 3/ ............................................................................................................................................................. 97
Cyber-Security EXT .......................................................................................................................................................................... 99
Topicality: Domestic Surveillance 1/ ............................................................................................................................................. 100
Topicality: Domestic Surveillance 2/ ............................................................................................................................................. 101
K Frontline .................................................................................................................................................................................... 102
2
1AC
3
1AC- Inherency: PRISM / Bullrun
FISA reform failed: PRISM and Bullrun are still legal- this wrecks the credibility of US
data management and encryption.
Nicole Arce 6/10/15 (“Effect Of NSA Spying On US Tech Industry: $35 Billion? No. Way More,” Tech
Times)
American technology companies are losing billions of dollars in business overseas due to Edward
Snowden's revelations about the National Security Agency's (NSA) sweeping surveillance programs. Two
years ago, the industry-funded think tank Information Technology and Innovation Foundation (ITIF) estimated that the NSA surveillance would
cost cloud computing companies such as Microsoft, Amazon and IBM somewhere around $21.5 billion to $35 billion in lost revenue due to the
Snowden revelations. However, privacy and security concerns continue to grow well into 2015, and ITIF says the figure could be far more than
its early estimate of $35 billion. "Since then, it has become clear that
the U.S. tech industry as a whole, not just the cloud
computing sector, has under-performed as a result of the Snowden revelations," say [pdf] Daniel Castro and Alan
McQuinn, authors of a new ITIF report. "Therefore, the economic impact of U.S. surveillance practices will likely far
exceed ITIF's initial $35 billion estimate." ITIF cites a string of financial reports by technology companies and cloud providers
showing disappointing earnings and lower-than-expected sales figures, with only Apple making considerable headway overseas with its growing
iPhone market in China. The foundation says the
dismal figures are partly a result of customers who are increasingly
turning to local providers over fears that the NSA will claw its way into their private information via U.S.
firms. Foreign governments, which were expending significant amounts of money to invest in IT, are turning away and encouraging their
citizens to patronize local providers. Russia, for instance, has passed a new law requiring all tech firms operating within its borders to store
information about their customers in servers located within the Russian territory, a requirement that forces companies to spend more as they
decentralize operations and build new data centers. France and Germany also have a similar law, forcing Amazon to build new facilities in
Frankfurt and Microsoft in Vienna, while China, India and Australia have their own data localization laws. China, in particular, has extreme
conditions for U.S. tech companies by requiring them to provide access to valuable intellectual property, such as source code. To make matters
worse,
U.S. lawmakers are not helping as they fail to create new laws that scale back government
surveillance, which "sacrifices robust competitiveness of the U.S. tech sector for vague and unconvincing promises of improved national
security," says ITIF. President Barack Obama recently signed into law a bill ending the NSA's bulk collection of
telephone metadata, but ITIF says the agency has several other surveillance programs in place that
need to be reformed. PRISM, for instance, allows the NSA to obtain private data about a customer in the
U.S. or abroad without the need for a warrant, while Bullrun aims to undermine encryption standards. "In the short
term, U.S. companies lose out on contracts, and over the long term, other countries create protectionist
policies that lock U.S. businesses out of foreign markets," says ITIF. "This not only hurts U.S. technology companies but
costs American jobs and weakens the U.S. trade balance."
4
1AC- Inherency: 702
These programs fall under section 702, ignored by recent reforms, which allows NSA
surveillance of data on physical servers in the United States and the manipulation of
security standards.
Danielle Kehl ’14 (with Kevin Bankston, Robyn Greene & Robert Morgus, all are analysts at New
America’s Open Technology Institute, “Surveillance Costs: The NSA’s Impact on the Economy, Internet
Freedom & Cybersecurity,” July, https://static.newamerica.org/attachments/534-surveillance-costs-thensas-impact-on-the-economy-internet-freedom-cybersecurity/Surveilance_Costs_Final.pdf)
As Congress debated the reauthorization of the USA PATRIOT Act’s Section 215 in 2011, Senator Ron Wyden (D-OR) began a slow but steady
drumbeat for reform by raising concerns about how the National Security Agency (NSA) was secretly interpreting and using the law. “When the
American people find out how their government has secretly interpreted the Patriot Act,” he warned, “they will be stunned and they will be
angry.”1 Over two years later, on June 5, 2013, The Guardian published the first leaked document by former NSA contractor Edward Snowden.
Readers around the world were shocked to learn about what Senator Wyden had been referring to all along: for years, the NSA has been
collecting nearly all of the phone records generated by major telephone companies such as Verizon on an ongoing, daily basis under Section
215’s authority2—and has been using a secret, and now widely discredited, interpretation of the law to do it.3 Over the course of the past year,
the world has learned that this bulk collection program was just one small part of the NSA’s massive surveillance apparatus.4 Just a day after
the first leak, The Washington Post ran a story about PRISM,
the NSA’s “downstream” collection program authorized
under Section 702 of the Foreign Intelligence Surveillance Act (FISA). Under the PRISM program, the NSA compels
major tech companies like Google, Yahoo, Microsoft, Facebook, and Twitter to turn over the contents of
communications stored on company servers that have been sent or received by targets that the NSA
reasonably believes are outside of the United States.5 While few details are known about the programs the NSA operates
under Section 702, and several of the details regarding the PRISM program are a subject of debate,6 a declassified 2011 Foreign Intelligence
Surveillance Court opinion revealed that the
NSA collects more than 250,000,000 Internet communications
annually using Section 702 and that “the vast majority of these communications are obtained from
Internet service providers” through the PRISM program.7 The remainder of those communications comes from
Section 702 surveillance that is conducted “upstream”—that is, surveillance conducted not by obtaining
stored communications from cloud providers’ servers but by tapping directly into the U.S. Internet
backbone network that carries domestic, international, and foreign communications.8 Beyond NSA
surveillance inside the United States under Section 215 and Section 702, the NSA engages in massive
surveillance of Internet and telephone communications outside of the country as well. Unconstrained by
statute and subject only to Executive Branch oversight under the Reagan-era Executive Order 12333,9 this extraterritorial surveillance was
revealed in October 2013 to include the monitoring of key private data links that connect Google and Yahoo data centers around the world—
monitoring that in just 30 days processed 181,280,466 new records that traversed those links.10 Similarly, the NSA is using Executive Order
12333 to authorize the collection of millions of email address books globally,11 and the recording of vast numbers of international phone
calls—sometimes all of the phone traffic in an entire country.12 Executive Order 12333 is also presumably the authority under which the NSA is
assisting British intelligence agencies in acquiring millions of webcam photos sent by users of Yahoo,13 and under which the NSA is collecting
over five billion cell phone location data points per day, enabling it to track individuals’ movements and relationships with others.14 In addition
to the mass surveillance operations that have dominated the past year’s headlines, leaked documents revealed that the NSA employs a unit of
elite hackers called the Office of Tailored Access Operations that engages in extensive and highly secretive cyber operations.15 These
operations include cracking and undermining encryption standards, inserting vulnerabilities into widelyused software and hardware products, secretly stockpiling information about software vulnerabilities
that the NSA discovers so that they can be exploited for intelligence purposes rather than fixed, and
developing a global network of malware that has been secretly installed on computers and in networks around the world to better facilitate the
NSA’s surveillance.16
5
1AC- Economy: Scenario- Localization A
Advantage One: the Economy
A. Domestic Data Surveillance Wrecks the Economy
Scenario 1: Data Localization:
NSA surveillance has triggered data localization: This destroys the international
economy in 3 ways: increases costs for every part of the economy, erodes innovation,
and reverses the efficiencies of digital commerce.
Jonah Force Hill ‘14 (technology and international affairs consultant based in San Francisco and a Fellow
of the Global Governance Futures program, “THE GROWTH OF DATA LOCALIZATION POSTSNOWDEN: ANALYSIS AND RECOMMENDATIONS FOR U.S. POLICYMAKERS AND
BUSINESS LEADERS”)
Over the course of recent decades, and principally since the commercialization of the Internet in the early 1990s, governments around the world
have struggled to address the wide range of logistical, privacy, and security challenges presented by the rapid growth and diversification of digital
data. The mounting online theft of intellectual property, the growth of sophisticated malware, and the challenges involved in regulating the flow,
storage, and analysis of data have all – to varying degrees – increasingly challenged governments’ ability to respond with effective policy. Until
recently, these data management issues were left to the men and women of computer science departments, advocates for technology companies,
In the wake of former
NSA contractor Edward Snowden’s disclosures, however, which revealed to the global public
the scale and intensity of intelligence collection online, data security and privacy issues have
now become front-page headlines and the topics of dinner-table conversation the world over. As
a result, governments are increasingly feeling compelled to do something they see as meaningful
– if not outright drastic – to protect their citizens and their businesses from the many challenges
they perceive to be threatening their nation’s data and privacy. Of the various responses under consideration,
and to the few government attorneys and bureaucrats responsible for overseeing Internet and data regulation.
perhaps none has been more controversial – or more deeply troubling to American businesses – than the push to enact laws that force the
“localization” of data and the infrastructure that supports it. These are laws that limit the storage, movement, and/or processing of data to specific
geographies and jurisdictions, or that limit the companies that can manage data based upon the company’s nation of incorporation or principal
situs of operations and management. By keeping data stored within national jurisdictions, or by prohibiting data from traveling through the
territory or infrastructure of “untrustworthy” nations or those nations’ technology companies, the argument goes, data will be better protected,
and surveillance of the kind orchestrated by the NSA curtailed. Today, more
than a dozen countries, 1 both developed
and developing, have introduced or are actively contemplating introducing data localization laws.
The laws, restrictions, and policies under consideration are diverse in their strategies and effects. Some proposals would enforce limitations for
data storage, data transfer, and data processing; others require the local purchasing of ICT equipment for government and private sector
procurements. There are proposals for mandatory local ownership of data storage equipment, limitations on foreign online retailers, and forced
local hiring. Proposals of this sort are not historically unprecedented. Indeed, forms of data localization policies have been actively in place in
many countries for years, including in the United States, where sensitive government data, such as certain classified materials, must be
maintained within the servers of domestic companies. Broader localization rules, which apply to all citizen data, have tended to be pursued by
authoritarian governments such as Russia, China, and Iran, for which data localization laws have been viewed as an effective means to control
information and to monitor the activities of their citizens.2 PostSnowden,
however, even democratic countries are
now seriously considering these more expansive data localization measures. Most notably, Brazil, Germany,
and India– countries that have witnessed some of the most virulent anti-NSA reactions –are now contemplating enacting significant data
localization laws. The EU is also contemplating localization within its area of authority.3 This
is a deeply troubling
development – not just for the technology firms of the United States who stand to lose customers
and contracts as a result of these policies,4 but also for all the nations, firms, and individual
Internet users who rely on the Web for economic trade and development, communications, and
civic organizing. Not only do data localization policies fail to achieve their stated goals, they
6
introduce a host of unintended consequences. By restricting data flows and competition
between firms, localization will likely bring up costs for Internet users and businesses, may
retard technological innovation and the Internet’s “generativity,” 5 may reduce the ability
of firms to aggregate services and data analytics through cloud services, and will surely
curb freedom of expression and transparency globally. Ironically, data localization policies
will likely degrade – rather than improve – data security for the countries considering
them, making surveillance, protection from which is the ostensible reason for localization,
easier for domestic governments (and perhaps even for foreign powers) to achieve.
Restricted routing, often a core component of data localization rules, may be technically
infeasible without initiating a significant overhaul of the Internet’s core architecture and
governance systems, which itself would have significant negative effects. And perhaps most
worrying, data localization policies – if implemented on a wide international scale – could have
the effect of profoundly fragmenting the Internet,6 turning back the clock on the integration of
global communication and ecommerce, and putting into jeopardy the myriad of societal benefits
that Internet integration has engendered.
7
1AC- Economy: Scenario- Localization B
Data services key to poverty reduction, global growth, and trade between the US and
Europe.
Jonah Force Hill ‘14 (technology and international affairs consultant based in San Francisco and
a Fellow of the Global Governance Futures program, “THE GROWTH OF DATA
LOCALIZATION POST-SNOWDEN: ANALYSIS AND RECOMMENDATIONS FOR U.S.
POLICYMAKERS AND BUSINESS LEADERS”)
Economic Growth Objectives Not Well Served Data localization (most especially, as a ban on foreign firms operating local servers) appeals to
those political and business leaders who hope to give domestic technology firms a competitive advantage. It also appeals to those leaders who
believe that that competitive advantage will, over time, lead to the development of a strong technology sector, following what might be thought of
as a “China developmental model,” in which early domestic protectionism is tapered off as local firms find their competitive edge. But again,
the benefits of this kind of policy (which generally only advantage certain favored local companies) are outweighed by its
drawbacks. By prohibiting foreign firms from operating in country, or by making operations prohibitively expensive for foreign firms,
governments are dramatically limiting the options available to local consumers. This includes small businesses that often require the cheaper and
more advanced services that only international firms can provide. Indeed, even non tech-related industries that nevertheless rely on IT services,
such as advanced manufacturing, are likely to see that their costs rise and their efficiencies deteriorate as a consequence of Internet protectionism
in the guise of localization. These costs may not be trivial. The European Centre for International Political Economy has estimated that if and
when cross-border data flows between the U.S. and EU are seriously disrupted (assuming existing models for crossborder transfer and processing of data, such as the Safe Harbor and BCRs108 are disrupted ), the negative impact on EU GDP
could reach -0.8% to -1.3%, and EU services exports to the United States could drop by as much as -6.7%
due to loss of competitiveness.109 Developing countries, too, would likely suffer. There, Internet access and data
services are significant drivers of economic growth. According to several important studies on the issue, access
to the Internet can dramatically reduce the effect on developing countries of geographical
isolation from major exports markets.110And, according to a Deloitte study, expanding access to the 4
billion people who live in developing countries to levels developed economies currently
enjoy would increase productivity in those areas by as much as 25 percent, add $2.2 trillion
in additional GDP, increase the GDP growth rate by 72 percent, add more than 140 million new jobs, and lift
160 million people out of extreme poverty. 111 Certainly, the cost inherent in localization alone will not forestall
all of these positive developments, but it would retard them. To leaders in developing nations such as India and Brazil, where data localization
measures are under serious consideration, these potential adverse economic impacts ought to give serious pause. Less directly, but perhaps even
more critically as a long-term matter, data localization adversely affects the Internet’s capacity for productivity by reducing the Internet’s
“network effect” and “generativity.112” By
placing limitations on which firms can participate in the
network, data localization reduces the overall size of the network, which, according to
network theory as well as Metcalfe’s Law (which states that the value of a communications
network is proportional to the number of users of the system), would bring up both costs and
the overall innovative potential of the aggregated network. Consider big data analytics, for example, which
often involves the transfer of data from numerous sources without regard to geography and can have major benefits for society.113 By
severing the ties between nations and the data that can be collected an analyzed, data
localization vastly diminishes the capacity for new discoveries and for new solutions to some of
the world’s most pressing problems. Certainly, there are good reasons for supporting local Internet infrastructure development.
Developing local Internet infrastructure has been shown to help to keep costs down (by avoiding having to send data afar unnecessarily and by
providing greater options in pricing negotiations) and to keep service available when connectivity to the outside would is disrupted. 114
Governments can and should invest in building up local capabilities. But restricting data
flows and preventing foreign competition are not the ways to facilitate that type of local
8
development. Decisions regarding where to store data and how it should be handled – except in the rare cases of national security or other
special privacy cases (for example, there may be good reasons for medical data and the like to be given special treatment) – should be driven by
efficiencies, not by political expediency.
9
1AC- Economy: Scenario- Encryption
Scenario 2- Encryption:
Encryption Credibility is crucial to every sector of the economy: financial services,
R&D, health care, etc. The SQ creates security risks, interoperability failures, and a
collapse of US competitiveness.
Danielle Kehl ’14 (with Kevin Bankston, Robyn Greene & Robert Morgus, analysts at New America’s
Open Technology Institute, “Surveillance Costs: The NSA’s Impact on the Economy, Internet Freedom &
Cybersecurity,” July, https://static.newamerica.org/attachments/534-surveillance-costs-the-nsasimpact-on-the-economy-internet-freedom-cybersecurity/Surveilance_Costs_Final.pdf)
It is wholly inappropriate for the U.S. government to covertly influence security standards-setting processes in a way that may weaken those
standards or introduce security flaws. The
NSA’s efforts in this area have undermined overall trust in the security of
the Internet and diminished confidence in the National Institute of Standards and Technology (NIST). As the President’s
Review Group explains, “Encryption is an essential basis for trust on the Internet… The use of reliable encryption software to
safeguard data is critical to many sectors and organizations, including financial services, medicine and
health care, research and development, and other critical infrastructures in the United States and
around the world.”345 Consequently, Recommendation 29 of its report urges the U.S. government to: “(1) fully support and not
undermine efforts to create encryption standards; (2) not in any way subvert, undermine, weaken, or make vulnerable generally available
commercial software; and (3) increase the use of encryption and urge US companies to do so, in order to better protect data in transit, at rest,
in the cloud, and in other storage.”346 Confidence in
U.S. encryption standards is critical not only to the security
of commercial products, but also to interoperability and the health and competitiveness of the
American technology industry.347 Insofar as the NSA continues to provide technical expertise on encryption standards, the Federal
Information Security Management Act should be amended so that NIST is no longer required to consult with the NSA when it seeks to issue
new or updated encryption standards. Rather, these consultations should happen only on an as-needed basis and should focus entirely on the
technical questions at hand. This will help to prevent these consultations from becoming an opportunity for the NSA to exploit or influence the
standards setting process. This
would also help the United States to send a message that it supports strong,
widespread use of encryption instead of seeking to undermine it to increase the monitoring capabilities
of the NSA. Representative Alan Grayson’s amendment to the Frontiers in Innovation, Research, Science and Technology Act (H.R. 4186),
which was approved by the House Committee on Science, Space, & Technology in May 2014,348 provides a good model for how to enact this
reform, and is consistent with recommendations made by the Visiting Committee on Advanced Technology (VCAT) in its July 2014 report.349 A
similar measure was approved in June 2014 by a voice vote of the House of Representatives when it was offered by Representative Grayson as
an amendment to the National Defense Authorization Act (NDAA) for Fiscal Year 2015 (H.R. 4435),350 though it remains to be seen whether
that amendment will make it into the final appropriations bill. Policymakers at NIST can also take proactive steps to rebuild confidence in its
standards-setting process. In February 2014, the agency published a draft document that “outlines the principles, processes, and procedures of
NIST’s cryptographic standards efforts.”351 The document lays out the factors that drive NIST’s development efforts to ensure that standards
are “robust and have the confidence of the cryptographic community in order to be widely adopted and effective at securing information
systems worldwide.”352 While this is a positive first step, substantial
efforts are still required to reestablish the
agency’s credibility and trust in its work, particularly by increasing transparency and openness associated with the standard
setting process. The VCAT lays out a series of recommendations in its July 2014 report that are worthy of consideration.353 Specifically, NIST
should publish information about whom it consults in the development process, as well as more
technical proof establishing the efficacy of the standards that it issues. The failure to publish these
technical proofs was a key criticism of the standard setting process associated with the 2006 NSAcompromised encryption standard.354 In order to succeed at its core mission, NIST must take
10
affirmative steps to address concerns about its role in promoting weaker encryption standards and
clarify its relationship with other partners and parts of the U.S. government.
11
1AC- Economy: Scenario- HiTech A
Scenario 3: HiTech:
NSA surveillance destroys productivity and growth by undermining ALL tech related
industries by destroying confidence in the integrity of data services.
Danielle Kehl ’14 (with Kevin Bankston, Robyn Greene & Robert Morgus, analysts at New America’s
Open Technology Institute, “Surveillance Costs: The NSA’s Impact on the Economy, Internet Freedom &
Cybersecurity,” New America’s Open Technology Institute July 2014 Policy Paper, July,
https://static.newamerica.org/attachments/534-surveillance-costs-the-nsas-impact-on-the-economyinternet-freedom-cybersecurity/Surveilance_Costs_Final.pdf)
“It is becoming clear that the post-9/11
surveillance apparatus may be at cross-purposes with our high-tech
economic growth,” declared Third Way’s Mieke Eoyang and Gabriel Horowitz in December 2013. “The economic
consequences [of the recent revelations] could be staggering.”25 A TIME magazine headline projected that “NSA Spying Could
Cost U.S. Tech Giants Billions,” predicting losses based on the increased scrutiny that economic titans like Google, Microsoft, Facebook, and
Yahoo have faced both at home and abroad since last June.26 The
NSA’s actions pose a serious threat to the current
value and future stability of the information technology industry, which has been a key driver of
economic growth and productivity in the United States in the past decade.27 In this section, we examine how
emerging evidence about the NSA’s extensive surveillance apparatus has already hurt and will likely continue to hurt the American tech sector
in a number of ways, from dwindling U.S. market share in industries like cloud computing and webhosting to dropping tech sales overseas. The
the major losses
will likely result from diminishing confidence in U.S. companies as trustworthy choices for foreign
government procurement of products and services and changing behavior in the business-to-business
market. Costs to the U.S. Cloud Computing Industry and Related Business Trust in American businesses has taken a
significant hit since the initial reports on the PRISM program suggested that the NSA was directly tapping into the servers of
impact of individual users turning away from American companies in favor of foreign alternatives is a concern. However,
nine U.S. companies to obtain customer data for national security investigations.28 The Washington Post’s original story on the program
provoked an uproar in the media and prompted the CEOs of several major companies to deny knowledge of or participation in the program.29
The exact nature of the requests made through the PRISM program was later clarified,30 but the public attention on the relationship between
American companies and the NSA still created a significant trust gap, especially in industries where users entrust companies to store sensitive
personal and commercial data. “Last year’s national security leaks have also had a commercial and financial impact on American technology
companies that have provided these records,” noted Representative Bob Goodlatte, a prominent Republican leader and Chairman of the House
Judiciary Committee, in May 2014. Given heightened concerns about the NSA’s ability to access data stored by U.S. companies, it is no surprise
that American companies offering cloud computing and webhosting services are among those experiencing the most acute economic fallout
from NSA surveillance. Within just a few weeks of the first disclosures, reports began to emerge that American cloud computing companies like
Dropbox and Amazon Web Services were starting to lose business to overseas competitors.32 The CEO of Artmotion, one of Switzerland’s
largest offshore hosting II. Direct Economic Costs to American Companies “Last year’s national security leaks have also had a commercial and
financial impact on American technology companies that have provided these records. They
have experienced backlash from
both American and foreign consumers and have had their competitive standing in the global
marketplace damaged. -Rep. Bob Goodlatte, Chairman of the House Judiciary Committee “ 8 Surveillance Costs: The NSA’s Impact on
the Economy, Internet Freedom & Cybersecurity providers, reported in July 2013 that his company had seen a 45 percent jump in revenue since
the first leaks,33 an early sign that the country’s perceived neutrality and strong data and privacy protections34 could potentially be turned into
a serious competitive advantage.35 Foreign
companies are clearly poised to benefit from growing fears about the
security ramifications of keeping data in the United States. In a survey of 300 British and Canadian businesses released by
PEER 1 in January 2014,36 25 percent of respondents indicated that they were moving data outside of the U.S. as a result of the NSA
revelations. An
overwhelming number of the companies surveyed indicated that security and data privacy
were their top concerns, with 81 percent stating that they “want to know exactly where their data is
12
being hosted.” Seventy percent were even willing to sacrifice performance in order to ensure that their data was protected.37 It appears
that little consideration was given over the past decade to the potential economic repercussions if the NSA’s secret programs were revealed.38
This failure was acutely demonstrated by the Obama Administration’s initial focus on reassuring the public that its programs primarily affect
non-Americans, even though non-Americans are also heavy users of American companies’ products. Facebook CEO Mark Zuckerberg put a fine
point on the issue, saying that the government “blew it” in its response to the scandal. He noted sarcastically: “The government response was,
‘Oh don’t worry, we’re not spying on any Americans.’ Oh, wonderful: that’s really helpful to companies [like Facebook] trying to serve people
around the world, and that’s really going to inspire confidence in American internet companies.”39 As Zuckerberg’s comments reflect, certain
parts of the American technology industry are particularly vulnerable to international backlash since growth is heavily dependent on foreign
markets. For example, the U.S. cloud computing industry has grown from an estimated $46 billion in 2008 to $150 billion in 2014, with nearly
50 percent of worldwide cloud-computing revenues coming from the U.S.40 R Street Institute’s January 2014 policy study concluded that in the
next few years, new products and services that rely on cloud computing will become increasingly pervasive. “Cloud
computing is also
the root of development for the emerging generation of Web-based applications—home security,
outpatient care, mobile payment, distance learning, efficient energy use and driverless cars,” writes R
Street’s Steven Titch in the study. “And it is a research area where the United States is an undisputed leader.”41 This trajectory may be
dramatically altered, however, as a consequence of the NSA’s surveillance programs. Economic forecasts
after the Snowden leaks have predicted significant, ongoing losses for the cloud-computing industry in
the next few years. An August 2013 study by the Information Technology and Innovation Foundation (ITIF) estimated that revelations
about the NSA’s PRISM program could cost the American cloud computing industry $22 to $35 billion over the next three years.42 On the low
end, the ITIF projection suggests that U.S. cloud computing providers would lose 10 percent of the foreign market share to European or Asian
competitors, totaling in about $21.5 billion in losses; on the high-end, the $35 billion figure represents about 20 percent of the companies’
foreign market share. Because the cloud computing industry is undergoing rapid growth right now—a 2012 Gartner study predicted global
spending on cloud computing would increase by 100 percent from 2012 to 2016, compared to a 3 percent overall growth rate in the tech
industry as a whole43—vendors in this sector are particularly vulnerable to shifts in the market. Failing to recruit new customers or losing a
competitive advantage due to exploitation by rival companies in other countries can quickly lead to a dwindling market share. The ITIF study
further notes that “the percentage lost to foreign competitors could go higher if foreign governments enact protectionist trade barriers that
effectively cut out U.S. providers,” citing early calls from German data protection authorities to suspend the U.S.-EU Safe Harbor program
(which will be discussed at length in the next section).44 As the R Street Policy Study highlights, “Ironically, the NSA turned the competitive
edge U.S. companies have in cloud computing into a liability, especially in Europe.”45 In
a follow up to the ITIF study, Forrester
In a survey of 300 British and Canadian businesses released by PEER 1 in January 2014, 25 percent of
respondents indicated that they were moving data outside of the U.S. as a result of the NSA revelations.
New America’s Open Technology Institute 9 Research analyst James Staten argued that the think tank’s estimates were low, suggesting that the
actual figure could be as high as $180 billion over three years.46 Staten highlighted two additional impacts not considered in the ITIF study. The
first is that U.S.
customers—not just foreign companies—would also avoid US cloud providers, especially
for international and overseas business. The ITIF study predicted that American companies would retain their domestic market
share, but Staten argued that the economic blowback from the revelations would be felt at home, too. “You don’t have to be a French
company, for example, to be worried about the US government snooping in the data about your French clients,” he wrote.47 Moreover, the
analysis highlighted a
second and “far more costly” impact: that foreign cloud providers, too, would lose as
much as 20 percent of overseas and domestic business because of similar spying programs conducted by
other governments. Indeed, the NSA disclosures “have prompted a fundamental re-examination of the role of intelligence services in
conducting coordinated cross-border surveillance,” according to a November 2013 report by Privacy International on the “Five Eyes”
intelligence partnership between the United States, the United Kingdom, Canada, Australia, and New Zealand.48 Staten predicts that as the
surveillance landscape around the world becomes more clear, it could have a serious negative impact on all hosting and outsourcing services,
resulting in a 25 percent decline in the overall IT services market, or about $180 billion in losses.49 Recent
reports suggest that things are, in fact, moving in the direction that analysts like Castro and Staten suggested.50 A survey of 1,000
“[Information and Communications Technology (ICT)] decision-makers” from France, Germany, Hong Kong, the UK, and the USA in February
and March 2014 found that the disclosures “have had a direct impact on how companies around the world think about ICT and cloud
computing in particular.”51 According to the data from NTT Communications, 88 percent of decision-makers are changing their purchasing
behavior when it comes to the cloud, with the vast majority indicating that the location of the data is very important. The results do not bode
well for recruitment of new customers, either—62 percent of those currently not storing data in the cloud indicated that the revelations have
since prevented them from moving their ICT systems there. And finally, 82 percent suggested that they agree with proposals made by German
Chancellor Angela Merkel in February 2014 to have separate data networks for Europe, which will be discussed in further detail in Part III of this
report. Providing direct evidence of this trend, Servint, a Virginia-based webhosting company, reported in June 2014 that international clients
have declined by as much as half, dropping from approximately 60 percent of its business to 30 percent since the leaks began.52 With faith in
U.S. companies on the decline, foreign companies are stepping in to take advantage of shifting public perceptions. As Georg Mascolo and Ben
13
Scott predicted in a joint paper published by the Wilson Center and the New America Foundation in October 2013, “Major commercial actors
on both continents are preparing offensive and defensive strategies to battle in the market for a competitive advantage drawn from Snowden’s
revelations.”53 For example, Runbox, a small Norwegian company that offers secure email service, reported a 34 percent jump in customers
since June 2013.54 Runbox markets itself as a safer email and webhosting provider for both individual and commercial customers, promising
that it “will never disclose any user data unauthorized, track your usage, or display any advertisements.”55 Since the NSA revelations, the
company has touted its privacy-centric design and the fact that its servers are located in Norway as a competitive advantage. “Being firmly
located in Norway, the Runbox email service is governed by strict privacy regulations and is a safe alternative to American email services as well
as cloud-based services that move data across borders and jurisdictions,” company representatives wrote on Frankly I think the government
blew it... The government response was, ‘Oh don’t worry, we’re not spying on any Americans.’ Oh, wonderful: that’s really helpful to companies
trying to serve people around the world, and that’s really going to inspire confidence in American internet companies.” -Mark Zuckerberg, CEO
of Facebook ,, 10 Surveillance Costs: The NSA’s Impact on the Economy, Internet Freedom & Cybersecurity its blog in early 2014.56 F-Secure, a
Finnish cloud storage company, similarly emphasizes the fact that “its roots [are] in Finland, where privacy is a fiercely guarded value.”57
Presenting products and services as ‘NSA-proof’ or ‘safer’ alternatives to American-made goods is an
increasingly viable strategy for foreign companies hoping to chip away at U.S. tech competiveness.58
14
1AC- Economy: Scenario- HiTech B
High tech is key to the US economy- 4 Warrants:
 Spill-over to all sectors
 Geographically diverse benefits
 4-to-1 multiplier effect
 Recovery from the recession empirically proves
Laura K. Donohue ’15 (Georgetown University Law Center, “High Technology, Consumer Privacy, and
U.S. National Security,” http://scholarship.law.georgetown.edu/facpub/1457
)
High technology is central to the U.S. economy. A recent study by the Bay Area Economic Council Institute sought to
ascertain how important the high tech industry is just for the U.S. labor market. It found that not only are high-tech jobs critical
for generating employment in other sectors, but that growth in the hightech sector has increasingly
been happening in areas of great economic and geographic diversity, suggesting that the high-tech
industry is not limited to one ethic, social, or economic strata. High-technology has been one of the fastest-growing
sectors: between 2004 and 2012, the employment growth in high-tech outpaced private sector growth by a ratio of 3:1. Jobs in Science,
Technology, Engineering, and Mathematics (STEM) outpaced job gains across all occupations by a ratio of 27:1. 98 Employment predictions put
the demand for high-tech workers to increase 16.2% 2011 to 2020, with STEM employment increasing 13.3% during the same period.99 The
study found that the generation of jobs in high-technology had farreaching effects. In addition to the income gains generated by innovation,
productivity and a global marketplace, high-technology industrial growth generated other types of jobs. Health care, education, law,
restaurants, hotels and personal services, as well as goods-producing construction sectors grew in tandem with high tech, largely because of a
local multiplier effect: “For
each job created in the local high-tech sector,” the study concluded,
“approximately 4.3 jobs are created in the local non-tradable sector in the long run.”100 Even as early as 2002,
the National Science Foundation found that the global market for high-technology goods is growing at a swifter rate than for other
manufactured goods. More than this, “high-technology industries are driving economic growth around the world.”
This study built on one released in 1995 by the National Academies, which had looked carefully at the role and importance of high tech
companies in the U.S. economy.102 Indeed, study after study reflects the importance of high-technology in the U.S. economy. In 2015, a
Brookings study found that “advanced
industries” (which include high-technology, STEM, and industries, like aerospace, which are
sizable economic anchor for the U.S. economy.”103 They
led the post-recession recovery. Brookings found that with only 9 percent of the total U.S. employment, advanced industries
heavily dependent on advanced technologies), “represent a
produce some $2.7 trillion per year—around 17% of the country’s GDP. Further, about 60 percent of U.S. exports are tied to this sector, with
2.2 jobs being created domestically for every new advanced industry job. In sum, “Directly
and indirectly. . . the sector
supports almost 39 million jobs—nearly one-fourth of all U.S. employment.”104
15
1AC- Economy: Scenario- HiTech C
Productivity is Independent: Advanced industries are key to continued recovery.
Stagnation will destroy US growth.
Adams Nager 6/22/15 (economic research analyst at Information Technology Innovation Foundation,
“No Growth without Labor Productivity,” http://www.innovationfiles.org/no-growth-without-laborproductivity/ )
Last week the Bureau of Labor Statistics handed down some pretty dismal news for American manufacturing—news that was largely
overshadowed by the façade of job growth numbers. Yes, American manufacturing is adding jobs. But
our labor productivity
numbers have fallen. Labor productivity is simply how many goods can be produced with an hour of work and matters because along
with the size of the labor pool, it determines the overall output of an economy. Factors such as technology and capital
investment let workers produce more than they could on their own. In the first quarter of 2015, the number of American hours worked (a proxy
for the number of workers) grew at a 1.5 percent annual rate. However, the real value of the goods America produced declined at a 1.6 percent
annual rate over the same period. And that’s very dangerous, especially because that decline extends to the manufacturing sector.
Manufacturing labor productivity is actually down by 1 percent in the first quarter. And, while the first quarter findings may be the result of a
measurement issue, multi-year trends show labor productivity growth much slower than our competitors. In the last two years, annual
manufacturing labor productivity growth has averaged a mere 1.7 percent annual growth rate, down from 2.5 percent annual growth from
2010 to 2013. That rate fell well behind other nations competing against the United States in high-tech industries. From 2010 to 2013, the
European Union averaged 4.1 percent average annual labor productivity growth, Korea averaged over 5 percent annual growth, and China over
8 percent annual average growth in manufacturing labor productivity. Stagnant
labor productivity growth implies that the
United States is failing to adopt technology fast enough and may be replacing manufacturing technology
with cheap labor, reducing the amount of goods being produced per worker. Even more troubling is that this
quarter’s labor productivity decline was concentrated in durable manufacturing, which contracted at a 3.3 percent annual rate in the first
quarter. Durable manufacturing has been the predominate force behind the steady U.S. recovery (72 percent
of jobs gained between 2010 and 2013 were in either automotive manufacturing or in metals). These goods are also more likely to be traded
internationally. Slacking productivity in these industries implies that the U.S. manufacturing jobs recovery is largely based on companies
substituting cheap labor for investment in automation and other new technologies. Most optimists look at the increasing use of advanced
technology and automation in U.S. factories as proof that the United States remains competitive in advanced industries. However, many other
nations adopted and implemented these technologies much faster than we did over the last few years. America’s
advantage in
advanced industries is becoming increasingly fragile, and we stand to lose out in these high-wage and
high-growth fields, such as additive manufacturing and advanced semiconductors, and not just in the low value-added industries we
mentally associate with offshoring. Without real productivity growth, the United States’ existing $83 billion trade deficit in advanced technology
goods could increase. Advocates have warned for years that the United States’ weakening commitment to public R&D spending was eventually
going to come home to roost.
Economists agree that the only way to achieve real, sustainable growth is
through technology. Unfortunately, investment in R&D by the federal government is declining.
Decreased technological progress will continue to slow the U.S. economy. Without labor productivity growth,
expect to see the United States’ trade deficit get even wider and for our manufacturing job growth numbers to dwindle. How can the United
States stave off this scenario and increase its manufacturing labor productivity? We must take real steps to achieve more than superficial, if
crowd-pleasing, job growth statistics. We
need actual growth in our ability to compete in the most advanced
industries.
16
1AC- Economy: Impact- Asia
B. Impacts:
1. Asian Instability: Stalled growth will unleash massive global war, failed
states, pandemics, and terrorism.
Green and Schrage ‘9 (Michael J Green is Senior Advisor and Japan Chair at the Center for Strategic
and International Studies (CSIS) and Associate Professor at Georgetown University. Steven P Schrage is
the CSIS Scholl Chair in International Business and a former senior official with the US Trade
Representative's Office, State Department and Ways & Means Committee, Asia Times, 2009
http://www.atimes.com/atimes/Asian_Economy/KC26Dk01.html)
Facing the worst economic crisis since the Great Depression, analysts at the World Bank and the US Central Intelligence Agency are
just
beginning to contemplate the ramifications for international stability if there is not a recovery in the next
year. For the most part, the focus has been on fragile states such as some in Eastern Europe. However, the Great Depression taught
us that a downward global economic spiral can even have jarring impacts on great powers. It is no mere
coincidence that the last great global economic downturn was followed by the most destructive war in
human history. In the 1930s, economic desperation helped fuel autocratic regimes and protectionism in a
downward economic-security death spiral that engulfed the world in conflict. This spiral was aided by
the preoccupation of the United States and other leading nations with economic troubles at home and
insufficient attention to working with other powers to maintain stability abroad. Today's challenges are different,
yet 1933's London Economic Conference, which failed to stop the drift toward deeper depression and world war, should be a cautionary tale for
leaders heading to next month's London Group of 20 (G-20) meeting. There is no question the US must urgently act to address banking issues
and to restart its economy. But the lessons of the past suggest that we will also have to keep an eye on those fragile threads in the international
system that could begin to unravel if the financial crisis is not reversed early in the Barack Obama administration and realize that economics
and security are intertwined in most of the critical challenges we face. A disillusioned rising power? Four areas in Asia merit particular attention,
although so far the current financial crisis has not changed Asia's fundamental strategic picture. China is not replacing the US as regional
hegemon, since the leadership in Beijing is too nervous about the political implications of the financial crisis at home to actually play a leading
role in solving it internationally. Predictions that the US will be brought to its knees because China is the leading holder of US debt often miss
key points. China's currency controls and full employment/export-oriented growth strategy give Beijing few choices other than buying US
Treasury bills or harming its own economy. Rather than creating new rules or institutions in international finance, or reorienting the Chinese
economy to generate greater long-term consumer demand at home, Chinese leaders are desperately clinging to the status quo (though Beijing
deserves credit for short-term efforts to stimulate economic growth). The
greater danger with China is not an eclipsing of
US leadership, but instead the kind of shift in strategic orientation that happened to Japan after the Great
Depression. Japan was arguably not a revisionist power before 1932 and sought instead to converge with the global economy through open
trade and adoption of the gold standard. The worldwide depression and protectionism of the 1930s devastated the newly exposed Japanese
economy and contributed directly to militaristic and autarkic policies in Asia as the Japanese people reacted against what counted for
globalization at the time. China today is similarly converging with the global economy, and many
experts believe China needs at
least 8% annual growth to sustain social stability. Realistic growth predictions for 2009 are closer to 5%. Veteran China hands
were watching closely when millions of migrant workers returned to work after the Lunar New Year holiday last month to find factories closed
and jobs gone. There were pockets of protests, but nationwide unrest seems unlikely this year, and Chinese leaders are working around the
clock to ensure that it does not happen next year either. However, the
economic slowdown has only just begun and
nobody is certain how it will impact the social contract in China between the ruling communist party and
the 1.3 billion Chinese who have come to see President Hu Jintao's call for "harmonious society" as inextricably linked to his promise of
"peaceful development". If the Japanese example is any precedent, a sustained economic slowdown has the potential to
open a dangerous path from economic nationalism to strategic revisionism in China too. Dangerous states It is
noteworthy that North Korea, Myanmar and Iran have all intensified their defiance in the wake of the financial crisis, which has distracted the
17
world's leading nations, limited their moral authority and sown potential discord. With Beijing worried about the potential impact of North
Korean belligerence or instability on Chinese internal stability, and leaders in Japan and South Korea under siege in parliament because of the
collapse of their stock markets, leaders in the North Korean capital of Pyongyang have grown increasingly boisterous about their country's
claims to great power status as a nuclear weapons state. The junta in Myanmar has chosen this moment to arrest hundreds of political
dissidents and thumb its nose at fellow members of the 10-country Association of Southeast Asian Nations. Iran continues its nuclear program
while exploiting differences between the US, UK and France (or the P-3 group) and China and Russia - differences that could become more
pronounced if economic friction with Beijing or Russia crowds out cooperation or if Western European governments grow nervous about
sanctions as a tool of policy. It is possible that the economic downturn will make these dangerous states more pliable because of falling fuel
prices (Iran) and greater need for foreign aid (North Korea and Myanmar), but that may depend on the extent that authoritarian leaders care
about the well-being of their people or face internal political pressures linked to the economy. So far, there is little evidence to suggest either
and much evidence to suggest these dangerous states see an opportunity to advance their asymmetrical advantages against the international
system. Challenges to the democratic model The trend in East Asia has been for developing economies to steadily embrace democracy and the
rule of law in order to sustain their national success. But to
thrive, new democracies also have to deliver basic economic
growth. The economic crisis has hit democracies hard, with Japanese Prime Minister Aso Taro's approval collapsing to single digits in the
polls and South Korea's Lee Myung-bak and Taiwan's Ma Ying Jeou doing only a little better (and the collapse in Taiwan's exports - particularly
to China - is sure to undermine Ma's argument that a more accommodating stance toward Beijing will bring economic benefits to Taiwan).
