CEI Joins ATR Letter Urging U.S. Action on Korea’s Digital Trade Barriers

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Dear President Trump:
We write to thank you for your continued leadership in protecting American