Thailand's new coalition government has an uncertain future after two years of post-coup drift and now economic crisis. The
string of old
and new democracies in East Asia has helped to anchor US relations with China and to maintain what
former secretary of state Condoleezza Rice once called a "balance of power that favors freedom". A reversal of the
democratic expansion of the past two decades would not only impact the global balance of power but
also increase the potential number of failed states, with all the attendant risk they bring from harboring
terrorists to incubating pandemic diseases and trafficking in persons. It would also undermine the demonstration
effect of liberal norms we are urging China to embrace at home. Protectionism The collapse of financial markets in 1929 was
compounded by protectionist measures such as the Smoot-Hawley tariff act in 1932. Suddenly, the economic collapse became a
zero-sum race for autarkic trading blocs that became a key cause of war. Today, the globalization of finance, services and manufacturing
networks and the World Trade Organization (WTO) make such a rapid move to trading blocs unlikely. However, protectionism
could
still unravel the international system through other guises. Already, new spending packages around the world are
providing support for certain industries that might be perceived by foreign competitors as unfair trade measures, potentially creating a "SmootHawley 2.0" stimulus effect as governments race to prop up industries. "Buy American" conditionality in the US economic stimulus package
earlier this year was watered down somewhat by the Obama administration, but it set a tempting precedent for other countries to put up
barriers to close markets.
18
1AC- Economy: Impact- War
2. Failed Global recovery = War: 5 Warrants: Power transitions,
miscalculation, poisoned inter-dependence, civil conflict, and diversionary
theory.
Royal ‘10 (Director of CTR Jedediah, Director of Cooperative Threat Reduction – U.S. Department of Defense, “Economic Integration,
Economic Signaling and the Problem of Economic Crises”, Economics of War and Peace: Economic, Legal and Political Perspectives, Ed.
Goldsmith and Brauer, p. 213-215)
Less intuitive is how periods of economic decline may increase the likelihood of external conflict. Political science
literature has contributed a moderate degree of attention to the impact of economic decline and the security and defence behaviour of
interdependent states. Research in this vein has been considered at systemic, dyadic and national levels. Several notable contributions follow.
First, on the systemic level, Pollins (2008) advances Modelski and Thompson's (1996) work on leadership cycle theory, finding that rhythms
in the global economy are associated with the rise and fall of a pre-eminent power and the often bloody
transition from one pre-eminent leader to the next. As such, exogenous shocks such as economic crises could usher in a
redistribution of relative power (see also Gilpin. 1981) that leads to uncertainty about power balances,
increasing the risk of miscalculation (Feaver, 1995). Alternatively, even a relatively certain redistribution of power could lead to a
permissive environment for conflict as a rising power may seek to challenge a declining power (Werner.
1999). Separately, Pollins (1996) also shows that global economic cycles combined with parallel leadership cycles impact the likelihood of
conflict among major, medium and small powers, although he suggests that the causes and connections between global economic conditions
and security conditions remain unknown. Second, on a dyadic level, Copeland's (1996, 2000) theory of trade expectations suggests that 'future
expectation of trade' is a significant variable in understanding economic conditions and security behaviour of states. He argues that
interdependent states are likely to gain pacific benefits from trade so long as they have an optimistic
view of future trade relations. However, if the expectations of future trade decline, particularly for
difficult to replace items such as energy resources, the likelihood for conflict increases, as states will be inclined
to use force to gain access to those resources. Crises could potentially be the trigger for decreased trade expectations either on its own or
because it triggers protectionist moves by interdependent states.4 Third, others have considered the link between economic decline and
external armed conflict at a national level. Blomberg and Hess (2002) find a strong correlation between internal conflict and external conflict,
particularly during periods of economic downturn. They write: The linkages between internal and external conflict and prosperity are strong
and mutually reinforcing. Economic
conflict tends to spawn internal conflict, which in turn returns the favour.
Moreover, the presence of a recession tends to amplify the extent to which international and external
conflicts self-reinforce each other. (Blomberg & Hess, 2002. p. 89) Economic decline has also been linked with an increase in the
likelihood of terrorism (Blomberg, Hess, & Weerapana, 2004), which has the capacity to spill across borders and lead to external tensions.
Furthermore, crises generally reduce the popularity of a sitting government. "Diversionary
theory" suggests that, when facing
unpopularity arising from economic decline, sitting governments have increased incentives to fabricate
external military conflicts to create a 'rally around the flag' effect. Wang (1996), DeRouen (1995). and Blomberg, Hess,
and Thacker (2006) find supporting evidence showing that economic decline and use of force are at least indirectly correlated. Gelpi (1997),
Miller (1999), and Kisangani and Pickering (2009) suggest that the tendency towards diversionary tactics are greater for democratic states than
autocratic states, due to the fact that democratic leaders are generally more susceptible to being removed from office due to lack of domestic
support. DeRouen (2000) has provided evidence showing that periods of weak economic performance in the United States, and thus weak
Presidential popularity, are statistically linked to an increase in the use of force. In summary, recent economic scholarship positively correlates
economic integration with an increase in the frequency of economic crises, whereas political science scholarship links economic decline with
external conflict at systemic, dyadic and national levels.5 This implied connection between integration, crises and armed conflict has not
featured prominently in the economic-security debate and deserves more attention.
19
1AC- Economy: Impact- Innovation
3. Innovation is vital to global survival.
Baker 2k –Brent Barker, electrical engineer, and manager of corporate communications for the Electric Power Research Institute and
former industrial economist and staff author at SRI International and as a commercial research analyst at USX Corporation, “Technology and the
Quest for Sustainability.” EPRI Journal, Summer, INFOTRAC
Sustainability has been the subject of much discussion and a steady stream of policy forums since the World Commission
on Environment and Development, headed by Dr. Gro Brundtland, put it on the world stage in 1987. The Brundtland Commission defined
sustainable development as growth that meets the needs of the present generation without compromising the ability of future generations to
meet their needs. Assuch, sustainability carries with it the distinct feeling of a modern problem. But it is not. We have been on a seemingly
unsustainable course for hundreds of years, but the rules, stakes, and speed of the game keep changing, in large part because of our ability to
use technology to extend limits and to magnify human capabilities. As long as the population continues to consume a finite store of resources,
we must continue to change our course or fail. If,
with the global population approaching 9-10 billion people by
midcentury, we were to lock in current technologies and development patterns, we would likely find
ourselves heading toward environmental disaster or worse. Our best hope--perhaps our only hope--is to evolve
rapidly enough, using our ingenuity, our technology, and our growing ethical framework of inclusiveness and respect for the
diversity of life, to stay ahead of the proverbial wolf. Despite the environmental pessimism of the current age, there are a handful of signs that
suggest we are struggling in fits and starts in the right direction, possibly even gaining more ground than we are losing.
Farm
productivity is one of the most significant of the great reversals in human fortune that have occurred in recent
times, reversals that offer both hope and strategic guidance. Largely as a result of crop yields growing at 1-2% per year, the millenniaold pattern
of clearing forests and grassland for farms and pastures has begun to be reversed in some regions of the world. According to one of the world's
leading scholars on technological change, Arnulf Grubler of the International Institute for Applied Systems Analysis, some 18 million hectares
(45 million acres) of cropland in Europe and North America have been reconverted to forest and grassland between 1950 and 2000, while
agricultural output in those regions has continued to grow. Great reversals are also beginning to occur in
areas as diverse as
population, resource utilization, energy, and transportation. Fertility rates continue to drop below the replacement level
(2.1 children per woman) in affluent nations. First evident in France more than a century ago, the preference for smaller families is spreading
throughout the world as economic development expands. As a result, roughly 90% of the population growth in the next 50 years will occur in
today'spoorest nations. Overall, we are looking at a new demographic dynamic in which population is exploding in some parts of the world
while imploding in others. Nevertheless, it is significant that year after year the United Nations continues to crank down its projection of global
population in the twenty-first century, suggesting greater certainty that the population is leveling off. Although
the consumption of
resources continues to grow with population and economic prosperity in all parts of the world, there are
some intriguing counter-trends. Technology continues to expands [sic] the menu of material resources-for example, alloys, composites, and ceramics--as well as to increase the efficiency with which we use them. Both trends help keep
resource depletion at bay Moreover, usage patterns are now rapidly shifting, at least in the developed nations, toward lighter
materials (aluminum, plastics, paper) and toward the recycling of heavier materials (steel, copper, zinc) and of manufactured components.
Perhaps most important for the future, however, is the trend toward the "immaterial." The information age is rapidly knitting together a new
economy based on immaterial, knowledge-based assets, electronic commerce, and virtual transportation--an economy that is growing much
faster than the old economy. We can barely glimpse the networkedworld of the future, but we can assume it will be much less dependent on
natural resources. The reversal in energy use is more clearcut. Energy is in the middle of a 300-year trend away from fossil fuels.
After more than 100,000 years of wood use, the global energy system began in the nineteenthcentury to move toward progressively cleaner,
less carbon-intensive fuels (shifting from wood to coal to oil to gas). In fact, the
decarbonization of the global energy system
has been systematically proceeding at an average rate of 0.3% per year for the last 150 years, whilethe economic productivity of
energy use has been improving at a rateof about 1% per year. The combined result (1.3% per year) is a healthy rate of reduction in the carbon
used (and emitted) in producing a dollar of goods and services around the world. Even though the energyproductivity improvements have thus
far been eclipsed by the growth in energy consumption (as more people engage in more economic activity), the trend is telling. The eventual
result may be the same as in agriculture, with productivity improvements overtaking aggreg ate demand. In terms of decarbonizing
the
energy system, the transition is likely to be complete sometime in the next 75-150 years, depending on
how fast we push the innovation process toward a clean, electricity- and hydrogen-based system. We would eventually
get there even without a rigorous push, but as we will see later, the urgency of the climatechange issue may force us to speed up the historical
20
trend by a factor of 2 or 3. The power of technology These
historical trends in agriculture, land use, resource
consumption, and energy use point to some profound opportunities for the future. There are at least four major
ways in which technology has great potential for helping us achieve a sustainable balance in the twenty-first
century The first area of opportunity for technology is in the acceleration of productivity growth. In agriculture, for
example, corn yields inthe world today average only about 4 tons per hectare, while the United States averages 7 tons per hectare and the best
Iowa farmer can get 17 tons. Simply bringing the world as a whole up to today's best practices in the United States would boost farm
productivity to unprecedented heights, even without considering what the biological and genetic revolutions may hold in store for agriculture
in the next century As for the overall productivity growth rate in industry and business, we are finally starting to register an increase after
nearly 30 years of subpar performance at around 1% growth per year. Computerization appears to be taking hold in the economy in new and
fundamental ways, not just in speeding up traditional practices but in altering the economic structure itself. One historical analogy would be
the introduction of electric unit drives just after World War I, setting in motion a complete reorganization of the manufacturing Floor and
leading to a surge in industrial productivity during the 1920s. In
the twenty-first century, industrial processes will be
revolutionized by new electrotechnologies, including lasers, plasmas, microwaves, and electron beams
for materials processing, as well as electrochemical synthesis and electroseparation for chemical processing. Manufacturing will
be revolutionized by a host of emerging technology platforms--for example, nanotechnology,
biotechnology, biomimetics, high-temperature superconductivity, and network technology including the
combining of advanced sensors with information technology to create adaptive, intelligent systems and processes. Future industrial facilities
using advanced network technologies will be operated in new ways to simultaneously optimize productivity energy use, materials consumption,
and plant emissions. Optimization will extend beyond the immediate facility to webs of facilities supporting industrial and urban ecology with
the waste of one stream becoming the feedstock of the next. In the aggregate, the penetration of all the emerging tech nologiesinto the global
economy should make it possible to sustain industrial productivity growth rates above 2% per year for many decades. The
same
technology platforms will be used to improve the efficiency of land, energy and water use, For example,
distributed sensors and controls that enable precision farming can improve crop yields and reduce land
and water use. And doubling or even tripling global energy efficiency in the next century is well within
our means. Given the inefficiencies that now exist at every stage in the process--from mining and drilling for fuel through the use of energy
in automobiles, appliances, and processes--the overall efficiency of the energy chain is only about 5%. From a social standpoint,
accelerating productivity is not an option but rather an imperative for the future. It is necessary in order to
provide the wealth for environmental sustainability, to support anaging population in the industrialized world, and to
provide an economic ladder for developing nations. The second area of opportunity for technology lies in its potential
to help stabilize global population at 10-12 billion sometime in the twenty-first century, possibly as early as 2075. The key is
economics. Global communications, from television to movies to the Internet,have brought an image of the
comfortable life of the developed worldinto the homes of the poorest people, firing their own aspirations for a
better quality of life, either through economic development in their own country or through emigration to other countries. If we in the
developed world can make the basic tools of prosperity--infrastructure, health care, education, and law-more accessible and affordable, recent history suggests that the cultural drivers for producing large families will
be tempered, relatively quickly and without coercion. But the task is enormous. The physical prerequisites for prosperity in the
global economy are electricity and communications. Today, there are more than 2 billion people living without electricity, or commercial energy
in any form, in the very countries where some 5 billion people will be added in the next 50 years. If for no other reason than our enlightened
self-interest, we should strive for universal access to electricity, communications, and educational opportunity. We have little choice, because
the fate of the developed world is inextricably bound up in the economic and demographic fate of the developingworld. A third, related
opportunity for technology is in decoupling population growth from land use and, more broadly, decoupling
economic growth from natural resource consumption through recycling, end-use efficiency, and industrial
ecology. Decoupling population from land use is well under way. According to Grubler, from 1700 to 1850 nearly 2 hectares of land (5 acres)
were needed to support every child born in North America, while in the more crowded and cultivated regions of Europe and Asia only 0.5
hectare (1.2 acres) and 0.2 hectare (0.5 acre) were needed, respectively. During the past century, the amount of land needed per additional
child has been dropping in all areas of the world, with Europe and North America experiencing the fastest decreases. Both crossed the "zero
threshold" in the past few decades, meaningthat no additional land is needed to support additional children andthat land requirements will
continue to decrease in the future. One can postulate that the pattern of returning land to nature will continue to spread throughout the world,
eventually stemming and then reversing the current onslaught on the great rain forests. Time
is critical if vast tracts are to be
21
saved from being laid bare, and success will largely depend on how rapidly economic opportunities
expand for those now trapped in subsistence and frontier farming. In concept, the potential for returning land to
nature is enormous. Futurist and scholar Jesse Ausubel of the Rockefeller University calculates that if farmers could lift average grain yields
around the world just to the level of today's average U.S. corn grower, one-half of current global cropland--an area the size of the Amazon
basin--could be spared. If agriculture is a leading indicator, then the continuous drive to produce more from less will prevail in other parts of
the economy Certainly with shrinking agricultural land requirements, water distribution and use around the world can be greatly altered, since
nearly two-thirds of water now goes for irrigation. Overall,
the technologies of the future will, in the words of Ausubel, be
"cleaner, leaner, lighter, and drier"--that is, more efficient and less wasteful of materials and water. They will be much more tightly
integrated through microprocessor-based control and will therefore use human and natural resources much more efficiently and productively.
Energy intensity, land intensity, and water intensity (and, to a lesser extent, materials intensity) for both manufacturing and
agriculture are already heading downward. Only in agriculture are they falling fast enough to offset the surge in population, but,
optimistically, advances in science and technology should accelerate the downward trends in other
sectors, helping to decouple economic development fromenvironmental impact in the coming century. One positive sign is thefact that
recycling rates in North America are now approaching 65% for steel, lead, and copper and 30% for aluminum and paper. A second sign is that
economic output is shifting away from resource-intensive products toward knowledge-based, immaterial goods and services. As a result,
although the U.S. gross domestic product (GDP) increased 200-fold (in real dollars) in the twentieth century, the physical weight of our annual
output remains the same as it was in 1900. If anything,this trend will be accelerating. As Kevin Kelly, the editor of Wiredmagazine, noted, "The
creations most in demand from the United States [as exports] have lost 50% of their physical weight per dollar of value in only six years....
Within a generation, two at most, the number of people working in honest-to-goodness manufacturing jobs will beno more than the number of
farmers on the land--less than a few percent. Far more than we realize, the network economy is pulling us all in." Even pollution shows clear
signs of being decoupled from population and economic growth. Economist Paul Portney notes that, with the exception of greenhouse gases,
"in the OECD [Organization for Economic Cooperation and Development] countries, the favorable experience [with pollution control] has been
a triumph of technology That is, the ratio of pollution per unit of GDP has fallen fast enough in the developed world to offset the increase in
both GDP per capita and the growing number of 'capitas' themselves." The fourth opportunity
for science and technology
stems from their enormous potential to unlock resources not now available, to reduce human
limitations, to create new options for policymakers and businesspeople alike, and to give us new levels of insight into
future challenges. Technically resources have little value if we cannot unlock them for practical use. With technology, we are
able to bring dormant resources to life. For example, it was only with the development of anelectrolytic process late in the
nineteenth century that aluminum--the most abundant metal on earth--became commercially available and useful. Chemistry unlocked
hydrocarbons. And engineering allowed us to extract and put to diverse use untapped petroleum and gas fields. Over the course of history,
technology has made the inaccessible accessible, and resource depletion has been more of a catalyst for change than a longstanding problem.
Technology provides us with last-ditch methods (what economists would call substitutions) that allow us to circumvent
or leapfrog over crises of our own making. Agricultural technology solved the food crisis of the first half of the nineteenth century.
The English "steam crisis" of the 1860s, triggered by the rapid rise of coal-burning steam engines and locomotives, was averted by mechanized
mining and the discovery and use of petroleum. The U.S. "timber crisis" that Teddy Roosevelt publicly worried about was circumvented by the
use of chemicals that enabled a billion or so railroad ties to last for decades instead of years. The great "manure crisis" of the same era was
solved by the automobile, which in a few decades replaced some 25 million horses and freed up 40 million hectares (100 million acres) of
farmland,not to mention improving the sanitation and smell of inner cities. Oil discoveries in Texas and then in the Middle East pushed the
pending oil crisis of the 1920s into the future. And the energy cr isis of the 1970s stimulated the development of new sensing and drilling
technology, sparked the advance of non--fossil fuel alternatives, and deepened the penetration of electricity with its fuel flexibility into the
global economy Thanks to underground imaging technology, today's known gas resources are an order of magnitude greater than the resources
known 20 years ago, and new reserves continue to be discovered. Technology has also greatly extended human limits. It has
given each of us a productive capability greater than that of 150 workers in 1800, for example, and has conveniently put the power of hundreds
of horses in our garages. In recent decades, it has extended our voice and our reach, allowing us to easily send our words, ideas, images, and
money around the world at the speed of light. But
global sustainability is not inevitable. In spite of the tremendous
promise that technology holds for a sustainable future, there is the potential for all of this to backfire
before the job can be done. There are disturbing indications that people sometimes turn in fear and anger on technologies,
industries, and institutions that openlyfoster an ever-faster pace of change. The current opposition to nuclear power genetically altered food,
the globalization of the economy and the spread of American culture should give us pause. Technology has always presented a two-edged
sword, serving as both cause and effect, solving one problem while creating another that was unintended and often unforeseen. We solved the
manure crisis, but automotive smog,congestion, and urban sprawl took its place. We cleaned and transformed the cities with all-electric
buildings rising thousands of feet into the sky. But while urban pollution was thereby dramatically reduced, a portion of the pollution was
shifted to someone else's sky. Breaking limits "Limits to growth" was a popular theme in the 1970s, and a best-selling book of that name
predicted dire consequences for the human race by the end of the century. In fact, we have done much better than those predictions, largely
22
because of a factor the book missed--the potential of new technology to break limits. Repeatedly,
human societies have
approached seemingly insurmountable barriers only to find the means and tools to break through. This
ability has now become a source of optimism, an article of faith, in many parts of the world. Today's
perceived limits, however, look and feel different. They are global in nature, multicultural, and larger in scale and complexity than
ever before. Nearly 2 billion people in the world are without adequate sanitation, and nearly as many are without access
to clean drinking water. AIDS is spreading rapidly in the regions of the world least able to fight it. Atmospheric
concentrations of greenhouse gases are more than 30% greater than preindustrial levels and are
climbing steadily. Petroleum reserves, expected to be tapped by over a billion automobiles worldwide by 2015, may last only
another 50-100 years.And without careful preservation efforts, the biodiversity of the planet could
become as threatened in this coming century as it was at the end of the last ice age, when more than 70% of the species of large
mammals and other vertebrates in North America disappeared (along with 29% in Europe and 86% in Australia). All these perceived
limits require innovation of a scope and intensity surpassing human kind's current commitment. The list of
real-world problems that could thwart global sustainability is long and sobering. It includes war, disease, famine, political and
religious turmoil, despotism, entrenched poverty, illiteracy, resource depletion, and environmental
degradation. Technology can help resolve some of these issues--poverty and disease, resource depletion,
and environmental impact, for example--but it offers little recourse for the passions and politics that divide the world. The likelihood
is that we will not catch up and overtake the moving target of global sustainability in the coming century, but given the prospects
fortechnology, which have never been brighter, we may come surprisinglyclose. We
should put our technology to work,
striving to lift more than 5 billion people out of poverty while preventing irreversible damage to the
biosphere and irreversible loss of the earth's natural resources. We cannot see the future of technology any more
clearly than our forebears did--and for much the same reason. We are approaching the threshold of profound change,
moving at great speed across a wide spectrum of technology, ranging today from the Internet to the Human Genome project. Technology in the
twenty-first century will be turning toward biological and ecological analogs, toward microminiature machines, toward the construction of
materials atom by atom, and toward the dispersion of microprocessor intelligence into everyday objects subsequently linked into neural
networks. Computing power continues to double every 18 months, as postulated in Moore's law, promising to enableus to create much more
powerful tools for everyday tasks, optimize business services and processes along new lines, understand complex natural phenomena like the
weather and climate, and design technical systems that are self-diagnostic, self-healing, and self-learning. The networked, digital society of the
future should be capable o f exponential progress more in tune with biological models of growth than with the incremental progress of
industrial societies. If history tells us anything, it is that in the long term we are much more likely to underestimate technology than to
overestimate it. We are not unlike the excited crowds that in 1909 tried to imagine the future of flight as they watched Wilbur Wright loop his
biplane twice around the Statue of Liberty and head back to Manhattan at the record-breaking speed of 30 miles per hour. As wild as one's
imaginationand enthusiasm might have been, it would have been inconceivable that exactly 60 years later humans would fly to the moon and
back. Electricity's unique role Electricity
lies at the heart of the global quest for sustainability for several reasons.
It is the prerequisite for the networked world of the future. It will be the enabling foundation of new digital technology
and the vehicle on which most future productivity gains in industry, business, and commerce will depend. And to the surprise of many, it will
remain the best pathway to resource efficiency, quality of life, and pollution control. In fact, the National Academy of Engineering just voted the
"vast network of electrification" the single greatest engineering achievement of the twentieth century by virtue of its ability to improve
people's quality of life. It came out ahead of the automobile, the airplane, the computer, and even health care in its impact on society. The
electricity grids of North America, Europe, and Japan are said to be the most complex machines ever built. Although they are not yet full
networks--that is, not every node is connected to every other node--these networks have been sufficiently interconnected to become the
central enabling technology of the global economy. They will have to be even more interconnected and complex to keep pace with the
microprocessors and digital networks they power. In the developed world, electricity has become almost a transparent technology lost in the
excitement surrounding its latest progeny--electronics, computers, the Internet, and so forth. Still, its role should be as profound in this century
as it was in the last. "How and in what form global electrification goes forward in the next 50 years will determine, as much as anything, how we
resolve the global 'trilemma' posed by population, poverty and pollution," says Kurt Yeager, president and CEO of EPRI. "This trilemma is
destined to become a defining issue of the twenty-first century" Chauncey Starr, EPRI's founder, has captured the strong historicalcorrelation
between access to electricity economic prosperity and social choices. A large majority of the world's population is now trapped at a low
economic level, where the focus of everyday life is on survival and on acquiring the basics now taken for granted in developednations. As Starr
shows, only after electricity consumption reaches a threshold of approximately 1000 kWh per capita do people turn theirattention from the
basics of immediate survival to the level of "amenities," including education, the environment, and intergenerational investment. Given the
chicken-and-egg nature of the process of socialadvancement, it is not possible to point to electricity as the initial spark, but it is fair to say that
economic development does not happen today without electricity. Electricity has been extended to more than 1.3 billion people overthe past
25 years, with leveraged economic impact. In South Africa, for example, 10 to 20 new businesses are started for every 100 homes that are
23
electrified. Electricity frees up human labor--reducing the time people spend in such marginal daily tasks as carrying water and wood--and
provides light in the evening for reading and studying. These simple basics can become the stepping stones to a better life and a doorway to the
global economy. Because electricity can be effectively produced from a wide variety of local energy sources and because it is so precise at the
point of use, it is the ideal energy carrier for economic and social development. Distributed electricity generation can be used to achieve basic
rural electrification goals in the developing world, thereby helping to counteract the trend toward massiveurbanization. People in rural areas
and villages need to have accessto the opportunities and jobs that are now attainable only by migrating to large cities. Electrification should
also help with efforts to improve deteriorating urban air quality in the growing megacities of the world. Mortality from respiratory infections
may be as much as five times higher in developing countries than in developed countries. The health costs can be debilitating; it is estimated,
for example, that the total health cost of air emissions in Cairo alone now exceeds $1 billion per year. How global electrification proceeds--on a
large or a small scale, with clean or dirty technology--will influence the planet socially economically and environmentally for centuries.
Ultimately our success or failure in this endeavor will bear heavily on whether we can effectively handle the issues of the habitability and
biodiversity of the planet. Ironically, electricity may also become the focal point for growing animosity in the coming century, for the simple
reason that it is taking on more and more responsibility for society's energy-related pollution. Electricity accounted for only about 25% of the
world's energy consumption in 1970. Today in the developed countries, its share of energy consumption is nearly 40%, and by 2050 that figure
may reach60-70%. If transportation is fully electrified through fuel cells, hybrids, and the like, electricity's energy share could climb even higher.
This growth accentuates the need to ensure that future electricity generation and use are as clean and efficient as possible and thatbest
practices and technologies are available to developing countries as well as affluent ones. Fortunately for the world, electricity has the greatest
potential of all the energy forms to deliver in the area of environmental stewardship. Roadmap's call to action The Electricity Technology
Roadmap Initiative, which was launched by EPRI in 1998, began by bringing representatives of more than 150 diverse organizations together in
a series of workshops and meetings to explore ways to enhance the future value of electricity to society.They staked out some ambitious
destinations through time, leading tothe ultimate destination of "managing global sustainability." They also established some specific goals to
ensure that the tools will be in hand by 2025 to reach various sustainability targets, including universal global electrification, by midcentury.
Among these goals are the acceleration of electricity-based innovation and R&D and the benchmarking of our progress toward sustainability.
Universal global electrification means bringing everyone in the world to at least the "amenities" level defined by Starr. At this level, it becomes
more likely that the rich and poor nations will find common ground for pursuing sustainability policies. The roadmap stakeholders are calling for
a bare minimum of 1000 kWh per person per year to be available by 2050. This would raise the average in today's developing countries to
around 3000 kWh per person per year in 2050, just above the level in the United States a century earlier, around 1950. Moreover, projections
suggest that it will be possible to reduce the energy intensity of economic growth by at least 50% over the next 50 years through universal
electrification, with about half the reduction resulting from end-use efficiency improvements. Consequently, the 3000 kWh of 2050 will go
much further in powering applications--lighting, space conditioning, industrial processes, computing, communications, and the like--than an
equivalent amount of electric energy used in the United States in 1950. Already, for example, the manufacturing and widespread application of
compact fluorescent lightbulbs has become a priority in China for reasons of both energy efficiency and export potential. Even with the large
efficiency improvements that are anticipated in electricity generation and end use, building enough capacity to supply 9-10 billion people with
power will be an enormous challenge. Total global generating capacity requirements for 2050 could reach a daunting 10,000 GW--the
equivalent of bringing on-line a 1000-MW power plant somewhere in the world every two days for the next 50 years. This
is a tall order,
and achieving it affordably and with minimal environmental impacts will require an unusual degree of
dedicated R&D, supported through public and private collaboration, to accelerate the current pace of technological
development. According to the roadmap stakeholders, reaching the destinations that they have defined calls for at least an additional $4
billion peryear in electricity-related R&D by the United States alone. One of the key destinations, resolution of the energy-environment conflict,
would in itself require an additional $2 billion per year in U.S. R&D over the next 10 years to speed up the development of clean power
generation. This is more than double the nation's current level of funding in this area from both the public and private sectors. The
rate of
innovation is especially critical to sustainability. The roadmap participants have concluded that a "2% solution" is neededto
support a sustainable future. By this, they mean that productivity improvements in a range of areas--including global
industrial processes, energy intensity, resource utilization, agricultural yield, emissions reduction, and
water consumption--have to occur at a pace of 2% or more per year over the next century. If the advances are
distributed on a global basis, this pace should be sufficient to keep the world ahead of growing social and
environmental threats. It will also generate the global wealth necessary to progressively eliminate the root cause of these threats and
will provide the means to cope with theinevitable surprises that will arise. For example, a 2% annual increase in global electricity supply, if
made broadly available in developing countries, would meet the goal of providing 1000 kWh per year toevery person in the world in 2050. This
means extending the benefitsof electricity to 100 million new users every year. Maintaining
a 2% pace in productivity
improvements for a century will be formidable. It is in line with the cumulative advancement in the
United States during the twentieth century, but at least twice theworld average over that period. The disparity has been
particularly great in the past 25 years, as population growth has outstripped economic development in many parts of the world. The result has
been massive borrowing to maintain or enhance short-term standards of living. Staying ahead of population-related challenges is now in the
enlightened self-interest of all the world's peoples, and the 2% solution offers a benchmark for success. Sustaining efficiency gains of 2% per
24
year throughout the twenty-first century would allow essential global economic development to continue while sparing the planet. This
pace, for example, should help stabilize world population (to the extent that wealth is a primary
determinant of population growth), limit atmospheric levels of greenhouse gases to below agreed-upon
strat egic limits, provide sufficient food for the bulk of the world's people (as well as the wherewithal to
buy it), and return significant amounts of land and water to their natural states. Roadmap participants
envision technology and the spread of liberal capitalism as powerful agents for the 2% solution in that
they can stimulate global development and foster worldwide participation in market economies. However,
the participants have also expressed some concern and caution about unbridled globalization overrunning local cultures and societies and
creating instability, unrest, and conflict. Atits worst, globalization could lock weaker nations into commodity-production dependencies, leading
to a survival-of-the-fittest global economy in which the rich get richer and most of the poor stay poor. Establishing greater dialogue and
cooperation among developed and developing nations is therefore considered critical to ensuring that globalization delivers on its promise to
be a vehicle of worldwide progress that honors the diversity of nations and peoples. Targets of sustainability There is no single measure of
sustainability; rather, it will require continued progress in a wide variety of areas that reflect the growing efficiency of resource utilization,
broad improvements in the quality of life for today's impoverished people, and acceleration of the historical shift away from resource-intensive
economic activity. The roadmap's sustainability R&D targets provide a first-order approximation of what will be required. In many cases, the
targets representa significant stretch beyond today's levels, but they are all technologically achievable. The roadmap sets an optimistic course,
certain that with
accelerated R&D and a much stronger technological foundation in hand by 2025, the
world could be well on a path to economic and environmental sustainability by midcentury. The goals for
sustainability are simply too far-reaching to be achieved solely through governmental directives or policy. Rather, they will be reached
most readilyvia a healthy, robust global economy in which accelerated technological innovation in the private sector is
strongly encouraged and supported by public policy. The challenges of bringing the world to a state of economic and
environmental sustainability in the coming century are immense but not insurmountable. Technology is on the threshold of profound change,
quite likely to be broader, faster, and more dramatic in its impact than that which we experienced in the twentieth century. Fortunately, the
impact appears to be heading in the right direction. Much of
the leading-edge technology is environmentally friendly
and, from today's vantage point, is likely to lead to a global economy that is cleaner, leaner, lighter, and
drier; many times more efficient, productive, and abundant; and altogether less invasive and less
destructive of the natural world. History teaches us that technology can be a liberating force for
humanity, allowing us to break through our own self-made limits as well as those posed by the natural
world. The next steps will be to extend the benefits of innovation to the billions of people without access and, in the words of Jesse Ausubel,
to begin "liberating the environment itself." This entails meeting our needs with far fewer resources by developing a "hydrogen economy,
landless agriculture, and industrial ecosystems in which waste virtually disappears....and by broadening our notions of democracy, as well as
our view of the ethical standing of trees, owls, and mountains." In many ways, the material abundance and extended human capabilities
generated through hundreds of years of technology development have led us to a new understanding and heightened respect for the
underlying "technologies of life." Offering four billion years of experience, nature will become one of our best teachers in the new century; we
are likely to see new tech nology progressively taking on the character and attributes of living systems. Technology may even begin to
disappear into the landscape as microminiaturization and biological design ensue. Still, though
technology is heading in the right
direction, what remains principally in question is whether the pace of innovation is adequate to stay
ahead of the curve of global problems and whether newadvances in technology can be quickly brought
down in cost and readily distributed throughout the world. Can we achieve the 2% solution of progressive improvement
in economic productivity, land and water use, recycling, emissions reduction, and agricultural yield, year afteryear, decade after decade, in
nation after nation? It's a formidable challenge, but with better tools we just might be able to pull it off, If so, the key to success will not be
found in one small corner ofthe world. The
challenge will be met by making the basic building blocks of innovation-education, R&D, infrastructure, and law--available in full measure to future generations everywhere in
the world. Thatfuture begins now.
25
1AC- PLAN
The United States Federal Government should restrict domestic surveillance by
prohibiting the NSA from gathering data from domestic servers under section 702 of
the USA Patriot Act.
26
1AC- Solvency: Signal Solves Credibility
Reform of section 702 is the crucial prerequisite for data credibility. The plan sends a
signal that domestic surveillance won’t compromise data infrastructure.
Jonah Force Hill ‘14 (technology and international affairs consultant based in San Francisco and
a Fellow of the Global Governance Futures program, “THE GROWTH OF DATA
LOCALIZATION POST-SNOWDEN: ANALYSIS AND RECOMMENDATIONS FOR U.S.
POLICYMAKERS AND BUSINESS LEADERS”)
Reversing this trend presents a substantial challenge for American companies and the American government. I
have offered, below, specific recommendations for both groups to be considered. In addition, however, both technology firms and the U.S.
government will need to focus significant energy and resources (diplomatic and financial) to make the
case against localization. As a general approach (as distinct from specific recommendations), both should work to correct pervasive
misunderstandings about the benefits and drawbacks of data localization among policymakers, industry groups, civil liberty organizations, and
other key stakeholders in nations considering such policies. They should forthrightly acknowledge the tremendous harm caused by the conduct of
the NSA and by the companies that facilitated that conduct, and seek to rebuild, to the extent possible, global trust in the reliability of U.S.
technology firms. In so doing, both are well advised to recognize the ambitions of the many interest groups advocating localization, and without
compromising fundamental business or state interests, work to find a means to assist those groups in the realization of those ambitions.
Recommendations for the U.S. Government 1. Reform U.S. intelligence collection law and processes in line with the President’s Review Group
on Intelligence and Communications Technologies120 The
primary justification raised in favor of data
localization policies is the need to protect citizens and companies from government
surveillance of the like orchestrated by the NSA. While the U.S. government should not compromise
what it perceives as essential national security objectives in the face of threats to American businesses (especially in light of the hypocrisy
involved in some of those threats), it should nevertheless seriously
address the concerns of the international
community. Specifically, the U.S. can start by adopting some of the important
recommendations of the President Review Group on Communications and Technologies, in
particular, “Chapter IV: Reforming Foreign Intelligence Surveillance Directed at Non-United States Person,” recommendations 12-15,
focusing on reforming section 702 of the Foreign Intelligence Surveillance Act, such as
applying the 1974 Privacy Act to nonU.S. persons. These are serious recommendations, and
their implementation ought to go a long way towards reducing (though surely not eliminating)
international concerns over the surveillance policies of the United States. Implementation
will demonstrate a willingness on the part of the U.S. government to respect global opinion
and to impose limits on the reach of its intelligence agencies.
27
1AC- Solvency: Restrict 702
Plan is the MOST EFFECTIVE action possible to restore confidence.
Laura K. Donohue ’15 (Georgetown University Law Center, “High Technology, Consumer Privacy, and
U.S. National Security,” http://scholarship.law.georgetown.edu/facpub/1457
)
IV. STEPS REQUIRED TO REDRESS THE CURRENT SITUATION Numerous steps
could be taken by Congress to address the
situation in which U.S. industry currently finds itself. The most effective and influential decision that
legislators could take would be to curb the NSA’s authorities under the Foreign Intelligence Surveillance
Act. This action has two components: first, ending the telephony metadata collection program and,
second, restricting the use of to/from, or about collection under upstream interceptions. Both
programs would further benefit from greater transparency, to make it clear that their aim is to prevent
foreign aggression and to prevent threats to U.S. national security—not to engage in the interception of
trade secrets or to build dossiers on other countries’ populations. The second most effective change that could be
undertaken would be to introduce stricter privacy controls on U.S. companies, in the process bringing the United States into closer line with the
principles that dominate in the EU. The two entities are not as far apart as the dialogue might have one assume, and so changes required in this
sphere would be minimal.
Together, these two alterations— curbing the NSA surveillance programs and
providing increased consumer protections for privacy—would allow U.S. industry to argue changed
circumstances to allow companies to again become competitive for contracts and markets to which they
seek access. A third alteration that would make a substantial difference over the longer term relates to the national security infrastructure.
The current failure of the United States to integrate economic concerns creates a vulnerability for the country in terms of the breadth and
depth of programs subsequently adopted. New thought concomitant of forming a structure of government.129 As members of the polis, U.S.
persons, both distributively and collectively, obtain the protections of the Constitution. Viewed in this regard, the Constitution itself embodies
the collective organization of “the people” into one entity. “U.S. persons” and “the people” are, therefore, one and the same. The “right of the
people” thus refers to a collective group of individuals “who are part of a national community or who have otherwise developed sufficient
connection with this country to be considered part of that community.”130 Very few cases address precisely what constitutes sufficient contact
with the United States to satisfy the “substantial connections” aspect of the majority’s decision. Those that do point in seemingly different
directions.131 At a minimum, however, it would be extraordinary to assume that simply because an individual uses a U.S. company, he or she
thereby gains the protections of the Fourth Amendment. This
was the basic argument underlying the “modernization”
of FISA in the first place, to take account of bad actors, communicating overseas, who would suddenly
fall within the more protective FISA regime merely because their communications happened to come
within U.S. territory by nature of the carrier in question. Even recognizing, however, that few
constitutional barriers may apply to the programmatic use of Section 702 insofar as it is applied to nonU.S. persons (leaving aside the questions that accompany the incidental collection of U.S. persons’ information, as well as entirely domestic
conversations), as a matter of policy, certainly both PRISM and the use of to/from or about collection in
upstream gathering has dramatically undermined U.S. industry. As a matter of policy, therefore, greater
restrictions, more transparency, and more effective oversight of the international collection of content
may help to alter the situation with regard to the skepticism expressed towards U.S. companies. The
Obama Administration has begun to take steps to acknowledge the importance of data privacy for
European citizens, but steps have thus far been limited to law enforcement, excluding surveillance
conducted for national security purposes. In June 2014, Attorney General Eric Holder announced that, as part of the EU-U.S.
Data Protection and Privacy Agreement, the Administration would work with Congress to provide EU citizens the ability to seek redress in U.S.
courts where personal data, shared with the United States by European countries for law enforcement purposes is subsequently intentionally
or willfully disclosed.132 The Office of the Director of National Intelligence claims this action as part of the privacy-protective measures
implemented in the wake of the Snowden disclosures. 133 The agreement, however, is limited to information provided by European countries,
making it somewhat beside the point. More relevantly, the Administration supported the USA FREEDOM Act, which would have prohibited the
28
bulk collection of telephony metadata under Section 215 of the USA PATRIOT Act (as well as the Pen Registers and Trap and Trace provisions of
FISA and National Security Letters, which appear in five parts of the U.S. Code). Congress,
however, failed to pass the USA
FREDOM Act. Actions taken with regard to Section 702 have been minimal and generally focused on U.S.
persons.
29
1AC- Solvency: Credibility Solves Fear
Plan restores credibility by giving companies distance from the NSA.
Laura K. Donohue ’15 (Georgetown University Law Center, “High Technology, Consumer Privacy, and
U.S. National Security,” http://scholarship.law.georgetown.edu/facpub/1457
)
Congress has an opportunity to take the lead by recognizing the right to privacy still held by data holders
when information is collected by third parties. It can then craft statutes accordingly, ensuring that U.S.
companies offer greater protections for consumers, in the process allowing industry to offset the
claims of its overseas competitors. 2. Legal Framework Thus far, U.S. high technology companies have been subject to a very
different statutory and regulatory structure than that which prevails in the EU. In the United States, privacy rights have largely been protected
via a series of vertical statutes dealing with specific areas, such as children using the Internet, driver-related information, and medical data.155
In the EU, in contrast, privacy has been protected by a more omnibus-type approach, which horizontally reaches across a number of areas. This
approach is reflected in the 1995 Directive as well as the national legislation implementing the directive on a country-by-country basis.156 The
vertical statutory scheme has been successful in addressing particular, discreet areas where privacy interests reside. However, outside of these
narrow exceptions, in the interests of encouraging innovation, the high technology sector has been left largely unregulated by federal statute.
The assumption has been that market forces would adjust to protect privacy interests. The advantage of this approach has been to give high
tech companies a significant amount of flexibility, allowing them to independently gauge the appropriate level of privacy protections to give to
consumers. The drawback has been that privacy itself has become commoditized, with companies actually making money off of selling
consumers’ privacy interests. Consider Google and its email service, Gmail, for instance. The company reads and analyzes all of its customers’
emails, it watches what people read, it looks at web sites people visit, and it records what people purchase. The company then sells access to
customers’ private lives to companies who want to advertise.157 Thus, the mother who sends an email to her son raising concern about
depression may receive an ad within hours for psychiatric services, even as a pregnant woman merely looking at cribs, may within days receive
mail through the U.S. post, advertising sales at Babies R’Us. In September 2013, Google lost an effort in the 9th Circuit Court of Appeals for
judicial review of a lower court’s refusal to dismiss multiple class action lawsuits accusing Google of violating the Wiretap Act.158 United States
District Judge Lucy Koh determined that the case was too far along to suffer delays. 159 Koh’s interpretation of the Electronic Communications
Privacy Act limits the “ordinary course of business” exception—not least because Google’s practice violates its own policies. 160 The lawsuits,
filed in California, Florida, Illinois, Maryland, and Pennsylvania, at great expense, are ongoing. Capitalizing on private data represents a
significant breach of the right to privacy. Instead of protecting privacy, the market has exploited it for monetary gain. In the United States and
overseas, individuals are concerned about the lack of protections afforded. Congressional legislation could fix this problem by bringing high
technology within the broader statutory framework and thus closing a gap in the existing law. 3. Safe Harbor Considerations In the wake of the
Snowden revelations, the EU Commission issued a report recommending the retention of Safe Harbor, but recommending significant changes,
including required disclosure of cloud computing and other service provider contracts used by Safe Harbor members.161 The Safe Harbor
provisions, developed from 1999 to 2000 by the U.S. Commerce Department, the Article 31 Committee on Data Privacy, and the European
Union, created a narrow bridge between the United States and EU. At the time, the European Parliament, which did not bind the European
Commission, rejected the Safe Harbor provisions by a vote of 279 to 259, with twenty-two abstentions. Chief amongst European concerns was
the failure of the agreement to provide adequate protections. In light of the massive data breaches over the past five years in the United States,
the practices of a largely unregulated high technology industry, and the ubiquitous nature of NSA surveillance, Europeans are now even less
supportive of the Safe Harbor provisions.162 They amount to a self-regulated scheme in which the U.S. Federal Trade Commission looks at
whether a company, which has voluntarily opted-in to the program, fails to do what it has stated it will do, within the bounds of its own privacy
policy.163 Stronger measures are
necessary to restore European confidence in U.S. high technology
companies. C. Establishing Economic Security as National Security Economic strength as national security, as was previously discussed, is
not a new concept. The Founding itself was premised, in part, on the importance of economic security as being vital to U.S. national interests. In
1787, the Articles of Confederation were written out of existence on economic security grounds, as the country sought to reassure the
international community that it was a viable trading partner.164 Since that time, the United States has at times had to remind itself of the
importance of the economy to U.S. national interests. We are once again at such a moment. High
technology is a vital part of the
U.S. economy. It is a symbolic and actual manifestation of the country’s commitment to innovation in
every sphere of life. It plays to the United States’ strengths as a nation. It has the potential to change regimes, to alter political relationships,
and to shape the daily lives of people around the globe. And it deserves special attention.
The danger is that U.S. industry will
become less competitive and that the U.S. will lose its dominance in the Internet sphere. To some extent, we
do, structurally, pay some attention to the importance of the economy for U.S. national security. But many consequential decisions are not
aired in full light of the possible implications for U.S. economic interests. 165 One way Congress could rectify this would be to take a look at
30
how to integrate economic concerns, as an institutional matter, into the national security infrastructure—and not just at the highest levels, but
at a programmatic level, where key decisions about programs are being made. V. CONCLUDING REMARKS The Snowden documents revealed
not just the extent to which high technology companies had been coopted or compromised, but also that the targets of NSA surveillance
include allied and non-allied countries. 166 The
impact of this information has meant that U.S. companies have lost
revenues and experienced declining market share. Simultaneously, the United States’ position in
international trade negotiations has been weakened. The NSA programs also spurred other countries’
efforts to implement data localization. Jurisdictional questions and national borders previously marked the worldwide Internet
discussions.167 But countries are using the NSA programs to justify restricting data storage to national borders, making it more difficult for the
United States to gain access.168 The
backlash has led some commentators to raise concern that “the Internet will
never be the same.”169 At risk is the balkanization of the Internet, undermining its traditional culture of open access, and increasing the
cost of doing business.170 By undermining high technology companies, U.S. economic security—which is
central to U.S. national security—is at risk. Part of the problem appears to be that the national security institutional structure
has failed to adequately reflect the importance of economic concerns. Beyond this, there have been a number of unintended consequences
even within spheres traditionally understood as within a national security realm. To
redress the negative effects that have
followed from public awareness of the NSA programs conducted under Section 215 of the USA PATRIOT
Act and Section 702 of the FISA Amendments Act, the most important step that Congress could take
would be to reign in the surveillance authorities themselves, in the process providing greater
transparency and oversight. An alteration in U.S. privacy law would also help to reassure U.S. customers
and individuals located outside domestic bounds that consumer privacy is protected, allowing industry
accurately to claim that the circumstances have changed. Consideration of how to integrate economic concerns into the
national security infrastructure would further help to emphasize the importance of taking account of the impact of new initiatives on the
United States.
31
Add-On Advantages
32
Protectionism 2AC 1/
Protectionism:
Data surveillance wrecks US competitiveness in cloud services: this weakness triggers
a protectionist free-for-all.
DANIEL CASTRO ‘13 ( Senior Analyst with the Information Technology and Innovation
Foundation and Director of the Center for Data Innovation, August,
The recent revelations about the extent to which the National Security Agency (NSA) and other U.S. law enforcement and national
security agencies have used provisions in the Foreign Intelligence Surveillance Act (FISA) and USA PATRIOT Act to obtain
electronic data from third parties will likely have an immediate and lasting impact on the
competitiveness of the U.S. cloud computing industry if foreign customers decide the risks of storing data with a U.S.
company outweigh the benefits. The United States has been the leader in providing cloud computing services not just domestically, but also
abroad where it dominates every segment of the market. In the 2013 Informa Cloud World Global Insights survey, 71 percent of respondents
(of which only 9 percent were from North America) ranked the United States as the leader in cloud computing usage and innovation.1 In this
same survey, nine out of ten respondents linked cloud computing to their country’s economic competitiveness. But other countries are trying
to play catch-up to the United States’ early success. Of the $13.5 billion in investments that cloud computing service providers made in 2011,
$5.6 billion came from companies outside North America. 2 Even national governments are helping to bankroll these efforts to combat U.S.
market leadership—France, for example, invested €135 million in a joint venture in cloud computing.3
At stake is a significant
amount of revenue. As shown in figure 1, the global enterprise public cloud computing market will be a $207 billion industry by 2016.4
Europeans in particular are trying to edge out their American competitors, and they are enlisting their governments to help. Jean-Francois
Audenard, the cloud security advisor to France Telecom, said with no small amount of nationalistic hyperbole, “It’s extremely important to have
the governments of Europe take care of this issue because if all the data of enterprises were going to be under the control of the U.S., it’s not
really good for the future of the European people.”5 Figure 1: Worldwide spending on cloud computing for U.S. and non-U.S. markets, 2009 –
2016, $ billions. 6 And governments have begun to respond. In a 2012 policy document titled “Unleashing the Potential of Cloud Computing in
Europe,” the European Commission (EC) called for a number of steps to promote cloud computing adoption in Europe, including creating panEuropean technical standards, EU-wide certification for cloud computing providers, and model contract language.7 The
Europeans are
quite frank about their intentions. The EC notes “this strategy is about building a new industry, and
better competing against the United States in particular.”8 Gartner estimates that in Western Europe alone the cloud
computing market will be $47 billion by 2015, and the EC estimates that European cloud computing providers stand to gain €80 billion in
revenue by 2020.9 While
much of this projected growth was until recently up for grabs by U.S. companies,
the disclosures of the NSA’s electronic surveillance may fundamentally alter the market dynamics. Neelie
Kroes, European Commissioner for Digital Affairs, stated the problem quite succinctly, “If European cloud customers cannot
trust the United States government, then maybe they won't trust U.S. cloud providers either. If I am
right, there are multibillion-euro consequences for American companies. If I were an American cloud provider, I
would be quite frustrated with my government right now.”10 The impact of PRISM on U.S companies may be
particularly acute because cloud computing is a rapidly growing industry. This means that cloud
computing vendors not only have to retain existing customers, they must actively recruit new customers
to retain market share. Global spending on cloud computing is expected to grow by as much as 100
percent between 2012 and 2016, whereas the global IT market will only grow by 3 percent.11 If U.S.
companies lose market share in the short term, this will have long-term implications on their
competitive advantage in this new industry. Rival countries have noted this opportunity and will try to
exploit it. One tactic they used before the PRISM disclosures was to stoke fear and uncertainty about
the USA PATRIOT Act to argue that European businesses should store data locally to protect domestic
33
data from the U.S. government.12 Reinhard Clemens, CEO of Deutsche Telekom’s T-systems group, argued in 2011 that creating a
German or European cloud computing certification could advantage domestic cloud computing providers. He stated, “The Americans say that
no matter what happens I’ll release the data to the government if I’m forced to do so, from anywhere in the world. Certain German companies
don’t want others to access their systems. That’s why we’re well-positioned if we can say we’re a European provider in a European legal sphere
and no American can get to them.”13 And after the recent PRISM leaks, German
Interior Minister Hans-Peter Friedrich
declared publicly, “whoever fears their communication is being intercepted in any way should use
services that don't go through American servers.”14 Similarly, Jörg-Uwe Hahn, a German Justice Minister, called for a boycott
of U.S. companies.15 After PRISM, the case for national clouds or other protectionist measures is even
easier to make. FINDINGS: THE IMPACT ON U.S. CLOUD SERVICE PROVIDERS Just how much do U.S. cloud computing providers stand to
lose from PRISM? At this stage it is unclear how much damage will be done, in part because it is still not certain how the U.S. government will
respond. But it is possible to make some reasonable estimates about the potential impact. On the low end, U.S. cloud computing providers
might lose $21.5 billion over the next three years. This estimate assumes the U.S. eventually loses about 10 percent of foreign market to
European or Asian competitors and retains its currently projected market share for the domestic market. On the high end, U.S.
cloud
computing providers might lose $35.0 billion by 2016. This assumes the U.S. eventually loses 20 percent of the foreign
market to competitors and retains its current domestic market share. (See Appendix A for details.) What is the basis for these assumptions? The
data are still thin—clearly this is a developing story and perceptions will likely evolve—but in June and July of 2013, the Cloud Security Alliance
surveyed its members, who are industry practitioners, companies, and other cloud computing stakeholders, about their reactions to the NSA
leaks.16 For non-U.S. residents, 10 percent of respondents indicated that they had cancelled a project with a U.S.-based cloud computing
provider; 56 percent said that they would be less likely to use a U.S.- based cloud computing service. For U.S. residents, slightly more than a
third (36 percent) indicated that the NSA leaks made it more difficult for them to do business outside of the United States. Thus we might
reasonably conclude that given
current conditions U.S. cloud service providers stand to lose somewhere
between 10 and 20 percent of the foreign market in the next few years. Indeed, some foreign providers are already
reporting their success. Artmotion, Switzerland’s largest hosting company, reported a 45 percent increase in revenue in the month after
Edward Snowden revealed details of the NSA’s PRISM program.17 And the
percentage lost to foreign competitors could go
higher if foreign governments enact protectionist trade barriers that effectively cut out U.S. providers.
Already the German data protection authorities have called for suspending all data transfers to U.S.
companies under the U.S.-EU Safe Harbor program because of PRISM.18 While the reputations of U.S.
cloud computing providers (even those not involved with PRISM) are unfortunately the ones being most tarnished
by the NSA leaks, the reality is that most developed countries have mutual legal assistance treaties (MLATs) which allow them to access
data from third parties whether or not the data is stored domestically.19 The market research firm IDC noted in 2012, “The PATRIOT Act is
nothing special, indeed data stored in the US is generally better protected than in most European countries, in particular the UK.”20 In
Germany (yes, the same country that wants to suspend data transfers to the United States) the G10 act gives German intelligence officials the
ability to monitor telecommunications without a court order. 21 RECOMMENDATIONS So what should the U.S. government do? First, U.S.
government needs to proactively set the record straight about what information it does and does not have access to and how this level of
access compares to other countries. To do this effectively, it needs to continue to declassify information about the PRISM program and allow
companies to reveal more details about what information has been requested of them by the government. The economic consequences of
national security decisions should be part of the debate, and this cannot happen until more details about PRISM have been revealed. Second,
the U.S. government should work to establish international transparency requirements so that it is clear what information U.S.-based and nonU.S.-based companies are disclosing to both domestic and foreign governments. For example, U.S. trade negotiators should work to include
transparency requirements in trade agreements, including the Transatlantic Trade and Investment Partnership (TTIP) currently being negotiated
with the EU. Taking these steps will help ensure that national security interests are balanced against economic interests, and that U.S. cloud
service providers are able to effectively compete globally.22 CONCLUSION The
United States has both the most to gain and
the most to lose. Many of the economic benefits of cloud computing, such as job growth and revenue,
are dependent on the United States being able to export cloud computing services. If U.S. firms are to maintain
their lead in the market, they must be able to compete in the global market. It is clear that if the U.S. government continues to
impede U.S. cloud computing providers, other nations are more than willing to step in to grow their own
industries at the expense of U.S. businesses.
34
Protectionism 2AC 2/
Independently, NSA surveillance weakens our negotiating posture on key areas in vital
trade negotiations. This crushes the growth and inhibits economic integration.
Laura K. Donohue ’15 (Georgetown University Law Center, “High Technology, Consumer Privacy, and
U.S. National Security,” http://scholarship.law.georgetown.edu/facpub/1457
)
B. Trade Agreements The
NSA programs, and media coverage of them, have further impacted bi and multilateral trade negotiations, undermining U.S. economic security. Consider two of the most important talks currently
underway: the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP). TTIP is a trade and investment
negotiation that is being conducted between the European Commission and the United States. The purpose of the agreement is to create
better trade relations between the two region, enabling companies on both sides of the Atlantic to thrive. The
revelations about NSA
activities have had a profound impact on the negotiations. In March 2014 the European Parliament passed a resolution
noting “the impact of mass surveillance.” It stated, “the revelations based on documents leaked by former NSA contractor Edward Snowden put
political leaders under the obligation to address the challenges of overseeing and controlling intelligence agencies in surveillance activities and
assessing the impact of their activities on fundamental rights and the rule of law in a democratic society.” 39 It recognized that the programs
had undermined “trust between the EU and the US as transatlantic partners.” Not least were concerns that the information could be used for
“economic and industrial espionage”—and not merely for the purpose of heading off potentially violent threats. Parliament strongly
emphasized, “given the importance of the digital economy in the relationship and in the cause of rebuilding EU-US trust,” that its “consent to
the final TTIP agreement could be endangered as long as the blanket mass surveillance activities and the interception of communications in EU
institutions and diplomatic representations are not completely abandoned and an adequate solution is found for the data privacy rights of EU
citizens.” The resolution underscored that any agreement to TTIP would hinge on the protection of the data privacy rights as reflected in the
protection of fundamental rights in the EU Charter.40 Even if the surveillance programs do not entirely derail TTIP, they have the potential to
significantly retard negotiations.41 Much is at stake. The Center for Economic Policy Research in London, for instance, estimates that a
successful TTIP could improve U.S. workers’ wages, provide new jobs, and increase the country’s GDP by $100 billion per year. 42 Another
study, conducted by the Bertelsmann Foundation, suggests that TTIP “could increase GDP per capita in the United States by 13 percent over the
long term.”43 To the extent that
the programs weaken the U.S. position in the negotiations, the impact could be
significant.44 Although the United States Trade Representative is trying to counter the political fallout from the NSA debacle by putting
local data protection initiatives on the table in the TTIP negotiations, the EU has steadfastly resisted any expansion into this realm. TPP, in turn,
is a trade agreement that the United States is negotiating with 11 countries in the Asia-Pacific region (Australia, Brunei Darussalam, Canada,
Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam). TPP (with participation of Japan), accounts for nearly 40% of
global GDP, about 1/3 of world trade.
Two of the United States’ objectives in these negotiations are directly
implicated by the Snowden releases: e-commerce / telecommunications, and intellectual property
rights. The NSA programs relate to a number of categories under e-commerce—such as rules preventing discrimination based on the country
of origin, and efforts to construct a single, global Internet. Nevertheless, as discussed below, some of the countries involved in TPP have already
adopted data localization laws. The NSA
programs have thus weakened the United States’ negotiation position in
these discussions, by making it more difficult to reach agreement in key areas. In addition to e-commerce
considerations, as part of the TPP negotiations, the United States has prioritized intellectual property rights. Some 40 million American
jobs are directly or indirectly tied to “IP-intensive” industries. These jobs tend to be high-paying and
stimulate approximately 60% of U.S. merchandise exports, as well as a significant portion of services.
Efforts to make progress in TPP by developing stronger protections for patents, trademarks copyrights,
and trade secrets—including safeguards against cyber theft of trade secrets—is made more perilous by
the existence of the NSA programs.
35
Protectionism 2AC 3/
Best models of alliance networks prove that trade solves war by reducing the
instability of loose networks. Trade-driven alliances deter conflict, incentivize
cooperation, and reduce escalation.
Matthew O. Jackson 15 (William D. Eberle Professor of Economics at Stanford and Stephen M. Nei,
PhD Student in Economics at Stanford, June, “Networks of Military Alliances, Wars, and International
Trade”, October 2014, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2389300
It turns out that there are no war-stable networks, even with this definition that imposes minimal requirements. The tension is understood as
follows. Requiring
that countries not be vulnerable to attack and having every alliance serve some purpose
leads networks to be relatively sparse - with each country having a few alliances but a network that is
not overly dense. However, this can make a country susceptible to some of its allies joining forces and defeating it. Essentially, the
pressure to economize on alliances conflicts with stability against the formation of new alliances, which leads to instability and
would suggest chaotic dynamics. This instability provides insights into the constantly shifting structures
and recurring wars that occurred throughout the nineteenth and first half of the twentieth centuries.7
Wars, however, have greatly subsided in parallel with the huge increase of trade (which was partly driven by the
introduction of containerized shipping in the 1960s, which greatly decreased costs): Between 1820 and 1959 each pair of countries averaged
.00056 wars per year, while from 1960 to 2000 the average was .00005 wars per year, less than one tenth as much. We see this pattern quite
clearly in Figure 1.8 These changes also follow the advent of nuclear weapons, which impacted the technology of war. However, we
show
that nuclear weapons cannot lead to stability in the absence of trade, as our model allows for quite
arbitrary asymmetries between the military capabilities of countries and offensive or defensive
advantages in wars - and instability ensues for any specification of technology and relative military
capabilities. Indeed, in order to capture the actual patterns that have emerged one must add other considerations - such as trade
considerations - since the base model shows that all networks of alliances are unstable with nuclear weapons but
without trade.9 Thus, the second part of our analysis is to enrich the base model to include international trade. Indeed, there has been a
rapid increase in global trade since World War II (partly coincident with the growth of container shipping among other stimuli). The empirical
relationship between war and trade is an active area of research, with strong suggestions (e.g., Martin, Mayer, and Thoenig (2008)) that
network concerns may be important. So, we introduce a concept of a network of alliances being war and trade stable, which allows countries to
form alliances for either economic or military considerations. In this
richer model, an alliance allows countries to trade with each other
existence of networks of alliances
that are stable against the addition or deletion of alliances. Trade provides two helpful incentives: first it provides
economic motivations to maintain alliances, and the resulting denser network of alliances then has a
deterrent effect; and second, it can reduce the incentives of a country to attack another since trade will
be disrupted. This reduces the potential set of conflicts and, together with the denser networks, allows
for a rich family of stable networks that can exhibit structures similar to networks we see currently. We
and to coordinate military activities, and so can be formed for either reason. This restores
provide some results on the existence and structure of war and trade stable networks of alliances, showing that structures similar to those
observed over the past few decades are economically stable under apparently reasonable parameters. It is important to note that another
dramatic change during the post-war period was the introduction of nuclear weapons, which changes the technology of war and is generally
thought to have greatly 4 increased the defensive advantage to those with such weapons.10 Our model suggests that although world-wide
adoption of nuclear weapons could stabilize things in the absence of trade, it would result in an empty network of alliances as the stable
network. To
explain the much denser and more stable networks in the modern age along with the paucity
of war in a world where nuclear weapons are limited to a small percentage of countries, our model
points to the enormous growth in trade as a big part of the answer. We close the paper with some discussion of this role that the
growth in trade has played in reducing wars over the past half century, and how this relates to the advent of the nuclear age. The model
provides some specific predictions for some of the mechanisms that decrease wars: including trade with
36
allies (making it more likely that allies will aid a country and less likely that they will be part of an attacking coalition against that country),
and that increasing trade between any two countries lowers their gains from war with each other
making it less likely that they will be at war at any time. We show that both of these effects are
observed in the data. Before proceeding, let us say a few words about how this paper contributes to the study of war. The literature on
war provides many rationales for why wars occur. Our analysis here fits firmly into what has become a “rationalist” tradition based on cost and
benefit analyses by rational actors, with roots seen in writings such as Hobbes (1651) Leviathan, and has become the foundation for much of
the recent international relations literature.11 To
our knowledge, there are no previous models of conflict that gametheoretically model networks of alliances between multiple agents/countries based on costs and
benefits of wars. 12 There are previous models of coalitions in conflict settings (e.g., see Bloch (2012) for a survey). Here, network
structures add several things to the picture. Our model is very much in a similar rationalist perspective of the literature that examines group
conflict (e.g., Esteban and Ray (1999, 2001); Esteban and Sakovicz (2003)), but enriching it to admit network structures of alliances and of
international trade. This allows us to admit patterns that are consistent with the networks of alliances that are actually observed, which are far
from being partitions (e.g., the U.S. is currently allied with both Israel and Saudi Arabia, Pakistan and India, just to mention a couple of many
prominent examples). More importantly, our Theorem 3 provides a first model in which such non-partitional such structures are stable and
provide insight into peace. Moreover, as we already mentioned above, the observed patterns of wars and of alliances are not partitional, and so
this provides an important advance in moving the models towards matching observed patterns of wars,
trade and alliances. Our model thus serves as a foundation upon which one can eventually build more
elaborate analyses of multilateral interstate alliances, trade, and wars. It is also important to emphasize that the
network of international trade is complex and can in fact be stable (and prevent conflict) precisely because it cuts across coalitions. This is in
contrast to coalitional models that generally predict only the grand coalition can be stable or that very exact balances are possible (e.g., see
Bloch, Sanchez-Pages, and Soubeyran (2006)). Again, this is something illustrated in our Theorem 3, and which does not exist in the previous
literature. Finally, our
model illuminates the relationships between international trade, stable network
structures, and peace, something not appearing in the previous literature - as the previous literature that involves
international trade and conflict generally revolves around bilateral reasoning or focuses on instability and armament (e.g., Garfinkel, Skaperdas,
and Syropoulos (2014)) and does not address the questions that we address here. The complex relationship between trade and conflict is the
subject of a growing empirical literature (e.g., Barbieri (1996); Mansfield and Bronson (1997); Martin, Mayer, and Thoenig (2008); Glick and
Taylor (2010); Hegre, Oneal, and Russett (2010)). The
literature not only has to face challenges of endogeneity and
causation, but also of substantial heterogeneity in relationships, as well as geography, and the level of conflict. The various
correlations between conflict and trade are complex, and a model such as ours that combines military
and economic incentives, and others that may follow, can provide structure with which to interpret
some of the empirical observations, which we discuss in the following section.
37
Protectionism 2AC 4/
All global problems require effective trade: terrorism, poverty, health, geo-politics,
and all the rest require a consolidation of global trade. A vacuum will create trade
blocks- causing war.
Panitchpakdi ‘4 (Supachai Panitchpakdi, secretary-general of the UN Conference on Trade and
Development, 2/26/2004, American Leadership and the World Trade Organization, p.
http://www.wto.org/english/news_e/spsp_e/spsp22_e.html
The second point is that strengthening
the world trading system is essential to America's wider global objectives. Fighting
terrorism, reducing poverty, improving health, integrating China and other countries in the global
economy — all of these issues are linked, in one way or another, to world trade. This is not to say that trade is the
answer to all America's economic concerns; only that meaningful solutions are inconceivable without it. The world trading system is
the linchpin of today's global order — underpinning its security as well as its prosperity. A successful WTO is an example of how
multilateralism can work. Conversely, if it weakens or fails, much else could fail with it. This is something which the US — at
the epicentre of a more interdependent world — cannot afford to ignore. These priorities must continue to guide US policy — as they have
done since the Second World War. America has been the main driving force behind eight rounds of multilateral trade negotiations, including
the successful conclusion of the Uruguay Round and the creation of the WTO. The US — together with the EU — was instrumental in launching
the latest Doha Round two years ago. Likewise, the recent initiative, spearheaded by Ambassador Zoellick, to re-energize the negotiations and
move them towards a successful conclusion is yet another example of how essential the US is to the multilateral process — signalling that the
US remains committed to further liberalization, that the Round is moving, and that other countries have a tangible reason to
get on board. The reality is this: when the US leads the system can move forward; when it withdraws, the system drifts. The fact that US
leadership is essential, does not mean it is easy. As WTO rules have expanded, so too has as the complexity of the issues the WTO deals with —
everything from agriculture and accounting, to tariffs and telecommunication. The WTO is also exerting huge gravitational pull on countries to
join — and participate actively — in the system. The WTO now has 146 Members — up from just 23 in 1947 — and this could easily rise to 170
or more within a decade. Emerging powers like China, Brazil, and India rightly demand a greater say in an institution
in which they have a growing stake. So too do a rising number of voices outside the system as well. More and more people recognize that the
WTO matters. More non-state actors — businesses, unions, environmentalists, development NGOs — want the multilateral system to reflect
their causes and concerns. A decade ago, few people had even heard of the GATT. Today the WTO is front page news. A more visible WTO has
inevitably become a more politicized WTO. The sound and fury surrounding the WTO's recent Ministerial Meeting in Cancun — let alone Seattle
— underline how challenging managing the WTO can be. But these challenges can be exaggerated. They exist precisely because so many
countries have embraced a common vision. Countries the world over have turned to open trade — and a rules-based system — as the key to
their growth and development. They agreed to the Doha Round because they believed their interests lay in freer trade, stronger rules, a more
effective WTO. Even in Cancun the great debate was whether the multilateral trading system was moving fast and far enough — not whether it
should be rolled back. Indeed, it is critically important that we draw the right conclusions from Cancun — which are only now becoming clearer.
The disappointment was that ministers were unable to reach agreement. The achievement was that they exposed the risks of failure,
highlighted the need for North-South collaboration, and — after a period of introspection — acknowledged the inescapable logic of
negotiation. Cancun showed that, if the challenges have increased, it is because the stakes are higher. The bigger challenge to American
leadership comes from inside — not outside — the United States. In America's current debate about trade, jobs and globalization we have
heard a lot about the costs of liberalization. We need to hear more about the opportunities. We need to be reminded of the advantages of
America's openness and its trade with the world — about the economic growth tied to exports; the inflation-fighting role of imports, the
innovative stimulus of global competition. We need to explain that freer trade works precisely because it involves positive change — better
products, better job opportunities, better ways of doing things, better standards of living. While it is true that change can be threatening for
people and societies, it is equally true that the vulnerable are not helped by resisting change — by putting up barriers and shutting out
competition. They are helped by training, education, new and better opportunities that — with the right support policies — can flow from a
globalized economy. The fact is that for every job in the US threatened by imports there is a growing number of high-paid, high skill jobs
created by exports. Exports supported 7 million workers a decade ago; that number is approaching around 12 million today. And these new
jobs — in aerospace, finance, information technology — pay 10 per cent more than the average American wage. We especially need to inject
some clarity — and facts — into the current debate over the outsourcing of services jobs. Over the next decade, the US is projected to create an
average of more than 2 million new services jobs a year — compared to roughly 200,000 services jobs that will be outsourced. I am well aware
38
that this issue is the source of much anxiety in America today. Many Americans worry about the potential job losses that might arise from
foreign competition in services sectors. But it’s worth remembering that concerns about the impact of foreign competition are not new. Many
of the reservations people are expressing today are echoes of what we heard in the 1970s and 1980s. But people at that time didn’t fully
appreciate the power of American ingenuity. Remarkable advances in technology and productivity laid the foundation for unprecedented job
creation in the 1990s and there is no reason to doubt that this country, which has shown time and again such remarkable potential for
competing in the global economy, will not soon embark again on such a burst of job-creation.
America's openness to servicesector trade — combined with the high skills of its workforce — will lead to more growth, stronger
industries, and a shift towards higher value-added, higher-paying employment. Conversely, closing the door to
service trade is a strategy for killing jobs, not saving them. Americans have never run from a challenge and have never been defeatist in the face
of strong competition. Part of this challenge is to create the conditions for global growth and job creation here and around the world. I believe
Americans realize what is at stake. The process of opening to global trade can be disruptive, but they recognize that the US economy cannot
grow and prosper any other way. They recognize the importance of finding global solutions to shared global problems. Besides, what is the
alternative to the WTO? Some argue that the world's only superpower need not be tied down by the constraints of the multilateral system.
They claim that US sovereignty is compromised by international rules, and that multilateral institutions limit rather than expand US influence.
Americans should be deeply sceptical about these claims. Almost none
of the trade issues facing the US today are any
easier to solve unilaterally, bilaterally or regionally. The reality is probably just the opposite. What sense does it make — for
example — to negotiate e-commerce rules bilaterally? Who would be interested in disciplining agricultural subsidies in a regional agreement
but not globally? How can bilateral deals — even dozens of them — come close to matching the economic impact of agreeing to global free
trade among 146 countries? Bilateral and regional deals can sometimes be a complement to the multilateral system, but they can never be a
substitute. There is a bigger danger. By treating some countries preferentially, bilateral
and regional deals exclude others —
fragmenting global trade and distorting the world economy. Instead of liberalizing trade — and widening
growth — they carve it up. Worse, they have a domino effect: bilateral deals inevitably beget more
bilateral deals, as countries left outside are forced to seek their own preferential arrangements, or risk
further marginalization. This is precisely what we see happening today. There are already over two hundred bilateral and regional
agreements in existence, and each month we hear of a new or expanded deal. There is a basic contradiction in the assumption that bilateral
approaches serve to strengthen the multilateral, rules-based system. Even when intended to spur free trade, they can ultimately risk
undermining it. This is in no one's interest, least of all the United States.
America led in the creation of the multilateral
system after 1945 precisely to avoid a return to hostile blocs — blocs that had done so much to fuel
interwar instability and conflict. America's vision, in the words of Cordell Hull, was that “enduring peace and the welfare of nations
was indissolubly connected with the friendliness, fairness and freedom of world trade”. Trade would bind nations together, making another war
unthinkable. Non-discriminatory rules would prevent a return to preferential deals and closed alliances. A network of multilateral initiatives and
organizations — the Marshal Plan, the IMF, the World Bank, and the GATT, now the WTO — would provide the institutional bedrock for the
international rule of law, not power. Underpinning all this was the idea that freedom — free trade, free democracies, the free exchange of
ideas — was essential to peace and prosperity, a more just world. It is a vision that has emerged pre-eminent a half century later. Trade has
expanded twenty-fold since 1950. Millions in Asia, Latin America, and Africa are being lifted out of poverty, and millions more have new hope
for the future. All the great powers — the US, Europe, Japan, India, China and soon Russia — are part of a rules-based multilateral trading
system, greatly increasing the chances for world prosperity and peace. There is a growing realization that — in our interdependent world —
sovereignty is constrained, not by multilateral rules, but by the absence of rules.
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Protectionism- NSA = Pretext
NSA surveillance is an effective pretext for protectionism.
Jonah Force Hill ‘14 (technology and international affairs consultant based in San Francisco and
a Fellow of the Global Governance Futures program, “THE GROWTH OF DATA
LOCALIZATION POST-SNOWDEN: ANALYSIS AND RECOMMENDATIONS FOR U.S.
POLICYMAKERS AND BUSINESS LEADERS”)
Diverse Motivations Upon first glance, the preceding case studies present a consistent narrative: for
the nations now considering
localization for data, the Snowden revelations exposed an NSA that had overstepped the
boundaries of acceptable surveillance, violated citizen privacy, and catalyzed public and
government opinion in favor of forceful action in response. For policymakers, data localization
offers a seemingly simple and effective solution. Under closer examination, however, a more complicated picture
emerges. The localization movement is in fact a complex and multilayered phenomenon, with the objective not only—or even primarily—of
localization also serves to protect domestic
businesses from foreign competition, to support domestic intelligence and law enforcement
ambitions, to suppress dissent and to stir up populist enthusiasms for narrow political ends. Direct
protecting privacy. Depending on the country in which it is being advanced,
evidence of these other objectives for which privacy seems to be a pretext is by its nature difficult to uncover: rarely to policy-makers admit to
seeking protectionist goals, to spying on their populations, to suppressing dissent or to exploiting populist emotions. Yet, by viewing the
localization movement in the context of other state and corporate interests and activities, it is possible to uncover these other, less exalted ends.
Protectionism Powerful business interests undoubtedly see data localization as an effective
and convenient strategy for gaining a competitive advantage in domestic IT markets long
dominated by U.S. tech firms. To localization proponents of this stripe, the NSA programs
serve as a powerful and politically expedient excuse to pursue policies protective of
domestic businesses. As an illustration, data localization in Germany presents clear economic benefits for a most powerful industry
advocate for localization, Deutsche Telekom (DT). Whether by way of its “email made in Germany” system or the Schengen area routing
arrangement, DT looks poised to gain from efforts to reduce the prominence of American tech firms in Europe. It is no wonder that the company
has been spearheading many of the localization proposals in that country. As telecommunications law expert Susan Crawford has noted, DT has
been seeking to expand its cloud computing services for years, but has found its efforts to appeal to German consumers stifled by competition
from Google and other American firms. 79 T-Systems International GmbH, DT’s 29,000-employee distribution arm for information-technology
solutions, has been steadily losing money as a result.80 Moreover, Crawford suggests that DT would not be content with gaining a greater share
of the German market; she points out that through a Schengen routing scheme, “Deutsche Telekom undoubtedly thinks that it will be able to
collect fees from network operators in other countries that want their customers’ data to reach Deutsche Telekom’s customers.”81 Similarly,
companies and their allies in government in Brazil and India look to profit from data localization proposals. Indeed, the governments of both
nations have for years sought to cultivate their own domestic information technology sectors, at times by protecting homegrown industries with
import tariffs and preferential taxation. Brazilian President Rousseff has on numerous occasions stated that her government intends to make
Brazil a regional technology and innovation leader; in recent years the government has proposed measures to increase domestic Internet
bandwidth production, expand international Internet connectivity, encourage domestic content production, and promote the use of domestically
produced network equipment.82 India, more controversially, has at times required foreign corporations to enter into joint ventures to sell
ecommerce products, and has compelled foreign companies to transfer proprietary technology to domestic firms after a predetermined amount of
time.83 Brazil and India are, of course, not alone in this respect. Indonesian firms are constructing domestic cloud service facilities with the help
of government grants, 84 while Korea is offering similar support to its own firms. 85 For the governments and corporations of these nations,
long
frustrated by their inability to develop a domestic IT industry that can compete on an
even playing field with the U.S. technology giants, data localization is one means to
confront, and perhaps overcome, the American Internet hegemony.
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Protectionism- Impact: EU
NSA backlash wrecks US/EU trade relations. Now is key to reverse course.
Danielle Kehl ’14 (with Kevin Bankston, Robyn Greene & Robert Morgus, analysts at New America’s
Open Technology Institute, “Surveillance Costs: The NSA’s Impact on the Economy, Internet Freedom &
Cybersecurity,” July, https://static.newamerica.org/attachments/534-surveillance-costs-the-nsasimpact-on-the-economy-internet-freedom-cybersecurity/Surveilance_Costs_Final.pdf)
In addition to requiring local data storage, a number of countries, particularly in the EU, are proposing stricter domestic privacy regulations to
ensure that their citizens are better protected against NSA snooping, which could lead to increased transaction costs for American companies
that need to comply with them. “The effect of these proposed EU rules could serious undermine the position of some U.S. firms… Business
models aside, the rules if adopted may require U.S. firms to place their servers, and European citizen data they hold, permanently in Europe,
potentially a prohibitively expensive—or technically unfeasible—requirement,” writes Jonah Force Hill, a scholar at Harvard University’s Belfer
Center for Science and International Affairs.147 In March 2014, members of the European Parliament passed the EU’s much-debated Data
Protection Regulation and Directive by an enormous margin.148 The rules impose strict limitations on what can be done with the data of EU
citizens. Individuals would have to explicitly consent to having their personal data processed—and would retain the right to withdraw their
consent if given. They would also be able to request their personal data from anyone who holds it and have it erased.149 The new rules apply
to the processing of EU citizens’ data no matter where that data is located, ensuring that personal information from Europe is still protected by
EU laws when it travels elsewhere, especially to the United States.150 And the deterrent fines are significant, with a maximum penalty of up to
five percent of revenues for non-compliance. That could translate to billions of dollars for large tech companies. The new rules build upon the
principles established in Europe’s 1995 Data Protection Directive with updates that reflect the modern Internet ecosystem. After the regulation
passed, the European Commissioner for Justice, Fundamental Rights and Citizenship, Viviane Reding, declared that the rules both preserve
fundamental European values and offer a competitive opportunity for Europe to distinguish itself after the NSA revelations. “Data Protection is
made in Europe. Strong data protection rules must be Europe’s trade mark,” she said. “Following the U.S. data spying scandals, data protection
is more than ever a competitive advantage.”151 The
NSA disclosures also threaten to upset existing U.S.-EU trade
relationships. On the same day that the Data Protection Regulation and Directive passed, members of the European Parliament voted in
favor of a resolution from the Civil Liberties, Justice and Home Affairs Committee on the mass surveillance of EU citizens.152 Among other
things, the resolution called for the suspension of the U.S.-EU “Safe Harbor” deal that lets American firms self-certify via the Commerce
Department that they are in compliance with EU privacy laws. The actual authority to suspend the Safe Harbor agreement lies in the hands of
the European Commission, but the Parliament’s affirmative vote heightens concerns that restrictive proposals could move forward, which
would directly threaten U.S. business interests. Over 3,000 American companies, including Facebook and Google, currently rely on the Safe
Harbor framework to process data from European citizens without violating the continent’s privacy laws.153 Yet both local and pan-European
officials have become increasingly concerned that the Safe Harbor makes it easier for U.S. tech companies to sidestep the EU’s stricter privacy
protections, especially in light of revelations about the companies’ compliance with the U.S. government under a number of the NSA programs.
In June 2014, for example, the Irish courts referred a case to the European Court of Justice “questioning the adequacy of privacy protections for
data transfers” under the Safe Harbor agreement.154 The Parliament’s resolution also calls for the European Parliament to withhold consent
for the final Transatlantic Trade and Investment Partnership (TTIP) and suspend the Terrorist Finance Tracking Program (TFTP) until the U.S.
makes various related concessions.155 Even though
additional steps are still required before implementation,
these actions are part of a meaningful shift in EU policy away from the previously favorable digital trade
relationship it has enjoyed with the United States. The final agreement on the Data Protection Regulation and Directive is
expected in 2015 as the European Parliament enters negotiations with the European Commission and the Council of Ministers (representing the
member countries) over the final version of the legislation.156 The demands in the resolution on mass surveillance, which represent the
opinion of the members of Parliament, would need to be actively taken up by the European Commission to move forward. Minister Reding has
also publicly stated that she wants to see “the development of European clouds” which meet new, stricter European privacy standards, arguing
that European governments can promote this “by making sure that data processed by them are only stored in clouds to which E.U. data
protection laws and European jurisdiction applies.”157 In June 2014, she further asserted that “EU data protection law will apply to nonEuropean companies if they do business in our territory.”158 The challenge, of course, is that since U.S. law has traditionally given law
enforcement and intelligence agencies a legal right to demand data from U.S. companies even if it is stored overseas, it creates a potentially
significant contradiction with EU rules as well as with attempts by U.S. tech companies like Microsoft to reassure customers that their data is
secure by offering the option to store that data outside the U.S.
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Protectionism- Impact: China
Integrating China into the global order is crucial to avoid great power wars during
hegemonic transition.
G. John Ikenberry ‘8 (“The Rise of China and the Future of the West Can the Liberal System Survive?,”
Jan/feb., Foreign Affairs)
The rise of China will undoubtedly be one of the great dramas of the twenty-first century. China's extraordinary economic growth and active
diplomacy are already transforming East Asia, and future decades will see even greater increases in Chinese power and influence. But exactly
how this drama will play out is an open question. Will China overthrow the existing order or become a part of it? And what, if anything, can the
United States do to maintain its position as China rises? Some observers believe that the American era is coming to an end, as the Westernoriented world order is replaced by one increasingly dominated by the East. The historian Niall Ferguson has written that the bloody twentieth
century witnessed "the descent of the West" and "a reorientation of the world" toward the East. Realists
go on to note that as
China gets more powerful and the United States' position erodes, two things are likely to happen: China
will try to use its growing influence to reshape the rules and institutions of the international system to
better serve its interests, and other states in the system -- especially the declining hegemon -- will start
to see China as a growing security threat. The result of these developments, they predict, will be tension, distrust, and conflict,
the typical features of a power transition. In this view, the drama of China's rise will feature an increasingly powerful China and a
declining United States locked in an epic battle over the rules and leadership of the international system.
And as the world's largest country emerges not from within but outside the established post-World War II international order, it is a drama that
will end with the grand ascendance of China and the onset of an Asian-centered world order. That course, however, is not inevitable. The
rise of China does not have to trigger a wrenching hegemonic transition. The U.S.-Chinese power
transition can be very different from those of the past because China faces an international order that is fundamentally
different from those that past rising states confronted. China does not just face the United States; it faces a Western-centered system that is
open, integrated, and rule-based, with wide and deep political foundations. The nuclear revolution, meanwhile, has made war among great
powers unlikely -- eliminating the major tool that rising powers have used to overturn international systems defended by declining hegemonic
states. Today's Western order, in short, is hard to overturn and easy to join. This unusually durable and expansive order is itself the product of
farsighted U.S. leadership. After World War II, the United States did not simply establish itself as the leading world power. It led in the creation
of universal institutions that not only invited global membership but also brought democracies and market societies closer together. It built an
order that facilitated the participation and integration of both established great powers and newly independent states. (It is often forgotten
that this postwar order was designed in large part to reintegrate the defeated Axis states and the beleaguered Allied states into a unified
international system.) Today, China can gain full access to and thrive within this system. And if it does, China will rise, but the Western order -- if
managed properly -- will live on. As it faces an ascendant China, the United States should remember that its leadership of the Western order
allows it to shape the environment in which China will make critical strategic choices. If
it wants to preserve this leadership,
Washington must work to strengthen the rules and institutions that underpin that order -- making it
even easier to join and harder to overturn. U.S. grand strategy should be built around the motto "The road to the East runs
through the West." It must sink the roots of this order as deeply as possible, giving China greater incentives for integration
than for opposition and increasing the chances that the system will survive even after U.S. relative
power has declined. The United States' "unipolar moment" will inevitably end. If the defining struggle of the twenty-first century is
between China and the United States, China will have the advantage. If the defining struggle is between China and a revived Western system,
the West will triumph.
G. John Ikenberry ‘8 (“The Rise of China and the Future of the West Can the Liberal System Survive?,”
Jan/feb., Foreign Affairs)
42
TRANSITIONAL ANXIETIES China is well on its way to becoming a formidable global power. The size of its
economy has quadrupled since the launch of market reforms in the late 1970s and, by some estimates,
will double again over the next decade. It has become one of the world's major manufacturing centers
and consumes roughly a third of the global supply of iron, steel, and coal. It has accumulated massive
foreign reserves, worth more than $1 trillion at the end of 2006. China's military spending has increased
at an inflation-adjusted rate of over 18 percent a year, and its diplomacy has extended its reach not just
in Asia but also in Africa, Latin America, and the Middle East. Indeed, whereas the Soviet Union rivaled
the United States as a military competitor only, China is emerging as both a military and an economic
rival -- heralding a profound shift in the distribution of global power. Power transitions are a recurring
problem in international relations. As scholars such as Paul Kennedy and Robert Gilpin have described it,
world politics has been marked by a succession of powerful states rising up to organize the international
system. A powerful state can create and enforce the rules and institutions of a stable global order in
which to pursue its interests and security. But nothing lasts forever: long-term changes in the
distribution of power give rise to new challenger states, who set off a struggle over the terms of that
international order. Rising states want to translate their newly acquired power into greater authority in
the global system -- to reshape the rules and institutions in accordance with their own interests.
Declining states, in turn, fear their loss of control and worry about the security implications of their
weakened position. These moments are fraught with danger. When a state occupies a commanding
position in the international system, neither it nor weaker states have an incentive to change the
existing order. But when the power of a challenger state grows and the power of the leading state
weakens, a strategic rivalry ensues, and conflict -- perhaps leading to war -- becomes likely. The danger
of power transitions is captured most dramatically in the case of late-nineteenth-century Germany. In
1870, the United Kingdom had a three-to-one advantage in economic power over Germany and a
significant military advantage as well; by 1903, Germany had pulled ahead in terms of both economic
and military power. As Germany unified and grew, so, too, did its dissatisfactions and demands, and as it
grew more powerful, it increasingly appeared as a threat to other great powers in Europe, and security
competition began. In the strategic realignments that followed, France, Russia, and the United Kingdom,
formerly enemies, banded together to confront an emerging Germany. The result was a European war.
Many observers see this dynamic emerging in U.S.-Chinese relations. "If China continues its impressive
economic growth over the next few decades," the realist scholar John Mearsheimer has written, "the
United States and China are likely to engage in an intense security competition with considerable
potential for war." But not all power transitions generate war or overturn the old order. In the early
decades of the twentieth century, the United Kingdom ceded authority to the United States without
great conflict or even a rupture in relations. From the late 1940s to the early 1990s, Japan's economy
grew from the equivalent of five percent of U.S. GDP to the equivalent of over 60 percent of U.S. GDP,
and yet Japan never challenged the existing international order. Clearly, there are different types of
power transitions. Some states have seen their economic and geopolitical power grow dramatically and
have still accommodated themselves to the existing order. Others have risen up and sought to change it.
Some power transitions have led to the breakdown of the old order and the establishment of a new
international hierarchy. Others have brought about only limited adjustments in the regional and global
system. A variety of factors determine the way in which power transitions unfold. The nature of the
rising state's regime and the degree of its dissatisfaction with the old order are critical: at the end of the
nineteenth century, the United States, a liberal country an ocean away from Europe, was better able to
embrace the British-centered international order than Germany was. But even more decisive is the
43
character of the international order itself -- for it is the nature of the international order that shapes a
rising state's choice between challenging that order and integrating into it.
G. John Ikenberry ‘8 (“The Rise of China and the Future of the West Can the Liberal System Survive?,”
Jan/feb., Foreign Affairs)
OPEN ORDER The postwar Western order is historically unique. Any international order dominated by a
powerful state is based on a mix of coercion and consent, but the U.S.-led order is distinctive in that it
has been more liberal than imperial -- and so unusually accessible, legitimate, and durable. Its rules and
institutions are rooted in, and thus reinforced by, the evolving global forces of democracy and
capitalism. It is expansive, with a wide and widening array of participants and stakeholders. It is capable
of generating tremendous economic growth and power while also signaling restraint -- all of which make
it hard to overturn and easy to join. It was the explicit intention of the Western order's architects in the
1940s to make that order integrative and expansive. Before the Cold War split the world into competing
camps, Franklin Roosevelt sought to create a one-world system managed by cooperative great powers
that would rebuild war-ravaged Europe, integrate the defeated states, and establish mechanisms for
security cooperation and expansive economic growth. In fact, it was Roosevelt who urged -- over the
opposition of Winston Churchill -- that China be included as a permanent member of the UN Security
Council. The then Australian ambassador to the United States wrote in his diary after his first meeting
with Roosevelt during the war, "He said that he had numerous discussions with Winston about China
and that he felt that Winston was 40 years behind the times on China and he continually referred to the
Chinese as 'Chinks' and 'Chinamen' and he felt that this was very dangerous. He wanted to keep China as
a friend because in 40 or 50 years' time China might easily become a very powerful military nation."
Over the next half century, the United States used the system of rules and institutions it had built to
good effect. West Germany was bound to its democratic Western European neighbors through the
European Coal and Steel Community (and, later, the European Community) and to the United States
through the Atlantic security pact; Japan was bound to the United States through an alliance partnership
and expanding economic ties. The Bretton Woods meeting in 1944 laid down the monetary and trade
rules that facilitated the opening and subsequent flourishing of the world economy -- an astonishing
achievement given the ravages of war and the competing interests of the great powers. Additional
agreements between the United States, Western Europe, and Japan solidified the open and multilateral
character of the postwar world economy. After the onset of the Cold War, the Marshall Plan in Europe
and the 1951 security pact between the United States and Japan further integrated the defeated Axis
powers into the Western order. In the final days of the Cold War, this system once again proved
remarkably successful. As the Soviet Union declined, the Western order offered a set of rules and
institutions that provided Soviet leaders with both reassurances and points of access -- effectively
encouraging them to become a part of the system. Moreover, the shared leadership of the order
ensured accommodation of the Soviet Union. As the Reagan administration pursued a hard-line policy
toward Moscow, the Europeans pursued détente and engagement. For every hard-line "push," there
was a moderating "pull," allowing Mikhail Gorbachev to pursue high-risk reforms. On the eve of German
unification, the fact that a united Germany would be embedded in European and Atlantic institutions -rather than becoming an independent great power -- helped reassure Gorbachev that neither German
nor Western intentions were hostile. After the Cold War, the Western order once again managed the
44
integration of a new wave of countries, this time from the formerly communist world. Three particular
features of the Western order have been critical to this success and longevity. First, unlike the imperial
systems of the past, the Western order is built around rules and norms of nondiscrimination and market
openness, creating conditions for rising states to advance their expanding economic and political goals
within it. Across history, international orders have varied widely in terms of whether the material
benefits that are generated accrue disproportionately to the leading state or are widely shared. In the
Western system, the barriers to economic participation are low, and the potential benefits are high.
China has already discovered the massive economic returns that are possible by operating within this
open-market system. Second is the coalition-based character of its leadership. Past orders have tended
to be dominated by one state. The stakeholders of the current Western order include a coalition of
powers arrayed around the United States -- an important distinction. These leading states, most of them
advanced liberal democracies, do not always agree, but they are engaged in a continuous process of
give-and-take over economics, politics, and security. Power transitions are typically seen as being played
out between two countries, a rising state and a declining hegemon, and the order falls as soon as the
power balance shifts. But in the current order, the larger aggregation of democratic capitalist states -and the resulting accumulation of geopolitical power -- shifts the balance in the order's favor. Third, the
postwar Western order has an unusually dense, encompassing, and broadly endorsed system of rules
and institutions. Whatever its shortcomings, it is more open and rule-based than any previous order.
State sovereignty and the rule of law are not just norms enshrined in the United Nations Charter. They
are part of the deep operating logic of the order. To be sure, these norms are evolving, and the United
States itself has historically been ambivalent about binding itself to international law and institutions -and at no time more so than today. But the overall system is dense with multilateral rules and
institutions -- global and regional, economic, political, and security-related. These represent one of the
great breakthroughs of the postwar era. They have laid the basis for unprecedented levels of
cooperation and shared authority over the global system. The incentives these features create for China
to integrate into the liberal international order are reinforced by the changed nature of the international
economic environment -- especially the new interdependence driven by technology. The most
farsighted Chinese leaders understand that globalization has changed the game and that China
accordingly needs strong, prosperous partners around the world. From the United States' perspective, a
healthy Chinese economy is vital to the United States and the rest of the world. Technology and the
global economic revolution have created a logic of economic relations that is different from the past -making the political and institutional logic of the current order all the more powerful.
G. John Ikenberry ‘8 (“The Rise of China and the Future of the West Can the Liberal System Survive?,”
Jan/feb., Foreign Affairs)
ACCOMMODATING THE RISE The most important benefit of these features today is that they give the
Western order a remarkable capacity to accommodate rising powers. New entrants into the system
have ways of gaining status and authority and opportunities to play a role in governing the order. The
fact that the United States, China, and other great powers have nuclear weapons also limits the ability of
a rising power to overturn the existing order. In the age of nuclear deterrence, great-power war is,
thankfully, no longer a mechanism of historical change. War-driven change has been abolished as a
historical process. The Western order's strong framework of rules and institutions is already starting to
45
facilitate Chinese integration. At first, China embraced certain rules and institutions for defensive
purposes: protecting its sovereignty and economic interests while seeking to reassure other states of its
peaceful intentions by getting involved in regional and global groupings. But as the scholar Marc
Lanteigne argues, "What separates China from other states, and indeed previous global powers, is that
not only is it 'growing up' within a milieu of international institutions far more developed than ever
before, but more importantly, it is doing so while making active use of these institutions to promote the
country's development of global power status." China, in short, is increasingly working within, rather
than outside of, the Western order. China is already a permanent member of the UN Security Council, a
legacy of Roosevelt's determination to build the universal body around diverse great-power leadership.
This gives China the same authority and advantages of "great-power exceptionalism" as the other
permanent members. The existing global trading system is also valuable to China, and increasingly so.
Chinese economic interests are quite congruent with the current global economic system -- a system
that is open and loosely institutionalized and that China has enthusiastically embraced and thrived in.
State power today is ultimately based on sustained economic growth, and China is well aware that no
major state can modernize without integrating into the globalized capitalist system; if a country wants
to be a world power, it has no choice but to join the World Trade Organization (WTO). The road to global
power, in effect, runs through the Western order and its multilateral economic institutions. China not
only needs continued access to the global capitalist system; it also wants the protections that the
system's rules and institutions provide. The WTO's multilateral trade principles and dispute-settlement
mechanisms, for example, offer China tools to defend against the threats of discrimination and
protectionism that rising economic powers often confront. The evolution of China's policy suggests that
Chinese leaders recognize these advantages: as Beijing's growing commitment to economic
liberalization has increased the foreign investment and trade China has enjoyed, so has Beijing
increasingly embraced global trade rules. It is possible that as China comes to champion the WTO, the
support of the more mature Western economies for the WTO will wane. But it is more likely that both
the rising and the declining countries will find value in the quasi-legal mechanisms that allow conflicts to
be settled or at least diffused. The existing international economic institutions also offer opportunities
for new powers to rise up through their hierarchies. In the International Monetary Fund and the World
Bank, governance is based on economic shares, which growing countries can translate into greater
institutional voice. To be sure, the process of adjustment has been slow. The United States and Europe
still dominate the IMF. Washington has a 17 percent voting share (down from 30 percent) -- a
controlling amount, because 85 percent approval is needed for action -- and the European Union has a
major say in the appointment of ten of the 24 members of the board. But there are growing pressures,
notably the need for resources and the need to maintain relevance, that will likely persuade the
Western states to admit China into the inner circle of these economic governance institutions. The IMF's
existing shareholders, for example, see a bigger role for rising developing countries as necessary to
renew the institution and get it through its current crisis of mission. At the IMF's meeting in Singapore in
September 2006, they agreed on reforms that will give China, Mexico, South Korea, and Turkey a greater
voice. As China sheds its status as a developing country (and therefore as a client of these institutions), it
will increasingly be able to act as a patron and stakeholder instead. Leadership in these organizations is
not simply a reflection of economic size (the United States has retained its voting share in the IMF even
as its economic weight has declined); nonetheless, incremental advancement within them will create
important opportunities for China.
46
G. John Ikenberry ‘8 (“The Rise of China and the Future of the West Can the Liberal System Survive?,”
Jan/feb., Foreign Affairs)
POWER SHIFT AND PEACEFUL CHANGE Seen in this light, the rise of China need not lead to a volcanic
struggle with the United States over global rules and leadership. The Western order has the potential to
turn the coming power shift into a peaceful change on terms favorable to the United States. But that will
only happen if the United States sets about strengthening the existing order. Today, with Washington
preoccupied with terrorism and war in the Middle East, rebuilding Western rules and institutions might
to some seem to be of only marginal relevance. Many Bush administration officials have been outright
hostile to the multilateral, rule-based system that the United States has shaped and led. Such hostility is
foolish and dangerous. China will become powerful: it is already on the rise, and the United States' most
powerful strategic weapon is the ability to decide what sort of international order will be in place to
receive it. The United States must reinvest in the Western order, reinforcing the features of that order
that encourage engagement, integration, and restraint. The more this order binds together capitalist
democratic states in deeply rooted institutions; the more open, consensual, and rule-based it is; and the
more widely spread its benefits, the more likely it will be that rising powers can and will secure their
interests through integration and accommodation rather than through war. And if the Western system
offers rules and institutions that benefit the full range of states -- rising and falling, weak and strong,
emerging and mature -- its dominance as an international order is all but certain. The first thing the
United States must do is reestablish itself as the foremost supporter of the global system of governance
that underpins the Western order. Doing so will first of all facilitate the kind of collective problem
solving that makes all countries better off. At the same time, when other countries see the United States
using its power to strengthen existing rules and institutions, that power is rendered more legitimate -and U.S. authority is strengthened. Countries within the West become more inclined to work with,
rather than resist, U.S. power, which reinforces the centrality and dominance of the West itself.
Renewing Western rules and institutions will require, among other things, updating the old bargains that
underpinned key postwar security pacts. The strategic understanding behind both NATO and
Washington's East Asian alliances is that the United States will work with its allies to provide security
and bring them in on decisions over the use of force, and U.S. allies, in return, will operate within the
U.S.-led Western order. Security cooperation in the West remains extensive today, but with the main
security threats less obvious than they were during the Cold War, the purposes and responsibilities of
these alliances are under dispute. Accordingly, the United States needs to reaffirm the political value of
these alliances -- recognizing that they are part of a wider Western institutional architecture that allows
states to do business with one another. The United States should also renew its support for wideranging multilateral institutions. On the economic front, this would include building on the agreements
and architecture of the WTO, including pursuing efforts to conclude the current Doha Round of trade
talks, which seeks to extend market opportunities and trade liberalization to developing countries. The
WTO is at a critical stage. The basic standard of nondiscrimination is at risk thanks to the proliferation of
bilateral and regional trade agreements. Meanwhile, there are growing doubts over whether the WTO
can in fact carry out trade liberalization, particularly in agriculture, that benefits developing countries.
These issues may seem narrow, but the fundamental character of the liberal international order -- its
commitment to universal rules of openness that spread gains widely -- is at stake. Similar doubts haunt a
host of other multilateral agreements -- on global warming and nuclear nonproliferation, among others 47
- and they thus also demand renewed U.S. leadership. The strategy here is not simply to ensure that the
Western order is open and rule-based. It is also to make sure that the order does not fragment into an
array of bilateral and "minilateral" arrangements, causing the United States to find itself tied to only a
few key states in various regions. Under such a scenario, China would have an opportunity to build its
own set of bilateral and "minilateral" pacts. As a result, the world would be broken into competing U.S.
and Chinese spheres. The more security and economic relations are multilateral and all-encompassing,
the more the global system retains its coherence. In addition to maintaining the openness and durability
of the order, the United States must redouble its efforts to integrate rising developing countries into key
global institutions. Bringing emerging countries into the governance of the international order will give it
new life. The United States and Europe must find room at the table not only for China but also for
countries such as Brazil, India, and South Africa. A Goldman Sachs report on the so-called BRICs (Brazil,
Russia, India, and China) noted that by 2050 these countries' economies could together be larger than
those of the original G-6 countries (Germany, France, Italy, Japan, the United Kingdom, and the United
States) combined. Each international institution presents its own challenges. The UN Security Council is
perhaps the hardest to deal with, but its reform would also bring the greatest returns. Less formal
bodies -- the so-called G-20 and various other intergovernmental networks -- can provide alternative
avenues for voice and representation.
G. John Ikenberry ‘8 (“The Rise of China and the Future of the West Can the Liberal System Survive?,”
Jan/feb., Foreign Affairs)
THE TRIUMPH OF THE LIBERAL ORDER The key thing for U.S. leaders to remember is that it may be
possible for China to overtake the United States alone, but it is much less likely that China will ever
manage to overtake the Western order. In terms of economic weight, for example, China will surpass
the United States as the largest state in the global system sometime around 2020. (Because of its
population, China needs a level of productivity only one-fifth that of the United States to become the
world's biggest economy.) But when the economic capacity of the Western system as a whole is
considered, China's economic advances look much less significant; the Chinese economy will be much
smaller than the combined economies of the Organization for Economic Cooperation and Development
far into the future. This is even truer of military might: China cannot hope to come anywhere close to
total OECD military expenditures anytime soon. The capitalist democratic world is a powerful
constituency for the preservation -- and, indeed, extension -- of the existing international order. If China
intends to rise up and challenge the existing order, it has a much more daunting task than simply
confronting the United States. The "unipolar moment" will eventually pass. U.S. dominance will
eventually end. U.S. grand strategy, accordingly, should be driven by one key question: What kind of
international order would the United States like to see in place when it is less powerful? This might be
called the neo-Rawlsian question of the current era. The political philosopher John Rawls argued that
political institutions should be conceived behind a "veil of ignorance" -- that is, the architects should
design institutions as if they do not know precisely where they will be within a socioeconomic system.
The result would be a system that safeguards a person's interests regardless of whether he is rich or
poor, weak or strong. The United States needs to take that approach to its leadership of the
international order today. It must put in place institutions and fortify rules that will safeguard its
48
interests regardless of where exactly in the hierarchy it is or how exactly power is distributed in 10, 50,
or 100 years. Fortunately, such an order is in place already. The task now is to make it so expansive and
so institutionalized that China has no choice but to become a full-fledged member of it. The United
States cannot thwart China's rise, but it can help ensure that China's power is exercised within the rules
and institutions that the United States and its partners have crafted over the last century, rules and
institutions that can protect the interests of all states in the more crowded world of the future. The
United States' global position may be weakening, but the international system the United States leads
can remain the dominant order of the twenty-first century.
49
Protectionism- Impact: War
Protectionism causes war.
Adorney 13 (Quoting Patrick J. McDonald: Fellow at CHB Center for International Politics at the
University of Pennsylvania, Senior researcher in economic causes of war and peace, Professor of
international relations, international political economy, and international security at the University of
Texas. Julian Adorney, economic historian, “Want Peace? Promote Free Trade,” October 15th,
http://www.fee.org/the_freeman/detail/want-peace-promote-free-trade)
Frédéric Bastiat famously claimed that “if goods don’t cross borders, soldiers will." Bastiat argued that free trade between countries could
reduce international conflict because trade forges connections between nations and gives each country an incentive to avoid war with its
trading partners. If every nation were an economic island, the lack of positive interaction created by trade could leave more room for conflict.
Two hundred years after Bastiat, libertarians take this idea as gospel. Unfortunately, not everyone does. But as recent
research shows,
the historical evidence confirms Bastiat’s famous claim. To Trade or to Raid In “Peace through Trade or Free Trade?” professor
Patrick J. McDonald, from the University of Texas at Austin, empirically tested whether greater levels of protectionism in a
country (tariffs, quotas, etc.) would increase the probability of international conflict in that nation. He used a tool
called dyads to analyze every country’s international relations from 1960 until 2000. A dyad is the interaction between one country and another
country: German and French relations would be one dyad, German and Russian relations would be a second, French and Australian relations
would be a third. He further broke this down into dyad-years; the relations between Germany and France in 1965 would be one dyad-year, the
relations between France and Australia in 1973 would be a second, and so on. Using these dyad-years, McDonald analyzed the behavior of
every country in the world for the past 40 years. His analysis showed a negative correlation between free trade and conflict: The more freely a
country trades, the fewer wars it engages in. Countries that engage in free trade are less likely to invade and less likely to be invaded. The
Causal Arrow Of course, this finding might be a matter of confusing correlation for causation. Maybe countries engaging in free trade fight less
often for some other reason, like the fact that they tend also to be more democratic. Democratic countries make war less often than empires
do. But McDonald controls for these variables. Controlling for a state’s political structure is important, because democracies and republics tend
to fight less than authoritarian regimes. McDonald also controlled for a country’s economic growth, because countries in a recession are more
likely to go to war than those in a boom, often in order to distract their people from their economic woes. McDonald even controlled for factors
like geographic proximity: It’s easier for Germany and France to fight each other than it is for the United States and China, because troops in the
former group only have to cross a shared border. The takeaway from McDonald’s analysis is that protectionism can actually lead to conflict.
McDonald found that a country in the bottom 10 percent for protectionism (meaning it is less protectionist than 90 percent of other countries)
is 70 percent less likely to engage in a new conflict (either as invader or as target) than one in the top 10 percent for protectionism.
Protectionism and War Why does protectionism lead to conflict, and why does free trade help to prevent it? The answers, though well-known
to classical liberals, are worth mentioning. First,
trade creates international goodwill. If Chinese and American businessmen trade
of goods also
on a regular basis, both sides benefit. And mutual benefit disposes people to look for the good in each other. Exchange
promotes an exchange of cultures. For decades, Americans saw China as a mysterious country with strange, even hostile values.
But in the 21st century, trade between our nations has increased markedly, and both countries know each other a little better now. iPodwielding Chinese teenagers are like American teenagers, for example. They’re not terribly mysterious. Likewise, the Chinese understand
democracy and American consumerism more than they once did. The countries may not find overlap in all of each other’s values, but trade has
helped us to at least understand each other. Trade helps to humanize the people that you trade with. And it’s tougher to want to go to war with
your human trading partners than with a country you see only as lines on a map. Second,
trade gives nations an economic
incentive to avoid war. If Nation X sells its best steel to Nation Y, and its businessmen reap plenty of profits in exchange, then
businessmen on both sides are going to oppose war. This was actually the case with Germany and France right before World War I. Germany
sold steel to France, and German businessmen were firmly opposed to war. They only grudgingly came to support it when German ministers
told them that the war would only last a few short months. German steel had a strong incentive to oppose war, and if the situation had
progressed a little differently—or if the German government had been a little more realistic about the timeline of the war—that incentive
might have kept Germany out of World War I. Third, protectionism promotes hostility. This is why free trade, not just aggregate
trade (which could be accompanied by high tariffs and quotas), leads to peace. If the (US) United States imposes a tariff on Japanese
automobiles, that tariff hurts Japanese businesses. It creates hostility in Japan toward the (US) United States. Japan might even retaliate with a
tariff on U.S. steel, hurting U.S. steel makers and angering our government, which would retaliate with another tariff. Both
countries
now have an excuse to leverage nationalist feelings to gain support at home; that makes outright war
50
with the other country an easier sell, should it come to that. In socioeconomic academic circles, this is called the Richardson
process of reciprocal and increasing hostilities; the United States harms Japan, which retaliates, causing the United States to retaliate again.
History shows that the Richardson process can easily be applied to protectionism. For instance, in the 1930s,
industrialized nations raised tariffs and trade barriers; countries eschewed multilateralism and turned
inward. These decisions led to rising hostilities, which helped set World War II in motion. These factors
help explain why free trade leads to peace, and protectionism leads to more conflict.
51
Protectionism- Impact: Trade Solves War
Trade empirically solves war and poverty.
Daniel Griswold ’10 (director of the Center for Trade Policy Studies at the Cato Institute, “Why
Populists Are Wrong About Impact of Free Trade,” Naples Daily News on January 5)
Tune in to cable TV, talk radio or the blogosphere in Florida and you will soon be hit over the head with the message that free trade is
destroying America. According to the economic populists on the left and right, imports and outsourcing threaten the wages, jobs and futures of
Main Street Americans. On trade, as on so much else, the populists have it wrong again. Free trade and globalization are great blessings to
families in Naples and across America. Trade is delivering lower prices and more variety to consumers while creating better-paying jobs for the
middle class. Beyond our shores, the
spread of economic openness is building a more peaceful, democratic and
humane world for our children. Now may seem an odd moment to tout the benefits of trade. After all, unemployment is 10 percent and
housing and manufacturing remain in a slump. The great recession of 2008-09 was not caused by trade, however, but by misguided monetary
and housing policies that were “Made in the USA.” “ On trade, as on so much else, the populists have it wrong again.” During difficult economic
times, import competition allows more American families to keep their heads above water by delivering lower prices on staples such as food,
clothing and shoes. The prices we pay for goods exposed to global trade tend to rise more slowly than inflation or even fall. The imported fresh
fruit and vegetables, T-shirts and discounted sneakers sold at big-box retailers are especially important in the budgets of poor and middle-class
families. Trade benefits producers by allowing Americans to sell our goods and services in growing markets abroad. Florida companies have
been especially successful exporting to Brazil, Mexico and the rest of Latin America. Florida ranks fifth among states in total value of exports,
with small and medium-sized companies accounting for almost two-thirds of state exports. For Americans worried about their jobs, it is a big lie
that we have been surrendering middle-class manufacturing jobs for low-paying service jobs. In fact, since 1991, two-thirds of the net new jobs
created in the U.S. economy have been in sectors such as health care, education and business and professional services where the average pay
is higher than in manufacturing. Knock on doors in a typical middle-class neighborhood in southern Florida and you will meet teachers,
managers, engineers, computer specialists, truck drivers, accountants, insurance and real-estate agents, registered nurses and other healthcare professionals and self-employed business owners. These are the occupations that now form the backbone of the American middle class.
Beyond American shores, the
past three decades of expanding trade and globalization have witnessed dramatic
global progress. Between 1981 and 2005, the share of the world’s population living on the equivalent of $1.25 a
day dropped by half, from 52 to 25 percent, according to the World Bank. During this same period, real gains have been made
in life expectancy, infant survival, nutrition and literacy. The most dramatic gains against poverty have occurred in those
countries, such as China and Chile, that have most aggressively opened themselves to the global
economy. As a global middle class has emerged, so too have more democratic forms of government.
Trade has spread tools of communication and spurred the growth of civil society as an alternative to
authoritarian government. As a result, the share of the world’s population living in countries that respect civil liberties and the right to
vote has climbed from 35 percent in 1973 to 46 percent today, according to Freedom House. Fewer people are dying in wars
today than in past decades, in large part because commerce has replaced military competition. Global
commerce has allowed nations to gain access to resources through trade rather than conquest, while
deeper economic integration has brought former enemies together and raised the cost of war. Even with
the ongoing conflicts in Iraq and Afghanistan, young American adults living today are far less likely to fight and die in wars than their
counterparts in the 1940s, ’50s and ’60s.
America and the world face daunting tasks today, as in generations past,
but expanding trade is part of the solution, not part of the problem. Americans should have the same warm feelings
toward free trade and globalization as they do toward iPods, e-mail, online shopping, a well-fed child going off to school and peace on Earth.
52
Leadership 2AC 1/
Advantage- Leadership:
A. Data credibility key to US economic security. This allows peaceful resolution of
international conflicts.
Laura K. Donohue ’15 (Georgetown University Law Center, “High Technology, Consumer Privacy, and
U.S. National Security,” http://scholarship.law.georgetown.edu/facpub/1457
)
The United States went on to emphasize its dealings with Asia and to sign an historic trade agreement with Japan.97 Expansionism, and the
economic benefits it brought, similarly proved central to U.S. national security. “Should [new possessions] be obtained,” Pierce asserted during
his Inaugural Address, “it will be through no grasping spirit, but with a view to obvious national interest and security, and in a manner entirely
consistent with the strictest observance of national faith.” From the 1898 Spanish-American War forward, the country promoted its national
interests through formative political, military, and economic engagement in the international arena. To
the extent that the NSA
programs, and public knowledge of them, has harmed the U.S. economy, they have harmed U.S.
national security. The country’s economic strength is part of what enables the United States to respond to
external and internal threats. The ability to defend the country against would-be aggressors requires
resources—e.g., to build and equip a military force, to move troops, to respond to attacks in whatever
form they may materialize. Many of the supplies needed to fend off overreaching by either states or
non-state actors derive not from government production, but from the private sector. To the extent that
a weak private sector emerges, the government’s ability to respond is harmed. Beyond this, economic
security allows the country the freedom to determine its international and domestic policies on the
merits, not on need. Where the United States is in a strong economic position, it is less vulnerable in
international negotiations, such as those related to trade. It is also in a politically superior position,
where it can use its wealth to accomplish the desired ends. A strong economy also ensures that citizens have their needs
met, with sufficient income levels for housing, food, clothing, and education. This, in turn, generates social and political stability, which allows
for the development of communities, which creates greater cohesion among citizens. It also contributes to the evolution of democratic
deliberations, reinforcing the rule of law. Economic security
allows for growth and innovation, which is fed by
education and opportunity. Innovation, in turn, allows the country to continue to adapt to the evolving
environment and international context. There are further considerations. But these suffice to illustrate the importance of
economic strength to U.S. national security writ large.
53
Leadership 2AC 2/
B. NSA programs spill-over to destroy US influence and support from allies.
Danielle Kehl ’14 (with Kevin Bankston, Robyn Greene & Robert Morgus, analysts at New America’s
Open Technology Institute, “Surveillance Costs: The NSA’s Impact on the Economy, Internet Freedom &
Cybersecurity,” July, https://static.newamerica.org/attachments/534-surveillance-costs-the-nsasimpact-on-the-economy-internet-freedom-cybersecurity/Surveilance_Costs_Final.pdf)
Beyond Internet Freedom, the NSA disclosures “have badly undermined U.S. credibility with many of its allies,”
Ian Bremmer argued in Foreign Policy in November 2013.214 Similarly, as Georg Mascolo and Ben Scott point out about the post-Snowden
world, “the shift from an open secret to a published secret is a game changer… it exposes the gap between what governments will tolerate
from one another under cover of darkness and what publics will tolerate from other governments in the light of day.”215 From
stifled
negotiations with close allies like France and Germany to more tense relations with emerging powers
including Brazil and China, the leaks have undoubtedly weakened the American position in international
relations, opening up the United States to new criticism and political maneuvering that would have been
far less likely a year ago.216 U.S. allies like France, Israel, and Germany are upset by the NSA’s actions, as
their reactions to the disclosures make clear.217 Early reports about close allies threatening to walk out of negotiations with
the United States—such as calls by the French government to delay EU-U.S. trade talks in July 2013 until the U.S. government answered
European questions about the spying allegations218—appear to be exaggerated, but there has certainly been fallout from the disclosures. For
months after the first Snowden leaks, German Chancellor Angela Merkel would not visit the United States until the two countries signed a “nospy” agreement—a document essentially requiring the NSA to respect German law and rights of German citizens in its activities. When Merkel
finally agreed come to Washington, D.C. in May 2014, tensions rose quickly because the two countries were unable to reach an agreement on
intelligence sharing, despite the outrage provoked by news that the NSA had monitored Merkel’s own communications.219 Even as Obama and
Merkel attempted to present a unified front while they threatened additional sanctions against Russia over the crisis in the Ukraine, it was
evident that relations are still strained between the two countries. While President Obama tried to keep up the appearance of cordial relations
at a joint press conference, Merkel suggested that it was too soon to return to “business as usual” when tensions still remain over U.S. spying
allegations.220 The Guardian called the visit “frosty” and “awkward.”221 The German Parliament has also begun hearings to investigate the
revelations and suggested that it is weighing further action against the United States.222 Moreover, the
disclosures have weakened
the United States’ relationship with emerging powers like Brazil, where the fallout from NSA surveillance
threatens to do more lasting damage. Brazilian President Dilma Rousseff has seized on the NSA disclosures as an opportunity to
broaden Brazil’s influence not only in the Internet governance field, but also on a broader range of geopolitical issues. Her decision not to
attend an October 2013 meeting with President Barack Obama at the White House was a direct response to NSA spying—and a serious, highprofile snub. In addition to cancelling what would have been the first state visit by a Brazilian president to the White House in nearly 20 years,
Rousseff’s decision marked the first time a world leader had turned down a state dinner with the President of the United States.223 In his
statement on the postponement, President Obama was forced to address the issue of NSA surveillance directly, acknowledging “that he
understands and regrets the concerns disclosures of alleged U.S. intelligence activities have generated in Brazil and made clear that he is
committed to working together with President Rousseff and her government in diplomatic channels to move beyond this issue as a source of
tension in our bilateral relationship.”224 Many observers have noted that the Internet Freedom agenda could be one of the first casualties of
the NSA disclosures. The U.S. government is fighting an uphill battle at the moment to regain credibility in international Internet governance
debates and to defend its moral high ground as a critic of authoritarian regimes that limit freedom of expression and violate human rights
online. Moreover, the
fallout from the NSA’s surveillance activities has spilled over into other areas of U.S.
foreign policy and currently threatens bilateral relations with a number of key allies. Going forward, it is
critical that decisions about U.S. spying are made in consideration of a broader set of interests so that
they do not impede—or, in some cases, completely undermine—U.S. foreign policy goals.
54
Leadership 2AC 3/
C. Robust Leadership is crucial to avoid competitive balancing and escalation.
Brooks, Ikenberry, and Wohlforth ’13 (Stephen, Associate Professor of Government at Dartmouth College, John
Ikenberry is the Albert G. Milbank Professor of Politics and International Affairs at Princeton University in the Department of Politics and the
Woodrow Wilson School of Public and International Affairs, William C. Wohlforth is the Daniel Webster Professor in the Department of
Government at Dartmouth College “Don’t Come Home America: The Case Against Retrenchment,” International Security, Vol. 37, No. 3 (Winter
2012/13), pp. 7–51)
A core premise of deep
engagement is that it prevents the emergence of a far more dangerous global security
environment. For one thing, as noted above, the United States’ overseas presence gives it the leverage to restrain partners
from taking provocative action. Perhaps more important, its core alliance commitments also deter
states with aspirations to regional hegemony from contemplating expansion and make its partners more
secure, reducing their incentive to adopt solutions to their security problems that threaten others and
thus stoke security dilemmas. The contention that engaged U.S. power dampens the baleful effects of anarchy is consistent with
influential variants of realist theory. Indeed, arguably the scariest portrayal of the war-prone world that would emerge absent the “American
Pacifier” is provided in the works of John Mearsheimer, who forecasts dangerous multipolar regions replete with security competition, arms
races, nuclear proliferation and associated preventive war temptations, regional rivalries, and even runs at regional hegemony and full-scale
great power war. 72 How do retrenchment advocates, the bulk of whom are realists, discount this benefit? Their arguments are complicated,
but two capture most of the variation: (1) U.S. security guarantees are not necessary to prevent dangerous rivalries and conflict in Eurasia; or
(2) prevention of rivalry and conflict in Eurasia is not a U.S. interest. Each response is connected to a different theory or set of theories, which
makes sense given that the whole debate hinges on a complex future counterfactual (what would happen to Eurasia’s security setting if the
United States truly disengaged?). Although a certain answer is impossible, each of these responses is nonetheless a weaker argument for
retrenchment than advocates acknowledge. The first response flows from defensive realism as well as other international relations theories
that discount the conflict-generating potential of anarchy under contemporary conditions. 73 Defensive realists maintain that the high
expected costs of territorial conquest, defense dominance, and an array of policies and practices that can be used credibly to signal benign
intent, mean that Eurasia’s major states could manage regional multipolarity peacefully without the American pacifier. Retrenchment would be
a bet on this scholarship, particularly in regions where the kinds of stabilizers that nonrealist theories point to—such as democratic governance
or dense institutional linkages—are either absent or weakly present. There are three other major bodies of scholarship, however, that might
give decisionmakers pause before making this bet. First is regional expertise. Needless to say, there is no consensus on the net security effects
of U.S. withdrawal. Regarding each region, there are optimists and pessimists. Few experts expect a return of intense great power competition
in a post-American Europe, but many doubt European governments will pay the political costs of increased EU defense cooperation and the
budgetary costs of increasing military outlays. 74 The
result might be a Europe that is incapable of securing itself from
various threats that could be destabilizing within the region and beyond (e.g., a regional conflict akin to
the 1990s Balkan wars), lacks capacity for global security missions in which U.S. leaders might want
European participation, and is vulnerable to the influence of outside rising powers. What about the other parts
of Eurasia where the United States has a substantial military presence? Regarding the Middle East, the balance begins to swing toward
pessimists concerned that states currently backed by Washington— notably Israel, Egypt, and Saudi Arabia—might take actions upon U.S.
retrenchment that would intensify security dilemmas. And concerning East Asia, pessimism regarding the region’s prospects without the
American pacifier is pronounced. Arguably the principal concern expressed by area experts is that Japan and South Korea are likely to obtain a
nuclear capacity and increase their military commitments, which could stoke a destabilizing reaction from China. It is notable that during the
Cold War, both South Korea and Taiwan moved to obtain a nuclear weapons capacity and were only constrained from doing so by a stillengaged United States. 75 The second body of scholarship casting doubt on the bet on defensive realism’s sanguine portrayal is all of the
research that undermines its conception of state preferences. Defensive realism’s optimism about what would happen if the United States
retrenched is very much dependent on its particular—and highly restrictive—assumption about state preferences; once we relax this
assumption, then much of its basis for optimism vanishes. Specifically, the prediction of post-American tranquility throughout Eurasia rests on
the assumption that security is the only relevant state preference, with security defined narrowly in terms of protection from violent external
attacks on the homeland. Under that assumption, the security problem is largely solved as soon as offense and defense are clearly
distinguishable, and offense is extremely expensive relative to defense. Burgeoning research across the social and other sciences, however,
undermines that core assumption: states have preferences not only for security but also for prestige, status, and other aims, and they engage in
trade-offs among the various objectives. 76 In addition, they define security not just in terms of territorial protection but in view of many and
varied milieu goals. It follows that even states that are relatively secure may nevertheless engage in highly competitive behavior. Empirical
55
studies show that this is indeed sometimes the case. 77 In sum, a bet on a benign postretrenchment Eurasia is a bet that leaders of major
countries will never allow these nonsecurity preferences to influence their strategic choices. To the degree that these bodies of scholarly
knowledge have predictive leverage, U.S. retrenchment would result in a significant deterioration in the security environment in at least some
of the world’s key regions. We have already mentioned the third, even more alarming body of scholarship. Offensive realism predicts that the
withdrawal of the American pacifier will yield either a competitive regional multipolarity complete with associated insecurity, arms racing, crisis
instability, nuclear proliferation, and the like, or bids for regional hegemony, which may be beyond the capacity of local great powers to contain
(and which in any case would generate intensely competitive behavior, possibly including regional great power war). Hence it is unsurprising
that retrenchment advocates are prone to focus on the second argument noted above: that avoiding wars and security dilemmas in the world’s
core regions is not a U.S. national interest. Few doubt that the United States could survive the return of insecurity and conflict among Eurasian
powers, but at what cost? Much of the work in this area has focused on the economic externalities of a renewed threat of insecurity and war,
which we discuss below. Focusing on the pure security ramifications, there are two main reasons why decisionmakers may be rationally
reluctant to run the retrenchment experiment. First, overall higher levels of conflict make the world a more dangerous place. Were Eurasia to
return to higher levels of interstate military competition, one would see overall higher levels of military spending and innovation and a higher
likelihood of competitive regional proxy wars and arming of client states—all of which would be concerning, in part because it would promote a
faster diffusion of military power away from the United States. Greater regional insecurity could well feed proliferation cascades, as states such
as Egypt, Japan, South Korea, Taiwan, and Saudi Arabia all might choose to create nuclear forces. 78 It is unlikely that proliferation decisions by
any of these actors would be the end of the game: they would likely generate pressure locally for more proliferation. Following Kenneth Waltz,
many retrenchment advocates are proliferation optimists, assuming that nuclear deterrence solves the security problem. 79 Usually carried out
in dyadic terms, the debate over the stability of proliferation changes as the numbers go up. Proliferation optimism rests on assumptions of
rationality and narrow security preferences. In social science, however, such assumptions are inevitably probabilistic. Optimists assume that
most states are led by rational leaders, most will overcome organizational problems and resist the temptation to preempt before feared
neighbors nuclearize, and most pursue only security and are risk averse. Confidence in such probabilistic assumptions declines if the world were
to move from nine to twenty, thirty, or forty nuclear states. In addition, many of the other dangers noted by analysts who are concerned about
the destabilizing effects of nuclear proliferation—including the risk of accidents and the prospects that some new nuclear powers will not have
truly survivable forces—seem prone to go up as the number of nuclear powers grows. 80 Moreover, the risk of “unforeseen crisis dynamics”
that could spin out of control is also higher as the number of nuclear powers increases. Finally, add to these concerns the enhanced danger of
nuclear leakage, and a world with overall higher levels of security competition becomes yet more worrisome. The argument that maintaining
Eurasian peace is not a U.S. interest faces a second problem. On widely accepted realist assumptions, acknowledging that U.S. engagement
preserves peace dramatically narrows the difference between retrenchment and deep engagement. For many supporters of retrenchment, the
optimal strategy for a power such as the United States, which has attained regional hegemony and is separated from other great powers by
oceans, is offshore balancing: stay over the horizon and “pass the buck” to local powers to do the dangerous work of counterbalancing any local
rising power. The United States should commit to onshore balancing only when local balancing is likely to fail and a great power appears to be a
credible contender for regional hegemony, as in the cases of Germany, Japan, and the Soviet Union in the midtwentieth century. The
problem is that China’s rise puts the possibility of its attaining regional hegemony on the table, at least in
the medium to long term. As Mearsheimer notes, “The United States will have to play a key role in countering China, because its Asian
neighbors are not strong enough to do it by themselves.” 81 Therefore, unless China’s rise stalls, “the United States is likely to act toward China
similar to the way it behaved toward the Soviet Union during the Cold War.” 82 It follows that the
United States should take no
action that would compromise its capacity to move to onshore balancing in the future. It will need to
maintain key alliance relationships in Asia as well as the formidably expensive military capacity to
intervene there. The implication is to get out of Iraq and Afghanistan, reduce the presence in Europe, and pivot to Asia— just what the
United States is doing. 83 In sum, the argument that U.S. security commitments are unnecessary for peace is countered by a lot of scholarship,
including highly influential realist scholarship. In addition, the
argument that Eurasian peace is unnecessary for U.S.
security is weakened by the potential for a large number of nasty security consequences as well as the
need to retain a latent onshore balancing capacity that dramatically reduces the savings retrenchment
might bring. Moreover, switching between offshore and onshore balancing could well be difªcult. Bringing together the thrust of many of
the arguments discussed so far underlines the degree to which the case for retrenchment misses the underlying logic of
the deep engagement strategy. By supplying reassurance, deterrence, and active management, the
United States lowers security competition in the world’s key regions, thereby preventing the emergence
of a hothouse atmosphere for growing new military capabilities. Alliance ties dissuade partners from
ramping up and also provide leverage to prevent military transfers to potential rivals. On top of all this, the
United States’ formidable military machine may deter entry by potential rivals. Current great power military expenditures as a percentage of
GDP are at historical lows, and thus far other major powers have shied away from seeking to match top-end U.S. military capabilities. In
addition, they have so far been careful to avoid attracting the “focused enmity” of the United States. 84 All of the world’s most modern
militaries are U.S. allies (America’s alliance system of more than sixty countries now accounts for some 80 percent of global military spending),
and the gap between the U.S. military capability and that of potential rivals is by many measures growing rather than shrinking. 85
56
Leadership: Credibility Key
US credibility is destroyed on all issues because domestic surveillance contradicts our
stated values.
Danielle Kehl ’14 (with Kevin Bankston, Robyn Greene & Robert Morgus, analysts at New America’s
Open Technology Institute, “Surveillance Costs: The NSA’s Impact on the Economy, Internet Freedom &
Cybersecurity,” July, https://static.newamerica.org/attachments/534-surveillance-costs-the-nsasimpact-on-the-economy-internet-freedom-cybersecurity/Surveilance_Costs_Final.pdf)
Mandatory data localization proposals are just one of a number of ways that foreign governments have reacted to NSA surveillance in a manner
that threatens U.S. foreign policy interests, particularly with regard to Internet Freedom. There has been a quiet tension between how the U.S.
approaches freedom of expression online in its foreign policy and its domestic laws ever since Secretary of State Hillary Clinton effectively
launched the Internet Freedom agenda in January 2010.170 But the
NSA disclosures shined a bright spotlight on the
contradiction: the U.S. government promotes free expression abroad and aims to prevent repressive
governments from monitoring and censoring their citizens while simultaneously supporting domestic
laws that authorize surveillance and bulk data collection. As cybersecurity expert and Internet governance scholar Ron
Deibert wrote a few days after the first revelations: “There are unintended consequences of the NSA scandal that will undermine U.S. foreign
policy interests – in particular, the ‘Internet Freedom’ agenda espoused by the U.S. State Department and its allies.”171 Deibert accurately
predicted that the news would trigger reactions from both policymakers and ordinary citizens abroad, who would begin to question their
dependence on American technologies and the hidden motivations behind the United States’ promotion of Internet Freedom. In some
countries, the scandal would be used as an excuse to revive dormant debates about dropping American companies from official contracts,
score political points at the expense of the United States, and even justify local monitoring and surveillance. Deibert’s speculation has so far
proven quite prescient. As we will describe in this section, the
ongoing revelations have done significant damage to the
credibility of the U.S. Internet Freedom agenda and further jeopardized the United States’ position in
the global Internet governance debates. Moreover, the repercussions from NSA spying have bled over from
the Internet policy realm to impact broader U.S. foreign policy goals and relationships with
government officials and a range of other important stakeholders abroad. In an essay entitled, “The End of
Hypocrisy: American Foreign Policy in the Age of Leaks,” international relations scholars Henry Farrell and Martha Finnemore argue that a
critical, lasting impact of information provided by leakers like Edward Snowden is “the documented confirmation they provide of what the
United States is actually doing and why. When
these deeds turn out to clash with the government’s public rhetoric,
as they so often do, it becomes harder for U.S. allies to overlook Washington’s covert behavior and
easier for U.S. adversaries to justify their own.”172 Toward the end of the essay, Farrell and Finnemore suggest, “The U.S.
government, its friends, and its foes can no longer plausibly deny the dark side of U.S. foreign policy and
will have to address it head-on.” Indeed, the U.S. is currently working to repair damaged bilateral and multilateral relations with
countries from Germany and France to Russia and Israel,173 and it is likely that the effects of the NSA disclosures will be
felt for years in fields far beyond Internet policy.
57
Leadership: Innovation Key
Innovation and startups are key to US global leadership.
Robert Litan ‘15 (Senior Fellow at the Brookings Institution, “Start-Up Slowdown How the
United States Can Regain Its Entrepreneurial Edge,” Foreign Affairs, Jan/Feb)
Americans like to think of their country as a cradle of innovation. After all, the United States has produced many of the world's finest
entrepreneurs, from Andrew Carnegie and Henry Ford to Steve Jobs and Mark Zuckerberg. The American obsession with innovation has even
invaded popular culture. Shark Tank, a reality television show in which entrepreneurs pitch to potential angel investors, has reached its sixth
season and draws more than six million viewers a week. Silicon Valley, a new comedy on HBO, follows the founders of a technology start-up as
they attempt to strike it rich. Meanwhile, the nearcelebrity status of prominent tech entrepreneurs, such as Zuckerberg and Elon Musk, has
spurred interest in the so-called STEM subjects -science, technology, engineering, and math-and in entrepreneurship more generally. The
numbers, however, tell a different story. Over
the past 30 years, the rate of start-up formation in the United States
has slowed markedly, and the technology industry has come to be dominated by older companies. This
presents a risk to innovation, because the most transformative leaps forward tend to come not from
established firms but from entrepreneurs with little to lose. Indeed, start-ups commercialized most of
the seminal technologies of the past several centuries, including the car, the airplane, the telegraph, the
telephone, the computer, and the Internet search engine. If the United States wishes to reclaim its status as an innovation
hub, it must reform a wide swath of policies-including those covering immigration, business regulation, health care, and education-to support
new businesses. A NATIONAL DECLINE Data on start-ups in the United States were not regularly compiled until 2008, when the U.S. Census
Bureau created the Business Dynamics Statistics database, which tracks firm start-ups and shutdowns across the country. Using the data from
1977 to 2012, my colleague Ian Hathaway and I have published a series of reports for the Brookings Institution highlighting a startling
observation: the ratio of new firms to all firms, or the "start-up rate," has been steadily decreasing. In 1978, start-ups -defined in the database
as companies less than a year old-accounted for nearly 15 percent of all U.S. firms; by 2011, that figure had slipped to just eight percent. For the
first time in three decades, business deaths exceeded business births. This national decline mirrored similar shifts in all 50 states and in all but
one of the country's 366 largest metropolitan centers. This includes California, with its two wellsprings of innovation, Silicon Valley and the Los
Angeles-Orange County region, where entrepreneurship rates once soared above the national average. The downward trend has affected all
major industries, even the life-sciences sector, which includes pharmaceutical and medical-device businesses and has traditionally played a
major role in new job creation. In 1990, around 2,600 new life-sciences firms started up, a number that grew to roughly 3,000 in 1997; by 2011,
that number had fallen to 1,995. Fewer start-ups has meant fewer high-growth firms, defined by the Organization for Economic Cooperation
and Development as companies that experience three consecutive years of at least a 20 percent increase in the number of people they employ.
According to researchers at the U.S. Bureau of Labor Statistics, the percentage of U.S. firms that met that criterion dropped from roughly three
percent in 1994-97 to 1.5 percent in 2008-11. This drop is likely related to the decline in start-ups that took place during the same period. These
changes are surprising not only because they run counter to the image of the U.S. economy as highly entrepreneurial but also because they
took place during a revolution in information technology that substantially lowered the costs of launching and expanding new businesses,
thanks to cheaper software and hardware, a more global Internet, and the savings afforded by data storage in the "cloud." Granted, the Census
Bureau's data set excludes firms where the founder is the only employee, which ignores the large and growing number of people who write
smartphone applications or sell goods on online platforms such as eBay or Etsy. But there is a good reason for this exclusion: although
individual entrepreneurs deserve applause, they do not benefit the economy the way larger firms do. Firms with at least one employee besides
the founder have the potential to grow and, since 1980, have accounted for the vast majority of new jobs in the United States.
As newer
firms have become scarcer, the number of older firms has multiplied. The proportion of U.S. companies
considered mature, meaning at least 16 years old, rose from 23 percent of all firms in 1992 to 34 percent in 2011.
Over the same period, the percentage of the work force employed at mature firms rose as well, from 60 percent to 72 percent. An optimist
might conclude that the U.S. economy has simply rewarded economies of scale. In this view, a greater share of older firms represents a net
benefit, since firms with more experience are more likely to succeed and provide stable employment. But aging
firms, like aging
people, are also more risk averse. When they innovate, they are more likely to aim for incremental
improvement rather than creative destruction or disruption. They also tend to be larger, more
bureaucratic, and less flexible than start-ups when faced with changing technology and shifting
consumer preferences. And older, more entrenched firms are harder to compete with than younger ones, which may explain why a
larger share of older firms has coincided with a smaller share of start-ups. Although similar data do not exist for firms in other countries, there
is reason to worry that the United States may fall behind. The Organization for Economic Cooperation and Development began publishing
58
global data on start-up rates in 2011, but the data go back only to 2006, two years before the CLOSING THE GAP Even if the United States
successfully boosts the formation of new companies, it will have to contend with the dark side of innovation: the wealth inequalities that
sometimes accompany technological change. Advances in
robotics and information technology, in particular, have
increased the demand for employees with strong technical backgrounds and curtailed the need for
unskilled labor. Some economists believe that the revolution in information technology may end up benefiting only those workers whose
salaries place them in the top ten to 20 percent of the income spectrum, thus widening the already substantial income gap between the
wealthy and the poor. It is not yet clear what impact an influx of start-ups would have on this problem-but there is reason to suspect it could
make things worse. In recent years, hugely profitable start-ups have created relatively few new jobs and done little to spread the wealth. The
popular text-messaging service WhatsApp employed only 55 people when Facebook acquired it for $19 billion last year; Instagram, a photosharing social networking site, had only 13 employees when Facebook bought it for $1 billion in 2012. If the majority of new companies
resemble these successful technology firms, then any start-up renaissance will only magnify inequality. In addition, innovations in automation,
robotics, and data processing could eliminate millions of jobs in the coming decades, pushing many workers into lowerwage positions or out of
the labor force altogether. Closing the wage gap, or at least reversing its growth, will require significantly overhauling public education systems
so that they can better teach technological literacy. Being able to write computer code will soon be as important as being able to write in
English, and students should begin learning to code as early as elementary school. Better education represents the best chance to level the
playing field and expand the number of potential entrepreneurs. An entrepreneurial revolution will require more than just coders, however. As
the Nobel Prize-winning economist Edmund Phelps has argued, innovation requires the teaching of not just technical skills but also the
humanities and the arts. Had Jobs not taken a calligraphy class at Reed College, for example, he might not have insisted on including a wide
array of fonts in Apple computersan innovation that gave his company an early edge over its competitors. Since Washington has little control
over education policy at the state level, reform will have to proceed incrementally through experimentation in local school districts. The federal
government and nongovernmental organizations should support and publicize these experiments so that states can learn from their successes
and failures. Entrepreneurs create the future and boost national economies. For
the United States, economic strength is key
to maintaining and strengthening its status as a world leader. Rousing the country from its
entrepreneurial slumber will require deep structural change, but the stakes are high. In the balance
hangs the welfare of future generations and the global leadership of the United States.
59
CASE Extensions
60
Inherency: Credibility Lost
US Data credibility is Being destroyed: Nothing has reformed the NSA enough to allow
US industry to clear their name.
Laura K. Donohue ’15 (Georgetown University Law Center, “High Technology, Consumer Privacy, and
U.S. National Security,” http://scholarship.law.georgetown.edu/facpub/1457
)
D. Internet Governance From the inception of the Internet, the U.S.-based Internet Corporation for Assigned Names and Numbers (ICANN) has
governed the web. As time has progressed, and the Internet has become part of the global infrastructure, there have been calls from several
nations to end U.S. dominance and to have the International Telecommunication Union (ITU), an entity within the UN, become the governing
body. 66
The global backlash against the NSA programs raises question about the future of Internet
governance. The revelations have not only contributed further to such calls, but they have spurred
increased discussion of the need for regional Internet control.67 Over the past decade, three main groups have emerged
to vie for control of the Internet. The first is centered on states, who consider the question in light of national sovereignty. It is comprised of
developing countries as well as large, emerging economies like China, Russia, Brazil, and South Africa.68 It overlaps significantly with the Group
of 77 (consisting of more than 100 countries which emerged from the non-aligned movement in the Cold War). These states are critical of the
United States and its dominant role in Internet governance and oppose private sector preeminence, on the grounds that they are pawns of the
United States.69 Emphasis instead is placed on the UN and the ITU as potential repositories of Internet authority. The second group is civil
society. The third is the private sector. These groups tend to support what is referred to as a “multistakeholder model:” i.e., native Internet
governance institutions that are generally nonprofit entities in the private sector. 70 Membership includes both technical experts (e.g., ICANN
and Regional Internet Registries), as well as multinational corporations (e.g., Microsoft, Facebook, and AT&T). Prior to the Snowden releases,
Japan, the EU, and the United States found themselves in this camp. Civil society organizations emphasize Internet freedom, consumer privacy,
and user rights—often bringing them into conflict with the states who comprise the G77-type group.71 As one commentator explains, “This
alignment of actors has been in place since the 2003 World Summit on the Information Society (WSIS) meetings. But
the Snowden NSA
revelations seem to have destabilized this settled political alignment.”72 In the wake of the Snowden documents,
ICANN and Brazil have formed an alliance, condemning U.S. actions. Concern about the latest revelations spurred a major conference in April
2014, the Global Multistakeholder Conference on the Future of Internet Governance. The purpose of the meeting, which was held in Sao Paulo,
was “to produce universal internet principles and an institutional framework for multi-stakeholder Internet governance.”73 It is not clear how
the newest shifts will be resolved—either temporarily or in the future. But significant questions have been raised: How should the Internet
governance be structured to ensure legitimacy and compliance? Who gets to make the decision about what such governance looks like? Which
bodies have the authority to establish future rules and procedures? How are such bodies constituted and who selects their membership? These
questions are fundamentally at odds with the decentralization tendencies in the Internet—tendencies that have been exaggerated postSnowden as a result of regional efforts to expand the local sphere of influence and to protect consumer and state privacy from U.S.
surveillance.
The U.S. government’s failure to address the situation domestically has undermined the tech
industry. Despite calls from the companies for legislative reform to address the breadth of the NSA
programs,74 there has been no significant shift that would allow companies to approach their
customers to say, with truth, that the situation has changed. Resultantly, American companies are losing
not just customers, but also the opportunity to submit proposals for contracts for which they previously
would have been allowed to compete.75 The future of Internet governance hangs in the balance.
61
Economy- Localization: SQ = Fragmentation 1/
On-Balance: the forces for localization are playing the strong side of the politics.
Jonah Force Hill ‘14 (technology and international affairs consultant based in San Francisco and
a Fellow of the Global Governance Futures program, “THE GROWTH OF DATA
LOCALIZATION POST-SNOWDEN: ANALYSIS AND RECOMMENDATIONS FOR U.S.
POLICYMAKERS AND BUSINESS LEADERS”)
Localization Proposals It remains to be seen whether lobbying or litigation will salvage the
overseas reputations of the American tech companies, or protect their market shares abroad.
Data localization proposals continue to be floated and seriously considered in several major
markets crucial to the companies’ bottom lines. The problem for U.S. tech companies is that
there are actually a wide variety of forces and interest groups driving the data localization
movement, and many of these forces and groups have objectives beyond the professed goals of
data protection and counter-NSA surveillance. One can easily discern in foreign governments’
interest in data localization a combination of anti-American populism, a desire for greater ease of
foreign (and domestic) surveillance, and a sense among policymakers and business that the
Snowden backlash presents an opportunity to cultivate domestic cloud and other tech services
industries, industries that have long been outcompeted by American tech companies in their
home markets—old-fashioned protectionism tailored for the digital age. A quick look at four
select localization studies25 reveals this complex mix of purposes, and helps to explain why U.S.
technology firms – as well as those organizations and individuals abroad who also recognize the
problems data localization laws would introduce – are having such a difficult time arguing their
case, despite the logic working in their favor and against the policies they are contesting.
62
Economy- Localization: SQ = Fragmentation 2/
NSA Leaks derail cooperative global internet regulation. Localization will be the new
trend without reform.
Danielle Kehl ’14 (with Kevin Bankston, Robyn Greene & Robert Morgus, analysts at New America’s
Open Technology Institute, “Surveillance Costs: The NSA’s Impact on the Economy, Internet Freedom &
Cybersecurity,” July, https://static.newamerica.org/attachments/534-surveillance-costs-the-nsasimpact-on-the-economy-internet-freedom-cybersecurity/Surveilance_Costs_Final.pdf)
Consequently, NSA
surveillance has shifted the dynamics of the Internet governance debate in a potentially
destabilizing manner. The Snowden revelations “have also been well-received by those who seek to discredit existing approaches to
Internet governance,” wrote the Center for Democracy & Technology’s Matthew Shears. “There has been a long-running antipathy among a
number of stakeholders to the United States government’s perceived control of the Internet and the dominance of US Internet companies.
There has also been a long-running antipathy, particularly among some governments, to the distributed and open management of the
Internet.”191 Shears points out that evidence
of the NSA’s wide-ranging capabilities has fueled general concerns
about the current Internet governance system, bolstering the arguments of those calling for a new
government-centric governance order. At the UN Human Rights Council in September 2013, the representative from Pakistan—
speaking on behalf of Cuba, Venezuela, Zimbabwe, Uganda, Ecuador, Russia, Indonesia, Bolivia, Iran, and China—explicitly linked the
revelations about surveillance programs to the need for reforming Internet governance processes and institutions to give governments a larger
role.192 Surveillance issues continued to dominate the conversation at the 2013 Internet Governance Forum in Bali as well, where “debates on
child protection, education and infrastructure were overshadowed by widespread concerns from delegates who said the public’s trust in the
internet was being undermined by reports of US and British government surveillance.”193
Further complicating these
conversations is the fact that several of the institutions that govern the technical functions of the
Internet are either tied to the American government or are located in the United States. Internet governance
scholar Milton Mueller has described how the reaction to the NSA disclosures has become entangled in an already contentious Internet
governance landscape. Mueller argues that, in addition to revealing the scale and scope of state surveillance and the preeminent role of the
United States and its partners,
the NSA disclosures may push other states toward a more nationally partitioned
Internet and “threaten… in a very fundamental way the claim that the US had a special status as neutral
steward of Internet governance.”194 These concerns were publicly voiced in October 2013 by the heads of a number of key
organizations, including the President of the Internet Corporation for Assigned Names and Numbers (ICANN) and the chair of the Internet
Engineering Task Force (IETF), in the Montevideo Statement on the Future of Internet Cooperation. Their statement expressed “strong concern
over the undermining of the trust and confidence of Internet users globally due to recent revelations of pervasive monitoring and surveillance”
and “called for accelerating the globalization of ICANN and Internet Assigned Numbers Authority (IANA) functions, towards an environment in
which all stakeholders, including all governments, participate on an equal footing.”195 In particular, the process of internationalizing ICANN—
which has had a contractual relationship with the Commerce Department’s National Telecommunications and Information Association (NTIA)
since 1998—has progressed in recent months.
63
Economy- Localization: Country List
Massive flood of local data mandates is emerging.
Business Roundtable ‘12 (“Promoting Economic Growth through Smart Global Information
Technology Policy The Growing Threat of Local Data Server Requirements,” an association of
chief executive officers of leading U.S. companies with over $6 trillion in annual revenues and
more than 14 million employees)
Local data server requirements present current and emerging threats. The following are examples of this
emerging threat, in which governments either are proposing or have implemented local data server
requirements. This list is not exhaustive, but rather illustrative, and demonstrates the harmful trend that
should be recognized and reversed. In some examples (not all), the stated rationale for the law is a broad
national security concern, yet there are indications of an industrial policy motivation. The examples are
provided from the collective knowledge and experience of BRT member companies. Australia The
government presented a bill in November 2011 that would require local data centers for the personally
controlled e-health record system. Brunei Brunei has data residency laws, meaning that companies can store the data they collect only on servers
in country. China China has local data server requirements due to national security, currency control and industrial policy. China has also put in
place an array of laws and regulations that establish a local entity, China UnionPay (CUP), as the monopoly network for processing RMBdenominated transactions in China.2 The United States is currently challenging the CUP monopoly in the World
Trade Organization. If the United States prevails, then it must ensure that China does not seek to perpetuate the entrenched position of
CUP by imposing a local data server requirement. China has data residency laws that declare companies can store the data they collect only on
servers in country. Greece In February 2011, Greece passed a law that states, in part, “Data generated and stored on physical media, which are
located within the Greek territory, shall be retained within the Greek territory.” The European Commission has criticized this action by Greece as
inconsistent with the E.U. single market, but the rule remains in effect. Business Roundtable: Promoting Economic Growth through Smart Global
Information Technology Policy 6 India The government has proposed a measure that would require companies to locate part of their IT
infrastructure within the country to provide investigative agencies with ready access to encrypted data on their servers. This measure also will
require that data of Indian citizens, government organizations and firms hosted on the servers of these companies not be moved out of the
country. Failure to comply with this rule will be a criminal offence and company officials will face prosecution. Indonesia In 2009, the
Ministry of Communication and Information Technology of the Republic of Indonesia proposed a draft government regulation to implement law
no. 11 (2008) concerning electronic information and transactions. One of the provisions, article 25.3, stipulates that every electronic system’s
provider for public services that operates a data center is required to locate its data center and disaster recovery center within the Indonesian
territory. This draft regulation will become law if it is “harmonized” with the Ministry of Justice and the Ministry of Economic Affairs.
Malaysia Malaysia passed a local data server requirements law but has not yet implemented it . Nigeria Nigeria has adopted Guidelines on
Point-of-Sale Card Acceptance Services, which require that all point-of-sale and ATM domestic transactions be processed through a local switch
(essentially, a server) and prohibit routing of transactions for processing outside the country. The guidelines also require centralized switching of
domestic transactions. Russia Russia has adopted legislation requiring that infrastructure necessary to core payment processing services be
located on the territory of the Russian Federation. South The Financial Services Commission is considering regulations that would require
insurance companies to maintain servers in country for company financial data and restrict transfers of such data (not pertaining to policy holders
or employees) outside of South Korea’s borders. This is despite provisions in the KORUS Free Trade Agreement, scheduled to take effect
two years from entry into force. The free trade agreement permits the sending of data across the border intra-company or to third parties. The data
transfer provision was intended to establish an innovative precedent in Asia, thereby allowing U.S. financial services companies to integrate
regional and global operations by using established data processing hubs. Ukraine Ukraine is considering laws and regulations that would
establish a domestic monopoly for processing domestic payment transactions and exclude foreign networks from providing processing services.
Venezuela Venezuela has local data server requirements due to currency control for debit transactions. Venezuela has adopted a law that
effectively requires in-country processing of domestic payment transactions. Vietnam Vietnam has data residency laws, meaning that
companies can store the data they collect only on servers in country. Korea Local data server requirements are misguided, overbroad in impact
and often inadvertently harmful policies. Several justifications have been offered for imposing local data server requirements. In some cases,
local data server requirements are viewed as necessary to advance national industrial policy and support national service providers. In other cases,
the stated justification is to ensure that regulatory, law enforcement or national security personnel can access data residing on the servers. In still
other cases, governments assert that they are protecting personal privacy or restricting access to banned or unlawful content. Although some of
these various objectives may be legitimate if they are narrowly tailored to address the genuine harm, the blanket imposition of local data
server requirements can unnecessarily damage service providers and consumers alike and slow economic
64
growth. To avoid such disruption, governments should seek to narrowly tailor their regulatory requirements to meet essential needs and should
avoid ill-advised, blanket local data server requirements. Governments should also ensure that their reviews, if any, of the national security
implications of foreign investments focus exclusively on genuine national security risks.
65
Economy- Localization: Credibility Key
Only curtailing surveillance can restore credibility and avoids runaway data
localization.
Laura K. Donohue ’15 (Georgetown University Law Center, “High Technology, Consumer Privacy, and
U.S. National Security,” http://scholarship.law.georgetown.edu/facpub/1457
)
C. Data Localization and Data Protection
Over the past eighteen months, countries around the world have
increasingly adopted data localization laws, restricting the storage, analysis, and transfer of digital
information to national borders.45 To some extent, the use of barriers to trade as a means of incubating tech-based industries
predated the Snowden releases.46 In the aftermath of the leaks, the dialogue has gained momentum. The asserted purpose is to protect
government data and consumer privacy. As of the time of writing, China, Greece, Malaysia, Russia, South Korea, Venezuela, Vietnam, Iran, and
others have already implemented local data server requirements. 47 Turkey has introduced new privacy regulations preventing the transfer of
personal data (particularly locational data) overseas.48 Others, such as Argentina,
India, and Indonesia are actively
considering new laws, even as Brazilian president, Dilma Rousseff, has been promoting a law that would
require citizens’ personal data to be stored within domestic bounds. 49 Germany and France are
considering a Schengen routing system, retaining as much online data in the European Union as
possible.50 As a regional matter, the European Union (EU) Commission’s Vice President, Viviane Reding, is pushing for Europe to adopt more
expansive privacy laws.51 In March 2014, the European Parliament passed the Data Protection Regulation and Directive, imposing strict limits
on the handling of EU citizens’ data.52 Reding announced, “The message the European Parliament is sending is unequivocal: This reform is a
necessity, and now it is irreversible. Europe’s directly elected parliamentarians have listened to European citizens and European businesses and,
with this vote, have made clear that we need a uniform and strong European data protection law, which will. . . strengthen the protection of
our citizens.” 53 Regardless of where the information is based, those handling the data must obtain the consent of the data subjects to having
their personal information processed. They also retain the right to later withdraw consent. Those violating the directive face steep fines,
including up to five percent of revenues.54 Apart from the new directive, the Civil Liberties, Justice, and Home Affairs Committee of the
European Parliament passed a resolution calling for the end of the US/EU Safe Harbor agreement. 55 Some 3000 U.S. companies rely on this
framework to conduct business with the EU.56 In May 2014, the EU Court of Justice ruled that users have a “right to be forgotten” in their use
of online search engines. 57 The case derived from a complaint lodged against a Spanish newspaper, as well as Google Spain and Google Inc.,
claiming that notice of the plaintiff’s repossessed home on Google’s search engine infringed his right to privacy because the incident had been
fully addressed years before. He requested that the newspaper be required to remove or alter the pages in question to excise data related to
him, and that Google Spain or Google Inc. be required to remove the information.58 The EU court found that even where the physical server of
a company processing information is not located in Europe, as long as the company has a branch or subsidiary and is doing business in a
Member state, the 1995 Data Protection Directive applies.59 Because search engines contain personal data, they are subject to such data
protection laws. The court recognized that, under certain conditions, individuals have the “right to be forgotten”—i.e., the right to request that
search engines remove links containing personal information. Data that is inaccurate, inadequate, irrelevant, or excessive may be removed. Not
absolute, the right to be forgotten must be weighed against competing rights, such as freedom of expression and the media.60 Various
country-specific privacy laws are similarly poised to be introduced. Their potential economic impact is
substantial. The Information Technology and Innovation Fund estimates that data privacy rules could retard the growth of
the technology industry by up to four percent, impacting U.S. companies’ ability to expand and forcing
them out of existing markets.61 The current dialogue is merely the latest in a series of growing concerns about the absence of
effective privacy protections within the U.S. legal regime. High tech companies appear to see this as a concern. As Representative Justin Amash
(MI-R) has explained, “Businesses increasingly recognize that our government’s out-of-control surveillance hurts their bottom line and costs
American jobs. It violates the privacy of their customers and it erodes American businesses’ competitive edge.”62 It is with the impact of lack of
privacy controls in the surveillance sphere on U.S. competitiveness in mind that, in December 2013, some of the largest U.S. Internet companies
launched a campaign to pressure the government to reform the NSA programs. Microsoft General Counsel Brad Smith explained: “People
won’t use technology they don’t trust.” He added, “Governments have put this trust at risk, and
governments need to help restore it.”63 Numerous high technology CEOs supported the initiative, such Google’s Larry Page,
Yahoo’s Marissa Mayer, and Facebook’s Mark Zuckerberg. 64 The aim is to limit government authority to collect user data, to institute better
oversight and accountability, to ensure greater transparency about what the government is requesting (and obtaining), to increase respect for
66
the free flow of data across borders, and to avoid political clashes on a global scale. Mayer, explained, “Recent
revelations about
government surveillance activities have shaken the trust of our users, and it is time for the United States
government to act to restore the confidence of citizens around the world.”65
67
Economy- Localization: Impact- Kills The Internet 1/
Data localization is incompatible with modern IP routing. It will literally Break The
Internet. [Voter for Education]
Jonah Force Hill ‘14 (technology and international affairs consultant based in San Francisco and
a Fellow of the Global Governance Futures program, “THE GROWTH OF DATA
LOCALIZATION POST-SNOWDEN: ANALYSIS AND RECOMMENDATIONS FOR U.S.
POLICYMAKERS AND BUSINESS LEADERS”)
Free Expression and Internet Freedoms Are Not Well Served Most troubling of all the potential harms of data localization is its effect on free
expression and Internet freedom. This is ironic, in that to many of its advocates, data localization is a remedy to the threat posed by the NSA to
free expression and Internet freedom. I suggest that the opposite is actually true, that the “remedy” only serves to make the danger greater. The
Internet and other online media have become indispensable tools for individuals to communicate globally,
and have furthered individual participation in the political process, increased transparency of
governmental activities, and promoted fundamental rights. Data localization, by centralizing control over
digital infrastructure, can diminish this capacity in a number of ways. As was discussed above, data localization as a
local server or local data storage requirement can limit freedom by permitting countries more easily to collect information on their citizens
(through domestic surveillance). It allows a government more quickly and effectively to shut down Internet
services (usually via legal threats to local Internet service providers) that the government believes is abetting unwanted political opposition.
115 Data localization mandates also can obstruct Internet freedom in other, indirect ways. Restricted routing, in particular, is
problematic, because it is not technically possible as the existing Internet is designed or organized. Unlike
the telephone network, the Internet operates under a model known as “best effort delivery,” where data is delivered to its destination in the most
efficient manner possible, without predetermined routes. For instance, data sent from the United States to Botswana will attempt to travel along
the shortest and most direct route possible. However, if there is a bottleneck along the shortest route, a packet may find a
longer but more expeditious route. This is a core feature of the Internet that makes network congestion
easy to navigate around. In order to restrict data routing to specific geographies as governments are advocating, all Internet
routers that are currently programmed to follow this “best effort” routing model would have to be
reconfigured to prohibit data from one country from moving through the territory of “prohibited”
countries. Moreover, since Internet addresses are not always assigned according to a specific geography, the Internet’s addressing system
currently would have to be dramatically altered as well. Thus, the Border Gateway Protocol (one of the core Internet networking protocols), the
Internet’s routing tables (the address books by which routers send data), and the process by which IP addresses are allocated, would all have to be
modified. Such an undertaking would require a fundamental overhaul not only of the Internet’s operating
structures, but also of the governance structures by which those structures are implemented and
standardized. These are not just arcane concerns of those involved in Internet governance, although they surely are matters that greatly
trouble those who favor an efficient and interoperable Internet. These alterations in the way the Internet works will, I
believe, materially restrict the power of the Internet to support free expression. These modifications to these core
characteristic of the current Internet – modifications that localization would require – may result in intelligence agencies acquiring a previously
unavailable capacity to assess where data had originated and where it was heading, because the origin and destination information would be
included in the data packet.116 A centralized governance process, further, which would be required to change the routing protocols and IP
allocation system, would give authoritarian countries significantly more influence over how information on the
Internet is regulated. In fact, this is one of the main reasons why China, Russia, many Arab states (among others) have pushed for tracked
routing protocols in the past, 117 just as they have lobbied for a handover of the global Internet governance system to the U.N.’s International
Telecommunications Union. 118 In short, localization would require dramatic changes to the current structure of the
Internet, changes that would have adverse consequences for those who see it as a principal – if not the
principal – means of global democratization. For some, those adverse consequences would be unintended;
more chillingly, there are those who intend precisely those consequences. This would be an enormous
price to pay, particularly since the other objectives that are promoted as justifications for localization –
namely, security for communications and economic development – are illusory.
68
Economy- Localization: Impact- Kills The Internet 2/
Data localization disrupts the global function of the internet.
Danielle Kehl ’14 (with Kevin Bankston, Robyn Greene & Robert Morgus, analysts at New America’s
Open Technology Institute, “Surveillance Costs: The NSA’s Impact on the Economy, Internet Freedom &
Cybersecurity,” July, https://static.newamerica.org/attachments/534-surveillance-costs-the-nsasimpact-on-the-economy-internet-freedom-cybersecurity/Surveilance_Costs_Final.pdf)
Some analysts have questioned whether data localization and protection proposals are politically motivated and if they would actually enhance
privacy and security for ordinary individuals living in foreign countries,160 especially given the existence of similar laws in a number of countries
and Mutual Legal Assistance Treaties (MLATs) between nations that provide cross-border access to data stored for lawful investigations.161 Yet
there is no doubt that American companies will pay a steep price if these policies move forward.
Mandatory data localization laws
could lead to soaring costs for major Internet companies such as Google, Facebook, and Twitter, who would be faced with
the choice of investing in additional, duplicative infrastructure and data centers in order to comply with new regulations or pulling their
business out of the market altogether.162 In testimony before Congress last November, for example, Google’s Director of Law Enforcement
and Information Security suggested that requirements being discussed in Brazil could be so onerous that they would effectively bar Google
from doing business in the country.163 The penalties that companies face for violating these new rules are also significant. In some cases,
unless U.S. policy changes, it may be virtually impossible for American companies to avoid violating
either domestic or foreign laws when operating overseas.164 The costs and legal challenges could easily prevent firms
from expanding in the first place or cause them to leave existing markets because they are no longer profitable.165 ITIF’s Daniel Castro has
suggested that data privacy rules and other restrictions could slow the growth of the U.S. technology-services industry by as much as four
percent.Data
localization proposals also threaten to undermine the functioning of the Internet, which
was built on protocols that send packets over the fastest and most efficient route possible, regardless of
physical location. If actually implemented, policies like those suggested by India and Brazil would subvert those protocols by altering the
way Internet traffic is routed in order to exert more national control over data.167 The localization of Internet traffic may also
have significant ancillary impacts on privacy and human rights by making it easier for countries to
engage in national surveillance, censorship, and persecution of online dissidents, particularly where
countries have a history of violating human rights and ignoring rule of law.168 “Ironically, data localization policies
will likely degrade – rather than improve – data security for the countries considering them, making surveillance, protection from which is the
ostensible reason for localization, easier for domestic governments, if not foreign powers, to achieve,” writes Jonah Force Hill.169 The
rise
in data localization and data protection proposals in response to NSA surveillance threatens not only
U.S. economic interests, but also Internet Freedom around the world.
69
Economy- Localization: Impact- Repression
Data localization facilitates government repression.
Jonah Force Hill ‘14 (technology and international affairs consultant based in San Francisco and
a Fellow of the Global Governance Futures program, “THE GROWTH OF DATA
LOCALIZATION POST-SNOWDEN: ANALYSIS AND RECOMMENDATIONS FOR U.S.
POLICYMAKERS AND BUSINESS LEADERS”)
Control of Information and Censorship While intelligence and law enforcement agencies in
democratic countries may look to localization as a way to perform their jobs more effectively,
there are governments that surely have a more sinister reason to favor localization. Political elites
in authoritarian states unquestionably see local control of the flow of data as a way to control the
content of information that reaches their populations. As was mentioned above, data localization
has been used in China, Iran, Egypt,98 and other authoritarian states to ease the technical
burdens required to exert control over Internet platforms, such as Facebook, which those
governments find to be hosting unwanted political speech, or facilitating political dissent. Yet
even the leaders of democratic countries at times have wanted the ability to “shut down” data
flows to quell political unrest or to censor “subversive” speech. At the time of this paper’s
writing (April 2014), for instance, the Turkish government appears to have forced local Internet
Service Providers (ISPs) to block access to certain servers hosting Twitter’s services, in an
attempt to stop the communication channel being used to organize antigovernment protests
challenging the government of Prime Minister Recep Tayyip Erdogan.99 This effort seems, for
the time being, to have been only partially successful, but had aggressive data localization rules
been in place, it is not inconceivable that the protestors’ efforts to circumvent the blockage
would have been far more problematic.
70
Economy- Localization: Impact- Spying
Data localization increases foreign surveillance.
Jonah Force Hill ‘14 (technology and international affairs consultant based in San Francisco and
a Fellow of the Global Governance Futures program, “THE GROWTH OF DATA
LOCALIZATION POST-SNOWDEN: ANALYSIS AND RECOMMENDATIONS FOR U.S.
POLICYMAKERS AND BUSINESS LEADERS”)
Domestic Surveillance and Law Enforcement Just as protectionist purposes can be advanced by data localization, so too can the objectives of
domestic intelligence and law enforcement agencies. Initially, we know that governments already are engaged in sophisticated surveillance of
their own populations. For example, despite the German government’s vitriolic public protestations over NSA spying, Germany itself maintains a
fairly robust intelligence collection program, a program that has been growing over the past few years.86 According to the German newsweekly
Der Spiegel, the BND, the rough German equivalent of the American NSA, maintains secret arrangements with German telecommunications and
Internet firms in order to provide the German spy agency with direct access to data flowing over domestic fiberoptic cables. 87 The agency has
also reportedly installed “taps” on Germany’s largest Internet exchange point in Frankfurt, known as the DE-CIX, in a manner consistent with the
NSA’s tactics. 88 India, which also maintains its own sizeable intelligence community,89 is likewise in the process of beefing up its signals
intelligence capabilities, importantly its Centralized Monitoring System (CMS), a massive nation-wide intelligence collection program which is
expected to give the Indian government enormous powers to access phone conversations, video conferences, text messages, and emails, in real
time, with minimal court oversight.90 If
a government already has a sophisticated communications
surveillance capacity, it would not be surprising that that it would want to enhance that capacity –
certainly, that is what the United States has done. It would seem naïve to suppose that other governments would act differently. Data
localization in both German and India and elsewhere, would offer just such enhancement,
through two important intelligence functions. First, it allows domestic intelligence agencies to
better monitor domestic data by either forcing data to be stored in local servers (indeed, India has
previously required two international firms, Research in Motion and Nokia, to locate servers and data domestically91 for intelligence collection
purposes), or
by requiring that data to be held by local firms over which domestic intelligence and
law enforcement agencies may have greater coercive power. Second, in light of the often-overlooked fact that many
intelligence services, such as the BND, cooperate with the NSA in a variety of information sharing programs,92 governments may view
localization as a tactic to gain additional bargaining power with the NSA in negotiations over how much information the American spy agency
will share.93 Moreover, domestic law enforcement agencies (to the extent that, in most democratic countries, law enforcement is administratively
and actually separate from intelligence services) surely have reason to view data localization as a potentially valuable evidence gathering tool,
useful in identifying and then prosecuting conventional criminal activities. In connection with investigations and prosecutions, foreign law
enforcement often complain that the process by which they request data from U.S. firms (the rules of which are generally negotiated between the
United States and foreign governments and then ratified in a Mutual Legal Assistance Treaty) is slow and cumbersome, and that American firms
and the U.S. Justice Department are too often uncooperative. The President’s Review Group on Intelligence and Communication Technologies
estimated that the average time from request to delivery is 10 months, and sometimes years pass before a response arrives.94 There is uncertainty
about when data can be shared, with whom, and on what terms; and it all happens with very little transparency.95 This process presents annoying
and seemingly unjustified interference to foreign law enforcement officials who want to apprehend criminals. The Brazilian government, for
example, has requested information from Google for several pending cases in the Brazilian Supreme Court, but has yet to receive it.96 Similarly,
India has often asked the U.S. to serve summonses upon Google, as well as on Facebook, Twitter, and others, for failing to prevent the
dissemination of speech prohibited under Indian Law, but has been rejected due to U.S. civil liberties sensibilities.97 Data
localization,
for frustrated and impatient law enforcement agencies and their political allies, looks like a
straightforward mechanism to free themselves from some of this bothersome dependence
on Americans.
71
Economy- Localization: Impact- Germany
German outrage at the NSA creates momentum for data localization across Europe
Jonah Force Hill ‘14 (technology and international affairs consultant based in San Francisco and
a Fellow of the Global Governance Futures program, “THE GROWTH OF DATA
LOCALIZATION POST-SNOWDEN: ANALYSIS AND RECOMMENDATIONS FOR U.S.
POLICYMAKERS AND BUSINESS LEADERS”)
Germany and “Schengen Area” Routing Among
the many countries riled by the Snowden revelations, perhaps
none has been more vocal in its condemnation, or appeared to have been more profoundly
aggrieved by the NSA surveillance programs, than Germany. The reasons for the Germans’ unique outrage over
the NSA programs are complex, but much of the explanation is historical. Germany is a society still deeply scared by its national memories of the
The NSA surveillance
dragnet has triggered painful memories of those eras and ignited a call for swift action in Berlin.
surveillance tactics used by both the Nazis during WWII and the East German Stasi during the Cold War.
Chancellor Merkel, whose anger overwhelmed her understanding of history, has even gone so far as to make a NSA-Stasi parallel in a
In modern
Germany, data privacy has become virtually sacrosanct. Even before the Snowden revelations, German data
conversation with President Obama following disclosure that the NSA had been tapping her phone conversations.26
protection commissioners had developed a track record of filing suits against U.S. Internet companies such as Facebook, Google, and the
Wikimedia Foundation, challenging data collection, transfer, and use practices that, while commonly accepted in other countries, are vigorously
protested and questionably legal in Germany.27 Germany’s
highest court has gone so far as to establish a
constitutional right to “integrity and confidentiality of IT systems.”28 It should have come as no surprise,
then, that the Germans have serious misgivings about the probity of American tech companies following the Snowden disclosures, and that the
German government would develop and pursue strategies to address the concerns of its citizens. And indeed it is devising such strategies. Among
a host of actions, including a request for U.S.-German “no-spy” agreement,29 German authorities are considering data localization in a number of
potential forms.30 Most notably, Chancellor Merkel has suggested that Europe should build out its own Internet infrastructure, permitting
Germany to keep its data within Europe. In support of this suggestion, Markel declared that, “European providers [could] offer security for our
citizens, so that one shouldn't have to send emails and other information across the Atlantic.”31 What such a proposal would mean in practice is
unclear; what is clear, however, is that some Germany
technology companies are now spearheading the data
localization movement. In particular, Deutsche Telekom, the largest provider of high-speed Internet and wireless services in
Germany and the largest telecommunications organization in the European Union, has begun to act in
advance of any German government legislation. In partnership with GMX, one of Germany’s largest email providers,
the company has already implemented its "e-mail made in Germany" service, a program that promises to keep German email communications
within German territory.32 Thomas Tschersich, who heads Deutsche Telekom's IT Security, explained that IP addresses will be used to recognize
when both the sender and the recipient of the emails are in Germany, and based on that information, arrangements between national email
providers will be used to transfer this information.33 Further, consistent with, and supported by, Chancellor Merkel’s declarations of Internet
independence, Deutsche Telekom has also raised the idea of creating a “Schengen area routing,” a network for the 26 European countries that
have agreed to remove passport controls at their borders. 34 (The Schengen area does not include the U.K., which the Snowden documents have
revealed has closely cooperated with the U.S. spying programs through its own signals intelligence agency, the GCHQ). This network would
supposedly allow the network nations’ citizens securely to exchange data within the area without having to send that data to the United States.
“The idea is that when the sender and recipient of any Internet data are in Germany their data is not sent via another country, as it sometimes is
today,” Philipp Blank, a Deutsche Telekom spokesman explained. Blank left no doubt as to which other countries’ practices – and companies –
troubled him: "We're simply asking: Why does an e-mail from Bonn to Berlin have to pass through New York or London?" The
role of
the German government in facilitating data localization proposals is currently being hotly
debated within Europe, and between Germans and Americans. The U.S. Trade Representative is advocating
strongly that Europe not move forward with the idea of EU network services that bar data from crossing the Atlantic, arguing (as this paper
argues) that it would be unwise, uneconomical, and counterproductive.36 But as of the time of this writing, these
proposals are still
under serious consideration.
72
Economy- Localization: Impact- Brazil
Brazilian backlash locks out US companies.
Jonah Force Hill ‘14 (technology and international affairs consultant based in San Francisco and
a Fellow of the Global Governance Futures program, “THE GROWTH OF DATA
LOCALIZATION POST-SNOWDEN: ANALYSIS AND RECOMMENDATIONS FOR U.S.
POLICYMAKERS AND BUSINESS LEADERS”)
Brazilians, like their
German counterparts, took serious umbrage when they learned that the NSA targeted their head of state—in Brazil’s case,
In certain interesting ways, the Brazilian response to the Snowden revelations has mirrored that of Germany.
President Dilma Rousseff. Perhaps more significantly, if less sensationally, Brazilians were angered to learn that the NSA conducted a program
that infiltrated the networks of Brazil’s national oil and gas company, Petrobas.52 The parallels between Brazil and Germany have not been lost
on the leaders of either of the two countries. Brazil, like Germany, is deeply scarred by its own history of military dictatorship and the system of
state surveillance orchestrated by that regime. When the NSA leaks became public, President Rousseff, who herself fought against Brazil’s
dictatorship as an anti-government guerilla fighter, canceled a planned U.S. visit and state dinner with President Obama.53 Later, in November,
she launched a long and impassioned diatribe from the podium of the UN General Assembly against the intrusion of U.S. surveillance. 54 Acting
upon their shared perceptions of the seriousness of the NSA’s transgressions, Germany and Brazil have jointly proposed a resolution on online
privacy to the UN,55 and have put forward proposals to build an undersea fiber-optic cable that is intended to funnel Internet traffic between
South America and Europe, without having to pass through the U.S. 56 On the home front, the Brazilian government has announced plans to
abandon Microsoft Outlook for its own domestic email system that utilizes only Brazilian data centers.57 The Brazilian parliament has also
recently passed its “Marco Civil da Internet,” an Internet “bill of rights”—the first major Internet policy legislation in Brazilian history—that
enshrines fundamental rights for Internet users, and establishes legal obligations of Internet companies in furtherance of those rights. The
Brazilian Parliament and ministries have, since 2009, been engaged in negotiations over the details of the bill, which the Center for Democracy
and Technology, a prominent American technology think tank, has called a “major victory for Brazilian civil society,” in that it provides
sweeping new protections for Brazilian Internet users. 58 Following the Snowden firestorm, however, some legislators proposed to expand the
Marco Civil beyond its “bill of rights” function, arguing for the inclusion of a provision requiring foreign companies to store copies of all data
pertaining to Brazilians in local data servers. That provision, which was initially backed by President Rousseff but has since been removed from
the current bill as passed, 59 was aimed at enabling greater access for Brazilian law enforcement to data stored abroad or belonging to foreign
companies. 60 While the Marco Civil was signed into law on April 23, 201461 with the most potent localization provision rescinded, one
provision remained, Article 11,62 which deeply troubles international business interests, in that it extends the reach of Brazilian law to any
Internet service in the world with Brazilian users. A firm based in the United States whose services are used by Brazilians could, for example, be
penalized for adhering to its domestic data-disclosure laws if they conflict with Brazil’s. Penalties include fines of up to ten percent of a firm’s
Brazilian revenues or even termination of the offending company’s services in Brazil.63 Additionally, immediately following the passage the
Marco Civil, Brazil’s largest paper, Folha de Sao Paulo, reported that the Minister of Communications, Paulo Bernardo, stated that the
government has not totally abandoned its desire to pursue a local server requirement, despite the deletion of the provision from the Marco Civil,
and is considering pursuing the policy as part of a new “Data Protection Law.”64 With more than 94 million Internet users, and Facebook usage
second only to the United States, 65 the Brazilian market is enormously important for the major U.S. Internet
companies. It will be extremely difficult and expensive for them to remove themselves from the Brazilian market. However, if the Brazilian
President elects aggressively to enforce the rules found in the Marco Civil, or if the Brazilian government pursues localization
as part of other legislation such as a new data protection law, affected U.S. companies may be left with no choice but to
take their business elsewhere.
73
Germany can lock Europe into defacto data localization: crushing US industry and
blocking data integration and the businesses built on it.
Jonah Force Hill ‘14 (technology and international affairs consultant based in San Francisco and
a Fellow of the Global Governance Futures program, “THE GROWTH OF DATA
LOCALIZATION POST-SNOWDEN: ANALYSIS AND RECOMMENDATIONS FOR U.S.
POLICYMAKERS AND BUSINESS LEADERS”)
Germany’s data localization movement is complicated by the fact that German Internet law is
deeply integrated within the broader legal framework of the European Union, which itself is in the midst of
a lengthy process of debate regarding a new General Data Protection Regulation (“GDPR”), a process that has been underway since 2012. As in
Germany, the
reaction to the Snowden revelations within other member states of the EU was
overwhelmingly critical. “There’s real anxiety among consumers about how their data could be
used fraudulently or without their knowledge,” said Vincent Carre, who heads Orange’s data-privacy unit. He then
revealed what may be his principal interest in emphasizing this anxiety: “[European companies] are in a great position to reassure customers.”39
Following the first of Snowden’s releases, the European Parliament adopted a non-binding resolution that condemned the U.S. spying and called
for Europe to respect “democratic, judicial and parliamentary safeguards and oversight in a digital society.” 40 That resolution was soon followed
by another, threatening to suspend law enforcement and intelligence agreements between Europe and the U.S.41 While that threat was never
carried out, and may have been largely symbolic and directed principally at the Parliament Members’ electorates, the EU has more significantly
been moving forward with a range of Internet and data policy proposals, some of which could lead to data localization, even if they are not
explicitly worded to do so. With total U.S. exports of digital services, including cloud-computing services, to Europe estimated at $162 billion per
year, 42 these new data rules are being closely monitored by the U.S. tech industry. The EU and the U.S. have long taken different approaches to
privacy and data protection governance and enforcement. 43 Under the 1995 EU Privacy Directive, organizations may only transfer personally
identifiable information from the EU to countries that the European Commission has deemed to have adequate data protection laws; crucially, the
U.S. has not been classified as one of those countries. In the United States, lawmakers have historically relied largely on industry self-regulation
rather than law, in line with American laissez-faire principles and the long-argued assertion from industry leaders that onerous regulations
constitute a hindrance to technical innovation and free competition. In order to mitigate the effects of these differences on commerce and trade, in
2001 the U.S. and EU agreed to a “Safe Harbor” framework by which companies subject to American law and European companies transferring
or processing data in the U.S. were both safe from European litigation as long as they adhered to certain basic privacy principles set forth in the
Directive. 44 Under this system, U.S. firms may self-certify that they meet the requirements of the Directive, allowing them to qualify at the
corporate level, even though the United States does not qualify at the national level. The continued viability of the safe harbor agreement is
uncertain, as many European politicians now seem to have concluded that the current arrangement is no longer adequate. In March 2014, less
than a year after Snowden began releasing his stolen NSA documents, the European Parliament took a step towards a new set of data security
measures intended to strengthen and expand the protections of the Privacy Directive.46 The new rules, known as the General Data Protection
Regulation (which had been under discussion since 2012, but have since Snowden taken on new life and more vigorous requirements) aim to give
European Union’s 250 million Internet users more say about who gets access to their personal data, and to replace the hodgepodge of privacy
rules across the 28 European Union member states with a single body of law, giving businesses and citizens greater certainty about their rights
and responsibilities. The European Parliament's commitment to adding force to the Privacy Directive appears to be earnest and likely, although to
become law the measure will also have to be adopted by the Council of Ministers using the famously tricky-tonavigate co-decision procedure. 47
New rules would include much higher fines for firms deemed to be in violation of data protection law in the EU (including those firms located
outside of Europe), a limited right of citizens to demand the deletion or limited retention of their personal data, and strict limitations on what can
be done with EU citizens’ data outside the Union. Fines for violating certain rules could be as high as €100 million or up to five percent of an
enterprise’s annual revenue, whichever is larger48 – an eye-popping sum. Companies such as Google could, under the new EU regulatory regime,
face much higher fines for privacy breaches than the relatively trivial sums they pay today for the same violation. Perhaps most importantly, EU
privacy rules now apply to the processing of EU citizens’ data, even if that data is processed in another country, a requirement that could force
U.S. firms to set up additional servers in Europe. The
effect of these proposed EU rules could seriously
undermine the position of some U.S. firms. They would bar some firms’ practice, embedded in
their business models, of selling data (not necessarily sensitive or private data) to third parties,
while others use data analytic tools at odds with the new rules. Furthermore, business models
aside, the rules if adopted may require U.S. firms to place their servers, and European citizen
data they hold, permanently in Europe, potentially a prohibitively expensive – or even
technically unfeasible – requirement. The consequences, in either case, would be de facto, if not
de jure, data localization.
74
Economy- Encryption: NIST Credibility
NSA surveillance of NIST standards wrecks the credibility of the industry standard
security measures. The devastates security and wrecks the industry.
Danielle Kehl ’14 (with Kevin Bankston, Robyn Greene & Robert Morgus, analysts at New America’s
Open Technology Institute, “Surveillance Costs: The NSA’s Impact on the Economy, Internet Freedom &
Cybersecurity,” July, https://static.newamerica.org/attachments/534-surveillance-costs-the-nsasimpact-on-the-economy-internet-freedom-cybersecurity/Surveilance_Costs_Final.pdf)
Because of United States’ critical role in the development of the Internet, U.S.-based organizations and
government agencies have historically been central to standards setting and oversight of key Internet
functions, particularly through the National Institute of Standards and Technology (NIST). NIST is the Commerce Department agency
responsible for setting scientific and technical standards that both the government and the private sector rely upon.239 As outlined in the 2002
Federal Information Security Management Act (FISMA), NIST has a statutory obligation to consult with the NSA on certain standards and
guidelines “to assure, to the maximum extent feasible, that such standards and guidelines are complementary with standards and guidelines
developed for national security systems.”240 The Snowden leaks revealed that the
NSA took advantage of that position to
influence the standards-setting process to weaken encryption standards to the agency’s benefit. According
to documents released by The Guardian, The New York Times, and ProPublica in September 2013, the NSA “worked covertly to get its own
version of a draft security standard issued by the US National Institute of Standards and Technology approved for worldwide use in 2006.”241
This standard was later adopted by the International Organization for Standardization, a body with membership from countries all over the
world. A number of experts suspected that the NSA had engineered a weakness in the standard that two Microsoft cryptographers discovered
in 2007, and the classified memos released last year apparently confirm that this was the case. According to The New York Times, “The N.S.A.
wrote the standard and aggressively pushed it on the international group, privately calling the effort ‘a challenge in finesse.’”242 A few days
after details about the compromised standard were revealed by the press, RSA Security—an American network security company that publicly
fought against the Clipper Chip in the 1990s243—privately alerted its customers that they should stop using an encryption algorithm that had
been influenced by the NSA. Officials advised customers that one of the cryptography components in the BSAFE toolkit and Data Protection
Manager by default used a specification known as Dual_EC_DRBG when generating keys.244 Although NIST approved Dual_EC_DRBG in 2006,
the Snowden documents revealed that the random number generator contained a vulnerability engineered by the NSA. According to the Wall
Street Journal, the announcement marked one of the first times that a security company had acknowledged the U.S. government’s involvement
in direct tampering with a product in order to facilitate access.245 The BSAFE library has been used in a number of products, including some
versions of the McAfee Firewall Enterprise Control Center, and, according to Ars Technica, the backdoor “means that an untold number of
third-party products may be bypassed not only by advanced intelligence agencies, but possibly by other adversaries who have the resources to
carry out attacks that use specially designed hardware to quickly cycle through possible keys until the correct one is guessed.”246 Documents
released a few months later, in December 2013, revealed that RSA had a secret $10 million contract with the NSA wherein the security
company agreed to set the compromised standard as the default in a number of its BSAFE products. Many cryptographers and security
researchers have been skeptical of the NIST process for years, although they are heavily reliant upon the organization for everything from
random number generators to more complex functions.248 While NIST has said it would never “deliberately weaken a cryptographic standard,”
it is unclear whether the agency was aware that the NSA was aggressively pushing for it to adopt a compromised standard.249 Both NIST and
the NSA issued statements after the stories broke in September 2013 defending the standard, although NIST’s statement indicated that the
agency would also evaluate its processes to ensure that they were open, transparent, and held to high professional standards.250 Yet, it is clear
that, at least in part as a result of the NSA’s effort to exert its pervasive influence and perceived security expertise, NIST issued a compromised
algorithm that was included for almost a decade in the cryptographic libraries of major tech companies, including Microsoft, Cisco, Symantec
and RSA, because it was required for eligibility for government contracts.251 “The
impact of weakening a standard may be
even greater than a weakening a specific product or service because that one standard may be used in
so many different products and services,” notes a recent report from the Institute of Electrical and Electronics Engineers in the
U.S.252 Although some have argued that the compromised algorithm was not widely-used, its presence in a number of products
nonetheless diminishes America’s reputation as a standards-setter, which is viewed as increasingly critical
as foreign competition for products and software intensifies. Meddling with standards can undermine
American industry, adding economic costs on top of security concerns.253 Weakening cryptographic
75
standards demonstrably harms Internet security. It also hurts the credibility of NIST, which has been directed by
President Obama to draft cybersecurity guidelines for critical infrastructure including telephone systems and power plants. “Suspicions of
NSA intervention in NIST standards in support of the NSA intelligence mission have a negative effect on
NIST’s reputation and the credibility of the standards NIST develops… [T]hey also have a negative effect
on the credibility of US industry that implements those standards and thus on international
competitiveness,” observed Microsoft’s Steven B. Lipner.254 Put simply, “NIST is operating with a trust deficit right now,” said Chris
Soghoian of the American Civil Liberties Union to the National Journal. 255 As part of an effort to begin rebuilding that trust, NIST announced in
May 2014 that it would begin a review of its cryptographic standards and guidelines program with the help of a panel of outside experts known
as the Visiting Committee on Advanced Technology (VCAT).256 In July 2014, the VCAT issued a report that examined the agency’s processes
and relationship with the NSA, outlining a series of recommendations to rebuild its credibility.257 These recommendations included improving
transparency and openness around NIST processes, increasing the technical staff at NIST, and clarifying NIST’s relationship with the NSA.258 As
Ellen Richey, an Executive Vice President at Visa, Inc. and member of the VCAT, noted in her assessment, “The allegation that NSA has, or had, a
program designed to insert weaknesses into global cryptographic standards… calls into question the integrity… of all the cryptographic
standards developed by NIST,” adding that, “Participants in the development process should understand that the risk from conflicts of interest
arises from the appearance of impropriety, even in the absence of actual misconduct.”259 With regard to redefining or clarifying NIST’s
statutory relationship to the NSA, parallel efforts are underway in Congress as well. In May 2014, the House Science and Technology Committee
voted to adopt an amendment to the Frontiers in Innovation, Research, Science, and Technology (FIRST) Act offered by Representative Alan
Grayson (D-FL) which would remove
the requirement that the NSA be consulted on encryption standards,
allowing NIST to request NSA assistance on an as-needed basis instead.260 A similar amendment proposed by
Representative Grayson that would prohibit the NSA from using appropriations funds to interfere with NIST’s security standards was approved
by the House in June 2014 as part of a defense appropriations bill.261 However, it
remains to be seen if such a measure will
ultimately be passed into law.
76
Economy- HiTech: Every Company
NSA surveillance crushes US tech competitiveness generally and drains hundreds of
billions from the economy.
Laura K. Donohue ’15 (Georgetown University Law Center, “High Technology, Consumer Privacy, and
U.S. National Security,” http://scholarship.law.georgetown.edu/facpub/1457
)
The NSA programs, and public awareness of them, have had an immediate and
detrimental impact on the U.S. economy. They have cost U.S. companies billions of dollars in lost sales, even as companies have seen their market shares
II. ECONOMIC IMPACT OF NSA PROGRAMS
decline. American multinational corporations have had to develop new products and programs to offset the revelations and to build consumer confidence. At the same time, foreign entities
undermined
U.S. trade agreement negotiations. It has spurred data localization efforts around the world, and it has
raised the spectre of the future role of the United States in Internet governance. Even if opportunistic, these shifts signal an
immediate and long-term impact of the NSA programs, and public knowledge about them, on the U.S. economy. A . Lost Revenues and Declining Market
Share Billions of dollars are on the line because of worldwide concern that the services provided by U.S.
information technology companies are neither secure nor private.13 Perhaps nowhere is this more apparent than in cloud computing.
have seen revenues increase. Beyond the immediate impact, the revelation of the programs, and the extent to which the NSA has penetrated foreign data flows, has
Previously, approximately 50% of the worldwide cloud computing revenues derived from the United States.14 The domestic market thrived: between 2008 and 2014, it more than tripled in
within weeks of the Snowden leaks, reports had emerged that U.S. companies such as Dropbox, Amazon Web Services, and Microsoft’s
Azure were losing business. 16 By December 2013, ten percent of the Cloud Security Alliance had cancelled U.S. cloud services projects as a result of the Snowden
value. 15 But
information.17 In January 2014 a survey of Canadian and British businesses found that one quarter of the respondents were moving their data outside the United States.18 The Information
declining revenues of corporations that focus on cloud computing and
data storage alone could reach $35 billion over the next three years.19 Other commentators, such as Forrester Research analyst James
Staten, have put actual losses as high as $180 billion by 2016, unless something is done to restore confidence in
data held by U.S. companies.20 The monetary impact of the NSA programs extends beyond cloud
computing to the high technology industry. Cisco, Qualcomm, IBM, Microsoft, and HewlettPackard have all reported declining sales as a direct result of the
Technology and Innovation Foundation estimates that
NSA programs.21 Servint, a webhosting company based in Virginia, reported in June 2014 that its international clients had dropped by 50% since the leaks began.22 Also in June, the German
government announced that because of Verizon’s complicity in the NSA program, it would end its contract with the company, which had previously provided services to a number of
It’s clear to every single tech company
that this is affecting their bottom line.”24 The European commissioner for digital affairs, Neelie Kroes, predicts that the fallout for U.S. businesses in the EU
alone will amount to billions of Euros.25 Not only are U.S. companies losing customers, but they have been forced to spend
billions to add encryption features to their services. IBM has invested more than a billion dollars to build
data centers in London, Hong Kong, Sydney, and elsewhere, in an effort to reassure consumers outside
the United States that their information is protected from U.S. government surveillance. 26 Salesforce.com made a
government departments.23 As a senior analyst at the Information Technology and Innovation Foundation explained, “
similar announcement in March 2014.27 Google moved to encrypt terms entered into its browser. 28 In June 2014 it took the additional step of releasing the source code for End-to-End, its
newly-developed browser plugin that allows users to encrypt email prior to it being sent across the Internet.29 The following month Microsoft announced Transport Layer Security for inbound
and outbound email, and Perfect Forward Secrecy encryption for access to OneDrive.30 Together with the establishment of a Transparency Center, where foreign governments could review
source code to assure themselves of the integrity of Microsoft software, the company sought to put an end to both NSA back door surveillance and doubt about the integrity of Microsoft
products. 31 Foreign technology companies, in turn, are seeing revenues increase. Runbox, for instance, an email service based in Norway and a direct competitor to Gmail and Yahoo, almost
immediately made it publicly clear that it does not comply with foreign court requests for its customers’ personal information. 32 Its customer base increased 34% in the aftermath of the
Snowden leaks. 33 Mateo Meier, CEO of Artmotion, Switzerland’s biggest offshore data hosting company, reported that within the first month of the leaks, the company saw a 45% rise in
revenue.34 Because Switzerland is not a member of the EU, the only way to access data in a Swiss data center is through an official court order demonstrating guilt or liability; there are no
exceptions for the United States.35 In April 2014, Brazil and the EU, which previously used U.S. firms to supply undersea cables for transoceanic communications, decided to build their own
cables between Brazil and Portugal, using Spanish and Brazilian companies in the process. 36 OpenText, Canada’s largest software company, now guarantees customers that their data remains
Numerous foreign companies are
marketing their products as “NSA proof” or “safer alternatives” to those offered by U.S. firms, gaining
market share in the process.
outside the United States. Deutsche Telekom, a cloud computing provider, is similarly gaining more customers.37
77
Economy- HiTech: Trend Bad
Failure to restrict data surveillance will do permanent damage US economy by locking
the US out of crucial markets. .
Danielle Kehl ’14 (with Kevin Bankston, Robyn Greene & Robert Morgus, analysts at New America’s
Open Technology Institute, “Surveillance Costs: The NSA’s Impact on the Economy, Internet Freedom &
Cybersecurity,” July, https://static.newamerica.org/attachments/534-surveillance-costs-the-nsasimpact-on-the-economy-internet-freedom-cybersecurity/Surveilance_Costs_Final.pdf)
The pressure is increasing on American companies to respond to the revelations in order to mitigate
potential backlash and prevent foreign companies from poaching their business. According to the R Street
Institute study, “It appears the NSA’s aggressive surveillance has created an overall fear among U.S. companies that there is ‘guilt by
association’ from which they need to proactively distance themselves.”79 Some companies have tried to regain trust by publicly stating that
they are not part of PRISM or other NSA programs, issuing disclaimers along the lines of those published by Amazon and Salesforce in June
2013.80 Others that have been directly linked to the NSA programs have publicly criticized the American government and called for greater
transparency in order to rebuild user confidence and counteract potential economic harms.81 To that end, nine major American companies—
AOL, Apple, Dropbox, Facebook, Google, LinkedIn, Microsoft, Twitter, and Yahoo—joined together in the “Reform Government Surveillance”
campaign in January 2014, where they launched a website and wrote an open letter to government leaders laying out principles for surveillance
reform, including an end to bulk collection and opposition to data localization requirements.82 Since the launch, the coalition has urged reform
on Capitol Hill through outreach and letters to Congress, supported the February 2014 “The Day We Fight Back” activist campaign, and hired a
lobbyist to bolster their efforts to curb the NSA’s reach.83 This unlikely, public partnership of some of Internet’s biggest rivals speaks to the
seriousness of the threats to their collective business interests.84 Indeed, according to an April 2014 Harris poll commissioned by a data
security company, nearly half of the 2,000 respondents (47 percent) have changed their online behavior since the NSA leaks, paying closer
attention not only to the sites they visit but also to what they say and do on the Internet.85 In particular, 26 percent indicated that they are
now doing less online shopping and banking since learning the extent of government surveillance programs. Clearly, there are significant
financial incentives for companies to distance themselves from the programs, and as a result, they are expending capital—actual and political—
to do so. Other companies have taken it a step further, developing new products or taking additional precautions to assure customers that their
data is safe from the NSA. “Many tech companies feel they have no choice but to try to develop NSA resistant products because customers
from China to Germany threaten to boycott American hardware and cloud services they view as compromised,” wrote USA Today in February
2014.86 Companies like Yahoo and Google have devoted increased resources to hardening their systems against NSA surveillance in order to
assure users that their data is adequately protected.87 Yahoo implemented automatic encryption on its email service in January 2014, and in
March 2014 began encrypting all traffic that moved between its data centers, as well as queries on its homepage and its messaging service.88
Google’s Vice President for Security Engineering, Eric Grosse, referred to efforts to protect users’ data from government surveillance as “an
arms race,” when discussing the company’s move last fall to encrypt all information travelling between its data centers.89 In June 2014, Google
unveiled a source code extension for the Chrome browser called “End-to-End” which is designed to make email encryption easy, and
announced a new section of its transparency report called “Safer Email” which details the percentage of email that is encrypted in transit and
identifies the providers who support encryption.90 These changes are part of a new focus on encouraging users and companies to harden their
systems against NSA surveillance, and the strategy appears to be working. Almost immediately, Comcast announced its plans to work with
Google to encrypt all email traffic exchanged with Gmail after the cable company was described as one of the worst offenders in the new
report.91 Meanwhile, Microsoft has been publicizing its policy that allows customers to store their data in Microsoft data centers in specific
countries.92 John E. Frank, deputy general counsel at Microsoft, told The New York Times, “We’re hearing from customers, especially global
enterprise customers, that they care more than ever about where their content is stored and how it is used and secured.”93 IBM is reportedly
spending over a billion dollars to build overseas data centers in an effort to reassure foreign customers that their data is protected from U.S.
surveillance.94 In reference to foreign customers asking about whether their data is protected from government snooping, an IBM executive
said, “My response is protect your data against any third party — whether it’s the NSA, other governments, hackers, terrorists, whatever,”
adding that it is time to “start talking about encryption and VPNs and all the ways you can protect yourself.”95 Finally, faced with an impossible
choice between maintaining user trust and complying with government requests, a handful of American companies that provide secure email
services have had to shut down their operations altogether. Lavabit, a secure email service provider that experienced a 1,900 percent increase
in account registrations after the Snowden revelations, shuttered its business after it became clear that user data could not be protected from
government surveillance. When the NSA could not read Lavibit’s communications directly by breaking its encryption, the agency obtained
orders compelling the company to hand over information related to its encryption keys, which would have given the NSA the ability to decrypt
the communications of all 400,000 of Lavabit’s customers.96 Silent Circle, a secure communications provider that saw a 400 percent revenue
increase following the Snowden revelations, followed Lavabit’s lead and shut down its secure mail service, explaining that the decision was
78
made because “we see the writing on the wall.”97
It is abundantly clear that the NSA surveillance programs are
currently having a serious, negative impact on the U.S. economy and threatening the future
competitiveness of American technology companies. Not only are U.S. companies losing overseas sales
and getting dropped from contracts with foreign companies and governments—they are also watching
their competitive advantage in fast-growing industries like cloud computing and webhosting disappear,
opening the door for foreign companies who claim to offer “more secure” alternative products to poach their business. Industry efforts to
increase transparency and accountability as well as concrete steps to promote better security by adopting encryption and other best practices
are positive signs, but U.S. companies cannot solve this problem alone. “It’s
not blowing over,” said Microsoft General Counsel Brad
Smith at a recent conference. “In June of 2014, it is clear it is getting worse, not better.”98 Without meaningful
government reform and better oversight, concerns about the breadth of NSA surveillance could lead to
permanent shifts in the global technology market and do lasting damage to the U.S. economy.
79
Economy- HiTech: Backdoors Kill Credibility
NSA back-dooring eviscerates trust in US tech industries as well as the security and
stability of global networks.
Danielle Kehl ’14 (with Kevin Bankston, Robyn Greene & Robert Morgus, analysts at New America’s
Open Technology Institute, “Surveillance Costs: The NSA’s Impact on the Economy, Internet Freedom &
Cybersecurity,” July, https://static.newamerica.org/attachments/534-surveillance-costs-the-nsasimpact-on-the-economy-internet-freedom-cybersecurity/Surveilance_Costs_Final.pdf)
The U.S. government should not require or request that new surveillance capabilities or security
vulnerabilities be built into communications technologies and services, even if these are intended only
to facilitate lawful surveillance. There is a great deal of evidence that backdoors fundamentally weaken
the security of hardware and software, regardless of whether only the NSA purportedly knows about
said vulnerabilities, as some of the documents suggest. A policy statement from the Internet Engineering Task Force in 2000 emphasized
that “adding a requirement for wiretapping will make affected protocol designs considerably more complex. Experience has shown
that complexity almost inevitably jeopardizes the security of communications.”355 More recently, a May 2013
paper from the Center for Democracy and Technology on the risks of wiretap modifications to endpoints concludes that “deployment of an
intercept capability in… communications services, systems and applications poses serious security risks.”356 The authors add that “on
balance mandating that endpoint software vendors build intercept functionality into their products will
be much more costly to personal, economic and governmental security overall than the risks associated
with not being able to wiretap all communications.”357 While NSA programs such as SIGINT Enabling—much like proposals
from domestic law enforcement agencies to update the Communications Assistance for Law Enforcement Act (CALEA) to require digital
wiretapping capabilities in modern Internet based communications services358—may aim to promote national security and law enforcement
by ensuring that federal agencies have the ability to intercept Internet communications, they do so at a huge cost to online security overall.
Because of the associated security risks, the
U.S. government should not mandate or request the creation of
surveillance backdoors in products, whether through legislation, court order, or the leveraging industry
relationships to convince companies to voluntarily insert vulnerabilities. As Bellovin et al. explain, complying
with these types of requirements would also hinder innovation and impose a “tax” on software
development in addition to creating a whole new class of vulnerabilities in hardware and software that undermines the overall security of
the products.359 An amendment offered to the NDAA for Fiscal Year 2015 (H.R. 4435) by Representatives Zoe Lofgren (D-CA) and Rush Holt (DNJ) would have prohibited inserting these kinds of vulnerabilities outright.360 The Lofgren-Holt proposal aimed to prevent “the funding of any
intelligence agency, intelligence program, or intelligence related activity that mandates or requests that a device manufacturer, software
developer, or standards organization build in a backdoor to circumvent the encryption or privacy protections of its products, unless there is
statutory authority to make such a mandate or request.”361 Although that measure was not adopted as part of the NDAA, a similar
amendment sponsored by Lofgren along with Representatives Jim Sensenbrenner (D-WI) and Thomas Massie (R-KY), did make it into the
House-approved version of the NDAA—with the support of Internet companies and privacy organizations362—passing on an overwhelming
vote of 293 to 123.363 Like Representative Grayson’s amendment on NSA’s consultations with NIST around encryption, it remains to be seen
whether this amendment will end up in the final appropriations bill that the President signs. Nonetheless, these legislative efforts are a
heartening sign and are consistent with recommendations from the President’s Review Group that the
U.S. government should not
attempt to deliberately weaken the security of commercial encryption products. Such mandated
vulnerabilities, whether required under statute or by court order or inserted simply by request, unduly threaten innovation in
secure Internet technologies while introducing security flaws that may be exploited by a variety of bad
actors. A clear policy against such vulnerability mandates is necessary to restore international trust in
U.S. companies and technologies.
80
Economy- Impact: Global Service Sector
Global service sector will allow unprecedented growth and stability.
Edward Gresser ‘14 (Director, Progressive Economy, January 31, 2014 “21ST-CENTURY
TRADE POLICY: The Internet and the Next Generation’s Global Economy”)
“… We expect to break new ground, to create a true 21st century trade agreement. The Trans-Pacific Partnership (TPP) I intend to negotiate and
conclude will reflect U.S. priorities and values, enhance American competitiveness, and generate job-creating opportunities for American
businesses and workers.” – Then-U.S. Trade Representative Ron Kirk, announcing the U.S.’ decision to join the TPP, May 2009. Ambassador
Kirk’s vaguely mysterious phrase – “21st -century trade agreement” – implies two things: That there is something different about trade in the 21st
century, and that policy needs to evolve in response. The concept’s meaning, however, has never been entirely clear. Trade itself tends to grow
over time, agreements become incrementally more complex – but this has been going on for many years. But Kirk was correct to suggest that
there has also been a more abrupt change in trade: the sudden emergence of the Internet as a pathway for trade in services, for small-scale
business, logistics and supply-chain management, arts and media, and more. This change does require policy to adapt and to take on
some new missions. The TPP agreement is moving toward a likely conclusion this spring, and Congress has begun a discussion of Trade
Promotion Authority. As both proceed, the question the uniquely ‘21st -century’ aspects of policy can help answer is about the nature of the
global economy of 2030: perhaps one in which the Internet helps create a more affluent, more pluralistic, and more
humane global economy; or, alternatively, one in which the digital world fragments, thickens, and
ultimately comes to mirror the divisions of the physical world. INTRODUCTION Twenty years after the launch of the
World Wide Web, nearly three billion individuals and millions of businesses use the Internet daily. As they search, shop, debate, and browse,
they are in a practical sense moving data around the world in the form of ordered photons and electrons. The consequences materialize in the
complex worlds of global banking, logistics and manufacturing; in daily life, entertainment choices, shopping, and teen texting; and in the nascent
worlds of telemedicine, mobile wallets, and tailored cloud services. If the Internet develops in the next two decades as it did in the last, these
everyday surprises will simply be the early signs of a more fundamental evolution: the creation of a future global economy with
ethical roots in the free flow of ideas, more able than today’s to raise living standards, empower
individuals and small businesses, and assist the poor. There is also an alternative future, rooted in
nationalistic policy trends and data restrictions, and divergences of policies over privacy, cyber-security
and other essential regulatory systems. Should this be the actual future, the Internet will evolve away from today’s
still mostly open and egalitarian global space, to emerge instead as something fragmented and diminished,
at least in comparison to what might be. And here is the challenge for the agreements the Obama administration has hoped to conclude – the TPP,
the Trans-Atlantic Trade and Investment Partnership, and the Trade in Services Agreement, which together cover 80 percent of world Internet
traffic1 , and perhaps new options at the World Trade Organization – and for Congress as it debates a Trade Promotion Authority law which can
define their content. If the genuinely new feature of 21st -century trade is the digital world, the mission of 21st -century “trade policy” is to
preserve the integrity of the Internet as a global space for commerce, and to encourage policies that help it develop as it should: - Free flow of
data across borders, without arbitrary blockages or “forced localization”; - Rights to transparent common-good regulation (to ensure privacy,
protect national security, defend public morals based on national choices, enforce copyright and libel laws), rather than arbitrary, politicized, or
protectionist limits on trade; - Services guaranteed access to world markets; - Trade facilitation encouraging small shipments of goods through de
minimis exemptions from tariff schedules to support individuals and small businesses as they take up larger roles in trade. - Privacy measures to
ensure that diverging national laws do not rupture Internet links; - Standards-setting procedures which encourage accelerated technological
advance in devices and manufacturing; - Intellectual property rules that encourage innovation and deter piracy, through strong copyright
protections for innovation and content, and (as introduced by U.S. negotiators in the TPP talks) exceptions and limitations based in U.S. law
which encourage cloud computing, user-created content, and new Internet services yet to be invented. It oversimplifies, but doesn’t mislead, to
describe 20th-century trade policy as a long restorative effort. Launched with the New Deal Congress’s passage of the Reciprocal Trade
Agreements Act in 1934 and pursued ever since, it has been an effort to repair a global economy broken by misguided policy, and to prevent
similar future mistakes. Franklin Roosevelt and his allies designed 20th-century trade policy on the basis of an observation from experience, and
a belief about the future. Their premise was that by raising tariffs between 1929 and 1931, the U.S. and its partners had harmed the global
economy and deepened the Depression; and that this in turn had encouraged political radicalism and helped create the conditions for the Second
World War. Their belief (or hope) was that if raising barriers had made the world poorer and more dangerous, reducing barriers might help
rebuild prosperity, prevent a repetition of the Depression, and, over time, strengthen peace. Roosevelt’s 1945 message to Congress explains: “If it
is clear that barriers to foreign trade are coming down all around the world, businessmen can and will direct production to the things that look
most promising under those conditions. In that case a real and large and permanent expansion of international trade becomes possible and likely.
… The purpose of the whole effort is to eliminate economic warfare, to make practical international cooperation effective on as many fronts as
possible, and so to lay the economic basis for the secure and peaceful world we all desire.”2 Since then, 20th-century policy has continued across
17 more grants of Congressional negotiating authority to 12 presidents. Their negotiators have in turn completed 13 multilateral and “plurilateral”
trade agreements, 15 Free Trade Agreements and 137 “accessions” to the GATT and the WTO. It is by no means complete: big economies
such as India, Brazil, Egypt, South Africa often remain relatively closed, agriculture and textile trade are sharply
limited almost everywhere, American home-goods tariffs remain at 1950s levels, and developing-country automotive trade barriers remain high.
And while all major economies but Iran are now WTO members and 20 are FTA partners, formal acceptance of rules is obviously not the same
81
thing as full compliance. This admitted, a lot of the work begun in 1934 is done. The high barriers of the 1920s and 1930s are mostly gone, and
where they still exist, WTO rules make them at least transparent and predictable. Trade flows tariff-free (or nearly so) in huge swathes of the
goods economy – natural resources like gems, oil, and ore; tropical farm products like coffee, cocoa, and tea; hightech goods like medicine,
medical devices, smart phones, airplanes, military gear and satellites; and consumer products from furniture and toys to beer and laptops. WTO
agreements and FTAs keep customs rules transparent, make standards-setting and intellectual property rules consistent across countries, and (in a
few cases) open services markets. The modern global economy combines these liberalizing policies with logistical innovation – air cargo,
container shipping, express delivery – and better communications technology. It has many critics who make many valid points: competitive
stress, the need for worker adjustment, challenges for border regulation, and ethical questions of equity, labor standards, and environmental
policy arising in areas where rich and poor economies meet. All these require careful thought and good policy response, sometimes through the
evolution of agreements and sometimes through aid, capacity-building, domestic policy, and other means. But the same critics often miss
important facts. The world is considerably richer. The opening of the global economy has given the broad publics of the United States and
wealthy countries an unprecedented degree of ‘mass affluence’ – fresh raspberries in winter, low-cost designer clothing, astonishingly cheap
smart-phones and large-screen TVs – while encouraging a steady expansion of the middle classes of lower-income countries and a rapid recession
of poverty. The world economy is more stable. No postwar financial or resource crisis has caused anything
comparable to the misery of the Depression; to the contrary, in a relatively more open world economy
Americans were able to raise exports by 50 percent after the 2008 crisis, helping thousands of factories stay open and
keeping millions of American men and women at work. Most of all, we have come a long way toward Roosevelt’s ideal of a ‘secure and peaceful
world.’ The more open world has in fact been safer: we are now in the midst of a sixth unbroken decade era of peace among the world’s great
powers, a span without precedent in historical records. THE FUTURE ECONOMY: MORE AFFLUENT, MORE PLURALISTIC, MORE
HUMANE Looking back, 20th-century trade policy has been a job done, obviously not perfectly but remarkably well. And now we have
something new – a technology that very suddenly enables the mass transfer not of goods but of ordered
information, worldwide and at very low cost. Since the World Wide Web went live in 1993, the Internet has joined the China
boom as the dynamic and disruptive fact of economic life. Limited to technology enthusiasts and lab professionals in the early 1990s, largely the
domain of wealthy countries in 2000, it is now a global space in which nearly 3 billion people talk, argue, share entertainment, shop, sell, and
learn. By 2017, according to Cisco’s projections, its ‘population’ will be approaching 4 billion; by 2020 it should reach essentially all of the
world’s businesses, schools, research labs, banks, retail outlets, artists, scientists, and middle-class shoppers. 3 The Internet’s logical development
over the next two decades is toward a world of more users, more capable data centers to store information, more powerful search engines to order
it, better satellites and fiber-optics to transmit it around the world, and therefore of new possibilities. Considering these possibilities, Members of
Congress debating the TPA bill have the chance – as Roosevelt did in thinking about the first multilateral trade negotiations 70 years ago – to
look ahead and envision something better than we now have. Fundamentally, if today’s global economy is more open, stable, and peaceful than
that of the 1930s, the right policies can make the global economy of the 2030s radically more affluent,
pluralistic, and humane than today’s. 1. More affluent: First, the Internet’s creation of a global services economy
can make the world much wealthier. 20th-century trade policy helped bring luxury goods once available to the wealthy (or nobody
at all) to a mass public. By analogy, the Internet of 2030 can bring services now reserved for an elite to the global public. What, after all, does the
Internet do now? Fundamentally, it offers mass access to a torrent of products, in the form of electrons and photons arrayed as meaningful bits of
data. These are Netflix videos for home theaters; CNN, the BBC, and al-Jazeera offering their various global audiences locally tailored news;
iTunes and Spotify allow very small music purchases; telemedicine providing 24-hour radiological services to small-town hospitals and clinics;
search engines enabling individuals to shop online, make reservations for hotels and air-flights; cloud services that allow individuals to buy
sophisticated software for single or tailored use at very low cost; online banking and bill-paying; and so on. Until recently services like these
crossed borders only in small volume via telephone, radio, and similar older media. And today’s flows are small and crude in comparison to what
might lie ahead. The logical future is one in which more capable fiber-optics, satellites, and routers convey
data held in more powerful servers, consumers use more efficient search engines and steadily more
powerful software to find the information they need. As this proceeds, all sorts of services - arts and entertainment, financial
services, online retailing, news and media, telemedicine, distance education and hundreds of new industries that don’t now exist will become
available not just to a relatively limited rich-world public, but to a world population of five billion Internet users. Trade on this scale will
support not only consumer opportunity but macroeconomic growth through new investment and
employment. To adapt some figures, note that the commercial services best suited to Internet trade – arts and media, financial services,
medicine, research, telecommunications, and so on – now account for about 10 percent of trade. (In practical terms this is about $2.3 trillion in
exports as of 2012, as against $18.3 trillion in goods exports.) 4 But they make up a much larger 30 percent of American and other developedworld GDP. 5 Even if we ignore the potential of new demand to support new investment and industries, and assume that cross-border trade in
services grows to equal its share of the U.S.’ domestic GDP, the figures are startling: Americans would export $400 billion a year more than we
now do, the U.S. trade imbalance would close, and world exports would grow by nearly $3 trillion – all through the supply of services that make
people’s lives richer, safer, healthier, and more fun. As the Internet allows larger quantities of data to move at lower cost, services will catch up
with manufacturing – just as 20th-century policy helped manufacturing overtake agriculture and resource trade in the last century. 2. More
Pluralistic: Second, the Internet will make the world economy more ‘democratic,’ by giving small businesses and individuals greater power to
shape the global economy. To oversimplify, today’s world of trade in goods – the flows of clothes, tablets, beer, jewelry, and so on – is managed
by large organizations. These are retailers, manufacturing complexes, logistics firms, and others using ‘big data’ to predict and satisfy consumer
preference, and elaborate global value chains which create and move products efficiently from source to assembler to buyer. Small businesses
participate in these value chains, but more often as vendors for distributors and suppliers of specialized parts rather than as initiators. Barriers to
their direct participation in international trade are high: small businesses lack dedicated legal staff to manage customs firms, and can rarely afford
to send executives abroad to find and court potential new customers. Therefore relatively few small businesses export – in the U.S., the fraction is
about 4 percent. The Internet removes many of these barriers, enabling small businesses and individuals to use search engines, online auction
sites, and express delivery services to find buyers, ship goods in small quantities to faraway customers, and so to become exporters. A bit of reallife illustration comes from eBay’s 2012 report Commerce 3.0: Enabling Traders to Enter and Grow on the Global Stage, which looks at eBay’s
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own users as exporters. Again, only 4 percent of American businesses as a whole export; by contrast, 97 percent of eBay’s business users are
exporters, and small businesses export nearly as much of their total sales as large businesses: “A remarkably high share of U.S. sellers on eBay
engage in cross-border sales: out of those sellers considered as commercial sellers [i.e. among eBay’s business users, as opposed to individual] a
staggering 97% export. … [S]mall and large sellers on eBay are almost equally likely to export: even the smallest 10% of commercial eBay
sellers overwhelmingly engage in exports (94%). Small sellers on eBay export a share of 14% [of online sales] – not very different from the
behavior of the largest 10% that export 18%.” 6 eBay is of course only one auction site, even if it’s quite a big one. But the Commerce
Department’s annual systematic count of exporters shows the same thing. Released each April, these reports find small-business participation in
trade rising fast. In the three years after the crisis, the U.S. was adding nearly 15,000 new exporting businesses a year, most of them small
manufacturers employing fewer than 20 workers. 7 One can assume, though not with certainty, that these are firms using auction sites, search
engines, and e-mail services to find buyers abroad. As capacity to do this grows, the future will be one in which smaller entities – businesses,
artists, and families, as exporters and as choosers of the world’s goods – are much more powerful shapers of the global economy than they are
today; and in which the global economy itself is if not more ‘democratic,’ then at least more pluralistic. AMERICAN SMALL BUSINESSES AS
EXPORTERS8 Total exporters Small businesses* Large businesses 2001 242,000 165,000 26,000 2006 245,000 177,000 23,000 2011 302,000
233,000 23,000 * Adapted from Census Bureau “Profiles of U.S. Exporting Companies.” This table defines ‘small business’ as businesses
employing 19 or fewer workers and ‘ large business’ as employing 100 or more, and assumes that businesses for which the Department does not
have employment totals are overwhelmingly small. If this latter group is excluded, the total of small business exporters rises from 94,000 in 2001
to 107,000 in 2009, and since then to 114,500. 3. More humane: Finally, both trends – a more affluent world public, and a more pluralistic
economy – suggest a future significantly friendlier to the poor. To be simplistic but not misleading, poor people usually have two problems to
solve – they have little money, and they live far away from the main markets. The lack of money is obvious, the rural question sometimes less so.
But to put figures on it, 900 million of the world’s 1.2 billion people in absolute poverty are rural people,9 as are a smaller but still
disproportionate share of Americans below the national poverty line. Internet access is no cure for either. But it does help reduce the barriers both
pose to efficient use of income and to higher living standards by easing access to suppliers of essential goods and services. Examples appear in
many fields – education, purchase of necessities and small amenities, communication with friends and relatives – but two areas may be especially
significant. One is access to a suite of basic health services – in particular monitoring of prescription medicines, chronic conditions, maternity,
and radiology – in which long-distance monitoring and information flows can compensate for distance from centers of care. Rural people have
higher rates of maternal mortality, infant mortality, and deaths to accident or treatable illness than anybody else. This is in part because they have
little money to pay for services, but mostly because they usually live far from clinics which offer emergency services and routine care for illness
and pregnancy, and very far from specialists needed to address more complex problems. Internet access via mobile phone allows regular, lowcost monitoring of patients and prescriptions at a distance, and easy, emergency consultation for patients far from urban hospitals. One recent
real-world case in point comes from the Australian Broadcast Company, noting that “m-Health,” the delivery of medical advice and monitoring
via cell-phone, is helping to cut maternal mortality in East Timor.10 Another is the acceleration of ‘financial inclusion’, meaning the ability of
low-income people to build savings and credit, and access loans to support small businesses, via ‘mobile wallets’ and virtual accounts. Lowincome regions in poor countries have few bank branches, meaning that most people in very low-income rural areas live by no-profit bartering of
goods, and save money by high-risk and interest-free hoarding of cash and jewelry. Internet access is a unique way for these people to enter
modern health and financial systems. One example is a hint of what may be possible: Kenya’s online banking service m-Pesa has helped to bring
17 million people from the traditional cash economy to the world of savings, interest, and credit, by enabling them to open very small-value
accounts, take out small loans, and carry money through slums without physical risk.11 The service, launched in 2007, now operates in two other
African countries. … OR PERHAPS NOT Quite a prospect. But perhaps only some of it – maybe little– will actually materialize. Here we can
return to 20th-century trade policy for a lesson – not to recapitulate its achievements or criticize its shortcomings, but to remember why the
politicians of the 1930s invented it. Trade was of course not invented in the 1930s. The later 19th-century world economy was not primitive,
quaint, closed, or fragmented. From the 1850s to the 1920s, it was open, technologically progressive, and linked more powerfully by information
and logistical services than ever before. In this “steampunk” global economy, low trade barriers encouraged by a British-led treaty system joined
the replacement of sail by steam. The Suez and Panama Canals cut months off maritime cargo deliveries, and the first wiring of the world through
submarine telegraph cables opened instant communication to every continent by the 1870s. Finally, a series of multilateral agreements
standardizing weights and measures, defining time zones, promoting international recognition of copyright and patents, and ensuring cable
compatibility helped create a single world space for goods flows and information. This global economy declined and then collapsed not because it
was inherently unstable or ‘overreaching.’ Rather the causes were political rivalries among great powers, and the failure of 19th-century trade
policy to provide legal support to flows of goods like that created by today’s WTO agreements and Free Trade Agreements. The 19th-century
treaties were relatively weak, lacking policy “bindings” comparable to those of modern agreements; and no organization like the WTO existed to
keep markets open and arbitrate disputes. 12 This was convenient for hightariff politicians in 19th-century America, Germany, and France, when
all relied on Britain to keep an open market. In 1884 a ‘liberalizing’ Congress could lower tariffs, and in 1890 a more conservative Congress
could raise them back, without much worry in either case about foreign reaction. But in the early 1930s, when all countries raised barriers
simultaneously (and then began to compete by devaluing currencies), financial crisis became Depression and collapse. The modern Internet
economy has a similar weakness. A dazzling technological and engineering achievement, it has little more underpinning of policy than did the
steamship-and-telegraph economy of 1913. No international agreement protects the free flow of data across borders in the way that the GATT
system has provided security for flows of goods. Governments feel free to coerce investment and data storage, bias standards-setting toward local
champions, and even demand local production of IT software and hardware. And WTO agreements offer few guarantees of ‘market access’ to the
service industries now just beginning to send their arrays of photons across the Internet. And beyond this, Internet trade poses questions of
privacy, cybersecurity and other challenges which, combining technical complexity with emotion as they do, require careful thought and
international cooperation to avert the ruptures they can cause. Thus two challenges to the Internet’s future have emerged and appear likely to
worsen rapidly, as governments react to lobbying campaigns by businesses and NGOs, spy scandals, and other inevitabilities of political life:
Advanced-economy divergence: The United States and the European Union are not imposing severe new limits on internet use or data flows. But
they are diverging rapidly in approaches to the online user privacy guarantees essential to people on the Internet using credit cards to buy and sell
things, exchanging health information with hospitals, and validating identification with Social Security numbers. No longer fluid and malleable as
they were in the 1990s, these divergences are setting ever more firmly in public opinion and law. They need international agreements to ensure
that they do not rupture the Internet, thicken the ‘virtual borders,’ and severely degrade economic ties across the Atlantic in particular but
worldwide as different countries adopt diverging models. Middle-income country ‘data nationalism’: Still more ominous, many large and fastgrowing middle- and lower-income countries are experimenting with attempts to bring economic nationalism to cyberspace. These include
arbitrary and politicized limits on flows of data across borders, laws requiring local storage of data (and hence expensive multiplication of
servers, pressure on world energy supplies, and so on), manufacturing of high-tech IT goods, and politicized standards-setting. Examples come
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from four of the world’s five largest countries – China, India, Indonesia, and Brazil, together home to 2.8 billion people and nearly half of the 2
billion new Internet users.13 All are conducting ambitious and ill-advised experiments in data limitation, buy-local rules, and forced localization:
14 - Brazil has reacted to the fall’s National Security Agency eavesdropping controversy by proposing to require companies operating in Brazil
and using Internet data to store that data within the country. This is justified as a security measure to protect Brazilian personal data from
electronic espionage, but is obviously unlikely to deter a modern intelligence service. If the bill in question passes, on the other hand – as of this
writing it is under Congressional consideration – it is likely to raise access and data storage costs, slow the growth of Latin America’s Internet use
and Internet industry development, frustrate ordinary people hoping to buy and sell things, and create a fracture zone through which information
moves only with difficulty and unnecessary expense. - China has created a counter-Internet surrounded by a famous “Great Firewall,” and
regularly blocks international data traffic for unexplained reasons or political purposes entirely unrelated to users. - India has, in certain
circumstances, required telecommunications operators and service providers to keep certain data in-country and allow access to law enforcement
and security agencies. Press reports also indicated that Indian government officials placed significant pressure on certain telecommunications
companies to locate servers incountry and hand over data to security services, or risk losing their ability to operate." - And Indonesia has
published regulations requiring all businesses providing public services (leaving the definition of this term so far undefined) to keep data centers,
and backup data centers, within national borders. All this suggests a different future for the Internet in 2020: no longer today’s single borderless
space, it might instead be a virtual world of “walled cities,” “gated communities,” “national clouds” or other unpleasant metaphors depicting
suspicion, fragmentation, and lost sense of global common good. Should this be the real future, the losses would be large. Money
which might finance new and more efficient servers, lay advanced fiber-optics to homes, launch satellites,
and research new services will instead be dissipated in building millions of redundant servers and paying
off the high cost they impose on developing-country power grids. (To put this in perspective, the United States today is
home to about a third of the world’s servers, and already uses about 2 percent of its power generation to store data.15) As the open protocols,
borderlessness, and transnational communities of the contemporary Internet fragment, some of the wealth gained through integration and larger
markets will never materialize; hopes for mHealth, financial inclusion, and other opportunities for working-class and poor communities would be
reduced in scale and delayed in time. Ultimately, the online world would be permanently diminished – likely not by the kind of crisis and collapse
which broke the global economy in the 1920s and the 1930s, but still emerging as something smaller, poorer, and more divided than it might have
been. 21st -CENTURY TRADE POLICY: THE AGENDA Here is the challenge for the American negotiators in the TPP, TTIP and TISA; and
for Congress as it considers Trade Promotion Authority. If the goal of 20th century policy was to reduce barriers and reopen a closed economy,
that of 21st -century policy would be to make such a chore unnecessary. This requires agreements that keep the Internet open while ensuring
rights to public-interest regulation; ensure that divergences in national policy do not rupture internet links; encourage the intellectual property and
liability policies that support online innovation, artistic creation, and the lively exchange of information; and continue bolstering policies that
encourage development of new and better information technology hardware. For the next three years, the goal would be to create a policy
consensus through the TPP, the TTIP, and the Trade in Services Agreement. The participants in these agreements – the U.S., Japan, the 28member European Union, Australia, New Zealand, Canada, Mexico, Peru, Chile, Singapore, Malaysia, Vietnam, and others - account for most
world services trade and are home to most of the world’s major Internet, software, and IT companies. Their ability to agree on the basis of 21st century trade policy would have a powerful (though of course not an inherently decisive) influence over future Internet policy, and would make it
far more likely that online trade will develop as it should. If the agreements are the goal, the Trade Promotion Authority bill is a chance for
Congress to set the parameters of these agreements. As it works through the bill, it should keep in mind the following goals: 1. Free Data Flow:
All three agreements should ensure that data flows freely across borders, unless there is a clear and published reason based in negotiated marketaccess limits for services or public-interest regulation in areas specified as exceptions (i.e. for national security, crime control, public morals, and
so on). The Joint Statement by the U.S. and European Union two years ago is a point of departure: Cross-Border Information Flows:
Governments should not prevent service suppliers of other countries, or customers of those suppliers, from electronically transferring information
internally or across borders, accessing publicly available information, or accessing their own information stored in other countries. Agreements
need also to specify, using standard General Agreement on Trade in Services “exceptions” terminology and ‘least trade-restrictive’ regulatory
principles, that governments have rights to limit and sometimes prevent flows of data, so long as they do so in a nondiscriminatory way with a
clear public-good purpose, e.g. to fight spam; enforce laws against pornography, hate speech, libel, and other abuses; or endanger the public by
(for example) publishing guides to production of sophisticated weapons or names of intelligence agents, and do so in a way that meets the
objectives with the least restriction to data. 2. Discourage or Ban Forced Data Localization: Companies using the Internet should be free to store
data in the most efficient ways, avoiding the expense and wasteful use of electric power needed to manage redundant data centers spread around
dozens of countries. The agreement would create this principle, with specified exceptions for clearly valid public-policy reasons or particularly
sensitive data. Again the U.S.-EU statement of 2011 provides a foundation which can be made binding through the T-TIP and TPP: Local
Infrastructure: Governments should not require ICT service suppliers to use local infrastructure, or establish a local presence, as a condition of
supplying services. 3. Open Markets for Services: Agreements should include a comprehensive set of marketaccess rights for services, based on a
“negative-list” approach that requires countries to specify the areas in which rights to sell (either from investment or across borders) will be
subject to limits, and what these limits will be. 4. Mechanisms for Privacy-Policy Compatibility: Rather than setting a single global standard –
likely impossible given differences of law created since the 1990s, and different privacy priorities in different countries – trade agreements should
include “Safe Harbor” clauses which enable businesses to be certified as meeting national standards and therefore enable them to shift data across
borders. One model is the Safe Harbor system negotiated between the US and the EU in 1999, in which American companies have been
‘certified’ by the European Commission as compliant with EU law; other options include mutual recognition agreements or alternative legal
mechanisms. 5. Trade Facilitation and De Minimis Rules: The TPP and TTIP should encourage development of express delivery services,
modern customs systems which use IT (and ideally “Single Windows), and high “de minimis’ waivers for tariffs to encourage trade in very small
shipments of goods. This includes rights to make deliveries via plane and ground transport, and zero-tariff policy for shipments of goods valued
at less than, say, $2,000, and capacity-building programs for developing-country partners involved in the TPP, notably Vietnam, Peru, and
Brunei, to ensure that they can fully participate in small-scale trade. 6. Standards-setting and approvals: Ensure transparent procedures for
approving new products, where possible through voluntary multi-stakeholder standards-setting procedures rather than processes entirely led by
governments. Where government-based approvals are essential, encourage use of approaches developed by FDA, CPSC, and other regulatory
agencies. 7. Online Intellectual Property: The administration in the Trans-Pacific Partnership has proposed a new formula for online copyright,
joining traditional advocacy for high standards of copyright protection for authors and software with explicit proposals reflecting U.S. doctrine on
limitations and exceptions of rights, and ‘safe harbor’ provisions based on Digital Millennium Copyright Act provisions limiting remedies against
intermediaries.16 This is a useful evolution of policy, continuing to support artists, authors and technological innovators, while as the U.S. Trade
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Representative observes also encouraging the technologies that develop search, data analytics, cloud computing, user-generated content, crowd
sourcing and other innovations. CONCLUSION Ultimately, then, “21st -century trade policy” differs from 20th-century trade policy because of
its mission: rather than an attempt to repair mistakes made in the past, it is an effort to preserve the possibilities of the future. Roosevelt and the
New Deal Congress in the 1930s were able to foresee, not in detail but in general, that a reintegrated world would be wealthier and more peaceful
than the one in which they lived. The 20th-century agreements which followed on their work have created a global and sophisticated economy for
goods trade, which raises many important questions and causes many stresses, but has made the world fundamentally wealthier and safer. In the
2010s as well, participants in the debate will not be able to see the details of the world economy of the 2030s. But there is good reason to believe
that they can imagine one better than ours, and devise a policy to help create it. This is the meaning of Kirk’s elusive phrase, and the hope of the
21st -century agreements policy is genuinely breaking new ground. As Congress argues out the terms of Trade Promotion Authority and debates
the TPP, it is not the only important question – but the answers they find may be the ones we remember as the 21st century wears on.
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Economy- Impact: Developing Economies- Big Data Key
Internet services allow leap-frogging by developing economies ONLY IF they avoid
hardware infrastructure costs.
Sara Agarwal & Parag Khanna ’15 (Director for International Finance Organizations at
Hewlett Packard. She has worked for Microsoft in Africa and at the African Development Bank
Parag Khanna is Senior Research Fellow at the New America Foundation, “Four Information
Communication Technologies (ICTs) for Big Development Breakthroughs,”
http://www.progressive-economy.org/wp-content/uploads/2015/05/HP-paper.pdf
The future ubiquity of mobile communications and the Internet offers a critical platform for economic growth, social equity, and massive
advances in the way education, healthcare, and other public goods are delivered—if developing countries can bridge the “digital divide”.
International Data Corporation predicts worldwide ICT spending will grow to more than $3.8 trillion in 2015, with spending in emerging markets
growing at a clip of 7.1 percent. The World Bank, other donors, NGOs, companies, and industry coalitions are collaborating through the
Information Communication Technologies for Development initiative known as ICT4D, to help countries “leapfrog” to the latest—or next—
technology standards. But four key technologies already exist to improve services including healthcare, education and transportation. To really
maximize the social benefits of new investments and partnerships in ICT, developing
country strategies need to focus on
how to make the best use of these existing tools and services and innovate the way those technologies
are adopted. Reforming procurement, mainstreaming technologies across programming, building local workforce skills, and deploying
innovating financing are all critical ways to make leapfrogging in ICTs a sustainable reality. Four Technologies with Big
Development Potential: Cloud, Social, Big Data and 3D Cloud Computing With cloud products, lowincome countries can standardize and digitize basic services such as document and workflow
management in a wide variety of settings, while outsourcing more complicated processes. By tapping
into shared infrastructure, governments can shift from the sunk costs of capital expenditure to the
adaptable costs of operational expenditure, thereby paying for only the services they subscribe to and
consume. Spending can focus on leasing or licensing technologies rather than acquiring expensive
hardware and backend systems that cost more upfront and require skilled technicians to maintain. Four
Information Communication Technologies (ICTs) for Big Development Breakthroughs In the Indian state of Karanataka, Hewlett Packard’s
eProcurement System now handles the full contracting process in a single online portal that reduces the potential for corruption and cut the
selection period from four months to one and a half months. In Turkey, where each municipality is responsible for its own public
transportation, transport software company Kentkart deployed a cloud-based real-time General Transit Feed Specification (GTFS) system that
allows all passengers with smartphones to view the live location and arrival times of buses and metros. Social Computing Real-time
communications and postings on social media comprise a vast set of data that can be analyzed to provide early warnings on critical public
concerns. Twitter feeds have provided indications of impending food shortages. Applications such as Google Flu Trends analyze search terms to
estimate and geo-locate flu outbreaks, enabling governments to improve delivery of flu vaccines. Social connections can also enable the
crowdsourcing of key data such as volunteer-based mapping to monitor deforestation or assess damage from natural disasters. Big Data Big
Data goes beyond social computing to interrelate and find correlations among data. Beyond achieving efficiencies through cloud computing, big
data informs decision-making processes to help countries optimize policy and social welfare. In Abijan, Ivory Coast, Orange Telecom launched a
program called Data for Development that used 15 million anonymized mobile phone call data-points to correlate commuting patterns to public
transportation schedules. The results were used to redraw the city’s major bus routes, reducing congestion and cutting commuting time. GE’s
new artificial intelligence software is being deployed in India. The software uses historical geo-location data to predict disease risk, which can
help determine where to best locate future hospitals. 3D Printing One of the most exciting new areas of technological innovation with profound
implications for developing countries is 3D printing (formally known as additive manufacturing), which allows geometrically complex objects to
be fabricated using 3D model data and material printing devices. 3D printed matter can be used to make everything from product prototypes to
replacement parts for industrial appliances. Small-scale manufacturers and entrepreneurs can now produce items that would previously have
required a much larger upfront investment. TED fellow Marcin Jakubowski recently launched the “Global Village Starter Kit” that collects
blueprint and designs for agricultural tools that can be 3D printed and used by farmers wherever the kit is deployed, reducing the cost and time
required to replace worn or broken tools. In basic healthcare, 3D printers are being used to make hearing aids, enabling large-scale treatment
of hearing loss at more affordable prices. Overcoming Hurdles to Adoption Developing country governments are under pressure to improve
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public sector service delivery amidst resource and capacity constraints. Breakthroughs in low-cost, high impact technologies can bridge market
failures in infrastructure provision, enable more effective and equitable provision of education and healthcare, and create new models for
reaching the poorest citizens. These digital breakthroughs hold the potential to deliver important social benefits, but only if we innovate how
new technologies are adopted. What then can be done to accelerate the adoption of these technologies across societies in emerging markets?
MODERNIZE PROCUREMENT APPROACHES: The World Bank recently tendered a request for 3500 computers for the Ukrainian government. But
after consultation with the private sector, the government decided a Virtual Desktop Infrastructure (VDI) offered a better and more costeffective option by substituting for in-house data service centers. The World Bank’s existing procurement rules, however, did not allow for this
switch to this system. A two-part procurement process— inviting feedback on the tender to determine the best solution prior to the second
phase of actual procurement—would help bring innovation into future procurement processes. CROSS-FERTILIZE ICT SOLUTIONS INTO
DEVELOPMENT PROGRAMMING: Donors tend to stovepipe technology programs, missing opportunities to mainstream low-cost ICT across
programs, which would spread the benefits of these new breakthroughs. The World Bank has launched an Open Development Technology
Alliance to leverage the broad base of ICT knowledge residing in companies, governments, academia and civil society and share insights with
their national clients. This is a good first step, but such practices must reside within developing country governments themselves as well. With
donor support, governments can set up “innovation officers” whose main duty is to spread innovative solutions across public services areas.
ENHANCE WORKER TRAINING IN ICTS: Fully leveraging the benefits of new technologies requires training people in the management of
operation of IT systems, analytics, and engineering. Investment in vocational education that links learning institutions to the labor market is
especially relevant in developing countries. The private sector can play a critical role in spurring the creation of more market relevant
educational modes. ADOPT BLENDED FUNDING MODELS: The challenge of financing the adoption of innovative technologies can be addressed
through blended funding models that deliver both economic and social returns. Business sales to governments could incorporate pay-per-use
models that require little to no upfront government investment, if backed by development organizations willing to absorb some of the risk.
Even the more expensive featured technologies such as cloud computing can incorporate these approaches. Impact bonds
are a new model in which private entities (whether companies or foundations) invest in complex technologies aimed at broad social benefit,
and collect financial returns from governments and donors when the results are demonstrated. HOW TO GET FROM HERE TO THERE The
private sector is deploying a wide variety of approaches to spur economic development through widespread access and adoption of ICTs, from
Microsoft’s 4Afrika Initiative to Cisco’s Networking Academies, to HP’s eProcurement Systems that enable e-government offerings at low cost.
Hardware and software breakthroughs such as the four discussed here make it possible for developing countries
to switch to a more modular and cost-effective strategy for leveraging technology for development. But
effective adoption of this spectrum of technologies in developing countries will require an all-of-the-above approach including innovative
approaches to procurement, integration of technologies into development programming, education to enhance market-driven ICT skills, and
long-term financial models.
If the stakeholders collaborating in the ICT4D focus on advancing these approaches, developing
countries can indeed catch-up and keep pace with global technology standards.
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Economy- Impact: Developing Economies- Leap-Frogging
Localization wrecks productivity in developing economies. Plan allows leap-frogging to
quickly reduce poverty and create economic and political stability.
Business Roundtable ‘12 (“Promoting Economic Growth through Smart Global Information
Technology Policy The Growing Threat of Local Data Server Requirements,” an association of
chief executive officers of leading U.S. companies with over $6 trillion in annual revenues and
more than 14 million employees)
When governments impose blanket restrictions on trade such as local data server requirements, they fight the battle for economic growth with
one hand tied behind their backs. The
service economy accounts for nearly 70 percent of both world economic
output and world employment, and yet these barriers restrict the potential of businesses to deliver
increased productivity and growth at a time of a crucial, fragile economic recovery in much of the
developed world. When trade barriers disrupt the free flow of lawful information, they can result in a slowing of technological innovation
and prevent companies from offering certain products and services, consequently dampening economic growth. These restrictions on services
trade also have a negative impact on growth specifically in developing countries. Services
trade is a conduit for leapfrogging
the traditional path of economic development (the “agriculture to manufacturing to services” model). In the 21st century,
nations have the potential to advance directly into services at an internationally competitive level, due
to the scalability and efficiency of IT platforms such as the Internet and other global networks. But
barriers such as local data server requirements limit these prospects. We are concerned that the disruptions that local
data server requirements and other services trade barriers bring to global economic growth are set to increase. Experts expect a
coming boom in services and infrastructure spending as the world moves beyond the financial crisis.
However, barriers to services trade will diminish the potential for growth. Additionally, because services trade
policies differ across countries, some countries’ potential for growth will be affected more negatively. The United States and the European
Union are mostly open, while several of the developing nations are not. Companies from more closed markets will have an unearned advantage
in profiting from the coming services and infrastructure boom if the governments of more open markets do not press for standards against
barriers such as local server data requirements.
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Solvency: Restrictions = Credibility 1/
The NSA surveillance programs destroyed US credibility- only substantial curtailment
restores industry legitimacy.
Laura K. Donohue ’15 (Georgetown University Law Center, “High Technology, Consumer Privacy, and
U.S. National Security,” http://scholarship.law.georgetown.edu/facpub/1457
)
Documents released over the past year detailing the National Security Agency’s (“NSA”) telephony
metadata collection program and interception of international content under the Foreign Intelligence Surveillance Act (FISA)
implicated U.S. high technology companies in government surveillance. 1 The result was an immediate,
and detrimental, impact on U.S. corporations, the economy, and U.S. national security. The first Snowden
documents, printed on June 5, 2013, revealed that the government had served orders on Verizon, directing the company to turn over
telephony metadata under Section 215 of the USA PATRIOT Act.2 The following day, The Guardian published classified slides detailing how the
NSA had intercepted international content under Section 702 of the FISA Amendments Act.3 The type
of information obtained
ranged from E-mail, video and voice chat, videos, photos, and stored data, to Voice over Internet
Protocol, file transfers, video conferencing, notifications of target activity, and online social networking. 4
The companies involved read like a who’s who of U.S. Internet giants: Microsoft, Yahoo, Google, Facebook, PalTalk, YouTube, Skype, AOL, and
Apple. . More articles highlighting the extent to which the NSA had become embedded in the U.S. high tech industry followed. In September
2013 ProPublica and the New York Times revealed that the NSA had enjoyed considerable success in cracking commonly used cryptography. 6
The following month the Washington Post reported that the NSA, without the consent of the companies involved, had obtained millions of
customers’ address book data. In one day alone, some 444,743 email addresses from Yahoo, 105,068 from Hotmail, 82,857 from Facebook,
33,697 from Gmail, and 22,881 from other providers.7 The
extent of upstream collection stunned the public, as did
slides demonstrating how the NSA had bypassed the companies’ encryption, intercepting data as it
transferred between the public Internet and the Google cloud. 8 Documents further suggested that the NSA had
helped to promote encryption standards for which it already held the key or whose vulnerabilities the
agency understood but had not taken steps to address. 9 Beyond this, press reports indicated that the NSA had at
times posed as U.S. companies—without their knowledge—in order to gain access to foreign targets. In
November 2013 Der Spiegel reported that the NSA and the United Kingdom’s Government Communications Headquarters (“GCHQ”) had
created bogus versions of Slashdot and LinkedIn, so that when employees from the telecommunications firm Belgacom tried to access the sites
from corporate computers, their requests were diverted to the replica sites that then injected malware into their machines.10 As
a result
of the growing public awareness of these programs, U.S. companies have lost revenues, even as nonU.S. firms have benefited. 11 In addition, numerous countries, concerned about consumer privacy as well as
the penetration of U.S. surveillance efforts in the economic and political spheres, have accelerated data
localization initiatives, begun restricting U.S. companies’ access to local markets, and introduced new
privacy protections, with implications for the future of Internet governance and U.S. economic growth.
These effects raise attendant concerns about U.S. national security. It could be argued that some of these effects, such as data localization
initiatives, are merely opportunistic—i.e., other countries are merely using the NSA revelations to advance national commercial and political
interests.12 Even if true, however, the
NSA programs provide other countries with an opportunity. They have
weakened the U.S. hand in the international arena. Congress has the ability to redress the current
situation. First, and most importantly, reform of the Foreign Intelligence Surveillance Act would provide
for greater restrictions on NSA surveillance. Second, new domestic legislation could extend better
protections to consumer privacy. These shifts would allow U.S. industry legitimately to claim a change
in circumstance, which would help them to gain competitive ground. Third, the integration of economic
concerns at a programmatic level within the national security infrastructure would help to ensure that
economic matters remain central to national security determinations in the future.
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Solvency: Restrictions = Credibility 2/
Only limiting NSA programs can restore data credibility.
Danielle Kehl ’14 (with Kevin Bankston, Robyn Greene & Robert Morgus, analysts at New America’s
Open Technology Institute, “Surveillance Costs: The NSA’s Impact on the Economy, Internet Freedom &
Cybersecurity,” July, https://static.newamerica.org/attachments/534-surveillance-costs-the-nsasimpact-on-the-economy-internet-freedom-cybersecurity/Surveilance_Costs_Final.pdf)
The United States must act immediately to restore the credibility of the Internet Freedom agenda, lest it
become another casualty of the NSA’s surveillance programs. As described in Part IV, various agencies within the U.S.
government have taken initial steps to demonstrate goodwill in this area, particularly through the NTIA’s announcement that it intends to
transition stewardship of the IANA functions to a global multistakeholder organization and the State Department’s speech outlining six
principles to guide signals intelligence collection grounded in international human rights norms. However, it will take a broader effort from
across the government to demonstrate that the United States is fully committed to Internet Freedom, including firmly establishing the nature
of its support for the evolving multistakeholder system of Internet governance and directly engaging with issues raised by the NSA surveillance
programs in international conversations. Supporting
international norms that increase confidence in the security of
online communications and respect for the rights of Internet users all around the world is integral to
restoring U.S. credibility in this area. “We have surveillance programmes that abuse human rights and lack in transparency and
accountability precisely because we do not have sufficiently robust, open, and inclusive debates around surveillance and national security
policy,” writes Matthew Shears of the Center for Democracy & Technology.339 It is time to begin having those conversations on both a national
and an international level, particularly at key upcoming Internet governance convenings including the 2014 Internet Governance Forum, the
International Telecommunications Union’s plenipotentiary meeting, and the upcoming WSIS+10 review process.340 Certainly, the
United
States will not be able to continue promoting the Internet Freedom agenda at these meetings without
addressing its national security apparatus and the impact of NSA surveillance on individuals around the world.
Rather than being a problem, this presents an opportunity for the U.S. to assume a leadership role in the
promotion of better international standards around surveillance practices. Moreover, the U.S. should take steps to
further internationalize its Internet Freedom efforts writ large and work with foreign governments to broadly promote democracy and human
rights online. In 2011, Richard Fontaine and Will Rogers of the Center for a New American Security wrote that “the United States should
counter the view that Internet Freedom is merely an American project cooked up in Washington, rather than a notion rooted in universal
human rights… The response to [concerns about the Internet Freedom agenda’s ties to U.S. foreign policy should be] to internationalize the
effort.”341 Today, more
than ever, it is critical that the United States heed this advice and take steps to
broaden the base of support for the Internet Freedom agenda. Future meetings and activities of the Freedom Online
Coalition, which the State Department played a key role in convening, will serve as one test of these efforts as the group attempts to transition
from a discussion forum for like-minded governments into a more action-oriented coalition.342 The United States has the opportunity to urge
other member countries to live up to the commitments they made at the 2014 meeting in Tallinn with respect to accountability, transparency,
and other policies grounded in human rights. As Toomas Hendrik Ilves, the President of Estonia, articulated in his remarks at the 2014 meeting,
“We must be honest with ourselves and admit that recent developments regarding purported surveillance by the NSA and similar organisations
in different countries make the defense of an open Internet more difficult. That, too, is a challenge that Freedom Online Coalition must
face.”343 Outside of the Freedom Online Coalition, but consistent with its goals, the U.S. can urge both companies and foreign governments to
join organizations like the Global Network Initiative or commit to other voluntary processes that promote the centrality of human rights in the
policymaking process.3
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Solvency: Reframing Solves Opposition
The plan reframes surveillance as an economic failure: this will leverage support from
developing countries.
Jonah Force Hill ‘14 (technology and international affairs consultant based in San Francisco and
a Fellow of the Global Governance Futures program, “THE GROWTH OF DATA
LOCALIZATION POST-SNOWDEN: ANALYSIS AND RECOMMENDATIONS FOR U.S.
POLICYMAKERS AND BUSINESS LEADERS”)
Work to reframe the privacy and surveillance discussion to one of security and economics
Localization has been debated since the beginning of Snowden’s revelations largely as an answer
to privacy and surveillance concerns. Certainly, there is another “narrative” worthy of
discussion, and to that end industry should work to alter the one-sided nature of the current discussion
by including the issues of cybersecurity, cyber crime, economic integration, and Internet freedom. For
developed countries, messaging to counter localization should focus on the urgent need to
combat cybercrime and improve cyber security,128 the adverse effects on freedom of expression,
and interference with the expansion of Internet-borne commerce at just the time that their
economies are emerging from the Great Recession. These views might resonate within developing
countries as well, as would the additional argument that localization could leave them permanently on the
poorer side of the “digital divide.”
91
2AC Frontlines
92
Cyber-Security Frontline 1/
Turn: NSA Over-reach wrecks security- 5 Warrants:
 Emboldens hostile actors
 Undermines global norms
 Distracts from more genuine threats
 Weakens US leverage on security cooperation
 Drives traffic underground
Laura K. Donohue ’15 (Georgetown University Law Center, “High Technology, Consumer Privacy, and
U.S. National Security,” http://scholarship.law.georgetown.edu/facpub/1457
)
C. Unintended Harmful Consequences There are various ways in which the NSA’s apparent failure to take account of the potential impact of
public knowledge of the programs on U.S. industry may have acted to undermine U.S. security beyond weakening the economy. The
backlash risks shielding foreign government actions from public scrutiny. It potentially undermines the
ability of the United States to develop international norms against ubiquitous surveillance, which can be used
for political or economic espionage. And it raises the possibility that the country will lose digital sight of active
threats against the United States. As was previously noted, the data localization movement, given momentum
by the NSA revelations, risks the creation of distinct, parallel Internets, which would stifle the free flow
of information that connects not just economies, but cultures and people, with potential rollbacks for an
increasingly globalized world. This would affect the country’s interest in democratic engagement and it
would harm the United States’ international reach. The creation of national search engines, national email systems, and
national social networks, moreover, means that foreign governments will have direct control over electronic communication networks,
facilitating censorship and domestic surveillance and limiting outside view of the extent to which such
steps are being taken. When Turkish Prime Minister Recep Erdoğan, for instance, tried to shut town Twitter, the international
community was immediately put on notice. 111 #TwitterisblockedinTurkey #dictatorerdogan, and #occupytwitter quickly moved to popular
trending topics internationally. 112 The United States, EU, and others formally objected to the action through diplomatic channels. Had Turkey
been an isolated network, it may have secretly censored the politically damaging information (in this case, leaks revealing corruption in the
Erdoğan government), without generating such immediate, international attention. Along the same lines, in July 2014 President Vladimir Putin
signed a new law requiring Internet companies to store all Russian users’ data within domestic borders. Russia’s media and parliament
members have used Edward Snowden’s leaks about NSA spying to rally support for the new law. 113 The legislation, though, serves to intensify
Putin’s control over Internet companies. 114 With internal data centers, it will be easier for the Russian president to enforce censorship policies
and to collect information about members of the political opposition. The law could also give Putin an excuse to shut down major social media
networks if they fail to comply with the new regulations. The NSA revelations also have undermined U.S. credibility in challenging other
countries’ efforts to obtain trade secrets and other information through state surveillance. China provides one of the strongest examples.
Because of the NSA programs, U.S. objections to China selling surveillance technology to oppressive
regimes look rather weak. Post-Snowden, Chinese efforts have become even more public and
devastating to U.S. interests. Since 2005, when President Mahmoud Ahmadinejad first took office, Iran has stated its plan to develop
a national Internet network.115 In the intervening decade, the country has been unable to do so. But in January 2014 Iran’s Ministry of
Communications and Information Technology announced that China would officially be collaborating with them on the creation of the National
Information Network. 116 Part of Iran’s aim has been to develop a system that allows the country to turn off the international components of
the Internet, in a way that will enable the government and domestic banking industry to continue to operate. With more than half the
population under age 35, Iran has a tech-savvy citizenry, which has, to date, found various ways around government efforts to block social
media and other international sources. It is not clear whether Iran will be able to completely divest itself of access to the world wide web. What
is clear is that in a post-Snowden era, their efforts to do so are being facilitated by countries with interests diametrically opposed to the United
States. Online
warfare between China and the United States simmered in the background, until in early
2013 the Obama Administration began to make it center stage. In January 2013, the New York Times reported that
Chinese hackers had infiltrated its computers following a threat that if the paper insisted on publishing a story about its prime minister,
93
consequences would follow. 117 The following month, a security firm, Mandiant, revealed that the Chinese military unit 61398 had stolen data
from U.S. companies and agencies. 118 In March 2013 President Obama’s national security advisor publicly urged China to reduce its
surveillance efforts—after which classified documents leaked to the public demonstrated the extent to which China had infiltrated U.S.
government servers. 119 In May 2013, the National Security Advisor flew to China to lay the groundwork for a summit, in which cyber
surveillance would prove center stage.120 Two days before the Obama-Xi meeting was scheduled to take place, The Guardian ran the first story
on the NSA programs. 121 On June 7, when Obama raised the question of Chinese espionage, Xi responded by quoting the Guardian and
suggesting that the U.S. should not be lecturing the Chinese about surveillance.122 Although differences may mark the two countries’
approaches to surveillance (e.g., in one case for economic advantage, in the other for political or security advantage), the
broader
translation for the global community has been one in which the United States has lost high ground to try
to restrict cyber-surveillance. A final point is worth noting in this context: namely, to the extent that nonU.S. companies are picking
up customers and business overseas, the United States’ ability to conduct surveillance may be further harmed—thus going directly to the
country’s national security interests. In other words, it may be in the country’s best interests to keep traffic routed through U.S. companies,
which would allow the national security infrastructure, with appropriate legal process, to access the information in question. The
apparent
overreach of the NSA, however, may end up driving much of the traffic elsewhere, making it harder for
the United States to obtain the information needed to protect the country against foreign threats.
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Cyber-Security Frontline 2/
4 More Bonus Warrants for Your Flowing Pleasure:
 Total Defense: location is irrelevant to data security
 Weakened Industry destroys security infrastructure- private tech key
 Plan is a prerequisite: Only international cooperation can solve cyber security
 On-Balance: Countries that are pushing localization have weaker infrastructure.
Jonah Force Hill ‘14 (technology and international affairs consultant based in San Francisco and
a Fellow of the Global Governance Futures program, “THE GROWTH OF DATA
LOCALIZATION POST-SNOWDEN: ANALYSIS AND RECOMMENDATIONS FOR U.S.
POLICYMAKERS AND BUSINESS LEADERS”)
Data Localization: An Unsound Policy Whatever mix of purposes constitute the “true” motivations behind the data localization movement,
whether domestic industry protectionism, political opportunism, or a genuine – if misplaced – desire for improved data privacy and security, the
reality is that data localization, in all of its various forms, creates serious problems without offering many, if any, actual benefits. The problems
are manifest not just on a global scale of the efficiency of the Internet, but critically for the specific countries considering the policies. Moreover,
some of the localization proposals under consideration – specifically, limitations on data flows to or around
specific geographies – would likely require a fundamental restructuring of the Internet’s core technical
architecture and governance systems, a restructuring that carries with it its own serious drawbacks. Security
and Counter-Surveillance Objectives are Not Well Served Looking first at data security (the enhancement of which is the ostensible reason for
most localization proposals), there is little reason to believe that any of the proposals under consideration would do much, if anything, to mitigate
the problems as they have been defined. Data security is ultimately not dependent on the physical location of the data
or the location of the infrastructure supporting it. Data breaches can and do occur anywhere. Security is instead
a function of the quality and effectiveness of the mechanisms and controls maintained to protect the data in question. Has an Internet service
organization put in place comprehensive security policies, and has it routinely audited its software and infrastructure to identify and address
security vulnerabilities? These are the useful procedures to protect data. Hence, as a purely technical issue (i.e., irrespective of matters of law and
politics), there are few reasons to suspect that a server in Germany will be any safer from attack by those
seeking to access information than is a server in the United States, or in Costa Rica for that matter, assuming that they
use the same technology and follow the same security procedures. Advocates for data localization who understand this fact often point to
jurisdictional differences between nations as a reason to keep data local. Data stored in the U.S. is unsafe, they argue, because it can be obtained
by the NSA under legal coercion. Data localization (as a restriction on data storage abroad), they insist, would negate this risk. While this may be
true in certain respects, the argument omits an important reality, namely that while
locating data beyond the borders of
the United States might preclude the NSA or FBI from obtaining data via a subpoena or
other formal legal mechanism, moving data abroad could actually empower the NSA by
lowering the legal threshold required to obtain that same data by way direct intrusion into
foreign data servers or data links. As was mentioned briefly above, U.S. domestic law (as it is currently
written and interpreted) puts fairly strict limits on the collection of intelligence information on
American soil. Data capture outside the U.S., by contrast, even when that data is in the hands of
American firms, is in large measure legally permissible when there is a “national security
interest,” a fairly broad criterion. Data localization (as a local data requirement) could potentially
give the NSA greater freedom to mine data, not less.104 Furthermore, while moving data into the servers outside the
U.S. may prevent the U.S. government from obtaining certain types of data via subpoena (ignoring the direct intrusion distinction for a moment),
data localization in that form would, at the same time, give domestic intelligence agencies of the home country increased data collection powers
over their citizens’ data. Given the fact that it is those domestic agencies and their governments, and not the NSA and the United States, that can
more immediately impose and enforce coercive measures upon the citizens, those citizens need to ask themselves, first, which presents the greater
threat to their liberty generally, and to the security of their personal information in particular? And, once recognizing that one’s own government
may not be trusted to abjure obtaining data of its citizens, is a domestic company possessing the data more or less likely than a giant like Google
to knuckle under to the demands of one’s own government? With respect to most of the nations of the world, where there exist scant judicial
independence and little governmental transparency, the questions, I would argue, are answered in the asking.105 Ultimately,
the only
real solution to the kinds of security and surveillance problems brought into the open by
95
the Snowden disclosures lies in international negotiations, agreements, and the
development of norms of state behavior. But besides that, what matters is whether or not the organizations hosting the
data are protecting that data with the best possible security mechanisms and technology available, and being as transparent as they can be about
how they cooperate with intelligence organizations. Accordingly, Internet users should have the freedom to decide which organizations, which
companies, are best equipped and able to protect security and offer transparency, whether a Google, an Amazon or a domestic provider. With a
number of studies showing that Brazil,106 Indonesia,107 and many of the other countries
considering localization are
among the least well-equipped nations to protect their data, the argument that limiting
competition in the market, limiting the options available to firms, and potentially
jettisoning the most security-competent technology companies available would somehow
improve security, rather than degrade it, is nonsense.
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Cyber-Security Frontline 3/
And 1 More independent Mechanism: NSA surveillance destroys trust in Data
Integrity- which wrecks data security at the core.
Danielle Kehl ’14 (with Kevin Bankston, Robyn Greene & Robert Morgus, analysts at New America’s
Open Technology Institute, “Surveillance Costs: The NSA’s Impact on the Economy, Internet Freedom &
Cybersecurity,” July, https://static.newamerica.org/attachments/534-surveillance-costs-the-nsasimpact-on-the-economy-internet-freedom-cybersecurity/Surveilance_Costs_Final.pdf)
We have previously focused on the economic and political repercussions of the NSA disclosures both in the United States and abroad. In this
section, we consider the impact on the Internet itself and the ways in which the
NSA has both weakened overall trust in the
network and directly harmed the security of the Internet. Certainly, the actions of the NSA have created a serious trust
and credibility problem for the United States and its Internet industry. “All of this denying and lying results in us not trusting anything the NSA
says, anything the president says about the NSA, or anything companies say about their involvement with the NSA,” wrote security expert
Bruce Schneier in September 2013.225 However, beyond undermining faith in American government and business, a variety of the NSA’s
efforts have undermined trust in the security of the Internet itself. When Internet users transmit or store their information using the Internet,
they believe—at least to a certain degree—that the information will be protected from unwanted third-party access. Indeed, the continued
growth of the Internet as both an economic engine and an as avenue for private communication and free expression relies on that trust. Yet, as
the scope of the NSA’s surveillance dragnet and its negative impact on cybersecurity comes into greater focus, that trust in the Internet is
eroding.226 Trust
is essential for a healthy functioning society. As economist Joseph Stiglitz explains, “Trust
is what makes contracts, plans and everyday transactions possible; it facilitates the democratic process,
from voting to law creation, and is necessary for social stability.” Individuals rely on online systems and
services for a growing number of sensitive activities, including online banking and social services, and
they must be able to trust that the data they are transmitting is safe. In particular, trust and authentication are
essential components of the protocols and standards engineers develop to create a safer and more secure Internet, including encryption.228
The NSA’s work to undermine the tools and standards that help ensure cybersecurity—especially its
work to thwart encryption—also undermines trust in the safety of the overall network. Moreover, it
reduces trust in the United States itself, which many now perceive as a nation that exploits
vulnerabilities in the interest of its own security.220 This loss of trust can have a chilling effect on the
behavior of Internet users worldwide.230 Unfortunately, as we detail below, the growing loss of trust in the security of Internet
as a result of the latest disclosures is largely warranted. Based on the news stories of the past year, it appears that the Internet is far less secure
than people thought—a direct result of the NSA’s actions. These actions can be traced to a core contradiction in NSA’s two key missions:
information assurance—protecting America’s and Americans’ sensitive data—and signals intelligence—spying on telephone and electronic
communications for foreign intelligence purposes. In the Internet era, these two missions of the NSA are in obvious tension. The widespread
adoption of encryption technology to secure Internet communications is considered one of the largest threats to the NSA’s ability to carry out
the goals of its signals intelligence mission. As the National Journal explained, “strong Internet security actually makes the NSA’s job
harder.”231 In the 1990s, the NSA lost the public policy battle to mandate that U.S. technology companies adopt a technology called the
“Clipper Chip” that would give the government the ability to decrypt private communications,232 and since then strong encryption technology
has become a bedrock technology when it comes to the security of the Internet. The NSA lost that early battle against encryption, sometimes
called the “Crypto War,”233 not only due to vocal opposition from privacy and civil liberties stakeholders, but also because the private sector
convinced policymakers that subverting the security of American communications technology products would undermine the U.S. technology
industry and the growth of the Internet economy as a whole.234 However, as an explosive New York Times story first revealed in September
2013, the NSA has apparently continued to fight the “Crypto War” in secret, clandestinely inserting backdoors into secure products and working
to weaken key encryption standards.235 “For the past decade, N.S.A.
has led an aggressive, multipronged effort to break
widely used Internet encryption technologies,” said a 2010 memo from the Government Communications Headquarters
(GCHQ), the NSA’s British counterpart. “Cryptanalytic capabilities are now coming online. Vast amounts of encrypted Internet data which have
up till now been discarded are now exploitable.” Given the amount of information the NSA is collecting, it is not surprising that the agency
would also take aggressive steps to improve its ability to read that information. According to the “black budget” released by The Washington
Post in August 2013, 21 percent of the intelligence budget (roughly $11 billion) goes toward the Consolidated Cryptologic Program, with a staff
97
of 35,000 in the NSA and the armed forces’ surveillance and code breaking units.237 “The resources devoted to signals intercepts are
extraordinary,” wrote Barton Gellman and Greg Miller.238 However, the agency has employed a variety of methods to achieve this goal far
beyond simple code-breaking—methods that directly undermine U.S. cybersecurity, not just against the NSA, but also against foreign
governments, organized crime, and other malicious actors. In this section, we consider four different ways that the
NSA has damaged
cybersecurity in pursuit of its signals intelligence goals: (1) by deliberately engineering weaknesses into
widely-used encryption standards; (2) by inserting surveillance backdoors in widely-used software and
hardware products; (3) by stockpiling information about security vulnerabilities for its own use rather
than disclosing those vulnerabilities so that they can be remedied; and (4) by engaging in a wide variety
of offensive hacking techniques to compromise the integrity of computer systems and networks around
the world, including impersonating the web sites of major American companies like Facebook and LinkedIn.
98
Cyber-Security EXT
NSA surveillance is counterproductive after Snowden because it deters storing data in
the US or passing data through US servers.
Laura K. Donohue ’15 (Georgetown University Law Center, “High Technology, Consumer Privacy, and
U.S. National Security,” http://scholarship.law.georgetown.edu/facpub/1457
)
III. ECONOMIC SECURITY AS NATIONAL SECURITY The NSA programs illustrate lawmakers’ failure to
recognize the degree to which economic strength is central to national security, as well as the
importance of the high technology industry to the U.S. economy. The concept of economic security as
national security is not new: the Framers and the generations that followed acknowledged the
importance of economic strength as central to national security. Our more recent understandings,
however, have gotten away from the concept, in the process cleaving important interests out of the
calculations required to accurately understand the implications of government actions. Unintended
consequences have resulted. The Snowden leaks, for instance, may have driven bad actors to seek nonU.S. companies for ISP services, creating gaps in insight into their operations. They have also
undermined U.S. efforts to call other countries to heel for their exploitation of international
communications to gain advantages over U.S. industry. In sum, the expansive nature of the programs
may well have acted to undermine U.S. national security in myriad ways linked to the country’s
economic interests.
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Topicality: Domestic Surveillance 1/
PRISM grabs data off SEVERS HELD INSIDE the US.
Jonah Force Hill ‘14 (technology and international affairs consultant based in San Francisco and
a Fellow of the Global Governance Futures program, “THE GROWTH OF DATA
LOCALIZATION POST-SNOWDEN: ANALYSIS AND RECOMMENDATIONS FOR U.S.
POLICYMAKERS AND BUSINESS LEADERS”)
U.S. Companies Deemed Untrustworthy For a great many around the globe, the Snowden disclosures revealed a disturbing relationship
between the major U.S. technology firms and the American national security establishment. Specifically, the disclosures showed that Yahoo,
Google, and other large American tech companies had provided the NSA with access to the data of the users of their services. Although there
were many programs that tied the major American firms to the NSA, three in
particular drew special ire: the much-discussed
PRISM program, a collaborative effort between the NSA and the FBI which compelled Internet companies to hand over
data held within servers located on U.S. soil in response a subpoena issued by a special intelligence court, and two programs
known as MUSCULAR and TEMPORA,89 both of which allowed the NSA (in partnership with Britain’s signals intelligence agency, the GCHQ) to
access information transmitted through the data communication links of American-owned firms located outside the U.S., where statutory
limitations on data collection are far less stringent. The
fact that American companies provided the U.S. government
with information and access to data (knowingly in some cases, apparently unwittingly in others) has led many foreign
leaders to conclude that only domestic firms – or at least non-American firms – operating exclusively within
local jurisdictions, can be trusted to host the data of their citizens. Prominent political voices around the globe have
been anything but subtle in their articulation of this assessment. Following the publication of the PRISM program in the Guardian newspaper,
German Interior Minister Hans-Peter Friedrich declared that, “whoever fears their communication is being intercepted in any way should use
services that don't go through American servers.”11 France’s Minister for the Digital Economy similarly insisted that it was now necessary to
“locate datacenters and servers in [French] national territory in order to better ensure data security.”12 Brazilian President Dilma Rousseff
agreed, insisting that, "there is a serious problem of storage databases abroad. That certain situation we will no longer accept."13
Unsurprisingly, these declarations from government officials at the ministerial level and higher, and the policy responses those declarations
suggest, are profoundly troubling to American technology companies. U.S.
firms have issued dire warnings in response,14
predicting that they could lose tens of billions of dollars in revenue abroad as distrustful foreign governments and
customers move – either by choice or by legal mandate – to non-U.S. alternatives. Firms fear that the anti-American backlash and potentially
resulting data localization laws (depending on the specifics of the rules enacted) will mean that they will be forced out of certain markets, or
forced to build expensive – and oftentimes unnecessarily redundant – data centers abroad. Analysts are suggesting the fallout could mirror
what happened to Huawei and ZTE, the Chinese technology and telecommunications firms that were forced to abandon some U.S. contracts
when American lawmakers accused the companies of planting in their products coding “backdoors” for the Chinese People’s Liberation Army
and intelligence services. 15 A
much-cited estimate16 by the Information Technology and Innovation
Foundation, an independent think-tank, confirmed American tech firms’ worst fears when it opined that
the U.S. cloud computing industry alone could lose between $21.5 billion and $35 billion over the next
three years as a result of the NSA backlash.17
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Topicality: Domestic Surveillance 2/
Section 702 allows NSA collection of server data IN THE UNITED STATES. There are also
separate programs OUTSIDE of the UNITED STATES.
Danielle Kehl ’14 (with Kevin Bankston, Robyn Greene & Robert Morgus, all are analysts at New
America’s Open Technology Institute, “Surveillance Costs: The NSA’s Impact on the Economy, Internet
Freedom & Cybersecurity,” July, https://static.newamerica.org/attachments/534-surveillance-costs-thensas-impact-on-the-economy-internet-freedom-cybersecurity/Surveilance_Costs_Final.pdf)
Over the course of the past year, the world has learned that this bulk collection program was just one
small part of the NSA’s massive surveillance apparatus.4 Just a day after the first leak, The Washington
Post ran a story about PRISM, the NSA’s “downstream” collection program authorized under Section 702
of the Foreign Intelligence Surveillance Act (FISA). Under the PRISM program, the NSA compels major
tech companies like Google, Yahoo, Microsoft, Facebook, and Twitter to turn over the contents of
communications stored on company servers that have been sent or received by targets that the NSA
reasonably believes are outside of the United States.5 While few details are known about the programs
the NSA operates under Section 702, and several of the details regarding the PRISM program are a
subject of debate,6 a declassified 2011 Foreign Intelligence Surveillance Court opinion revealed that the
NSA collects more than 250,000,000 Internet communications annually using Section 702 and that “the
vast majority of these communications are obtained from Internet service providers” through the PRISM
program.7 The remainder of those communications comes from Section 702 surveillance that is
conducted “upstream”—that is, surveillance conducted not by obtaining stored communications from
cloud providers’ servers but by tapping directly into the U.S. Internet backbone network that carries
domestic, international, and foreign communications.8 Beyond NSA surveillance inside the United States
under Section 215 and Section 702, the NSA engages in massive surveillance of Internet and telephone
communications outside of the country as well.
101
K Frontline
Turn: Counter-hegemonic discourse feeds data localization.
Jonah Force Hill ‘14 (technology and international affairs consultant based in San Francisco and
a Fellow of the Global Governance Futures program, “THE GROWTH OF DATA
LOCALIZATION POST-SNOWDEN: ANALYSIS AND RECOMMENDATIONS FOR U.S.
POLICYMAKERS AND BUSINESS LEADERS”)
Populist Politics and Anti-Globalization Finally, data localization makes for good old-fashioned populist politics, useful in democratic and
authoritarian governments alike. People around the world have been deeply and genuinely unsettled by the Snowden revelations. They see the
NSA and the United States generally as engaged in the flagrant and comprehensive violation of their privacy, foreshadowing perhaps an
Orwellian future to come.101 Data localization not only seems to offer a simple response to this American challenge to privacy, simple for
politicians to explain and simple for citizens to understand. It also serves as a political repudiation not only of dragnet surveillance generally, but
of the American government and the American tech sector that is complicit in that government’s misconduct. AntiAmericanism is nothing new,
nor is its sometimes cynical use by politicians. But in the digital age, it has new faces: Google instead of Coca-Cola, and the government
employee with a computer rather the soldier with an M-16 rifle. In an environment in which most Germans consider Edward Snowden a hero,
102 not a villain, and more than a million Brazilians signed a petition requesting that President Rousseff grant Mr. Snowden asylum,103 data
localization is political gold. The
link between data localization programs and populist politics may
also be drawing on a climate of anti-globalization and a desire to move away from a
globally integrated, and perhaps American-hegemonic, Internet. Of course, globalization is understood by
its critics to be broader than the ambitions of the United States. Nevertheless, it is above all the United States and its enormously powerful
companies that represent all that the critics find morally suspect in globalization. And no
American companies have an
international reach comparable to that of the great tech companies. A cab driver in Rio, a fruit vendor in Cairo or
an elementary school teacher in Delhi may have never heard of JP Morgan, but they are likely to encounter Google and Facebook daily. These
companies have become the face of American power in the early decades of the Twentieth
Century, and however useful they may be in the lives of these people, they are intrusive in a way
that no bank can ever be. They, together with the NSA with which they now linked, are seen by
millions to be exercising subtle and nefarious power that reaches into every neighborhood and
home. How can foreign governments rein in that power, and seem to respond to popular demands to be protected from these forces from
abroad? Data localization schemes may be one response. As I argue below, localization in fact will not accomplish this or most any other
desirable objective, but for now antiglobalization
provides a forceful political impetus to plans to restrict
the reach of those companies.
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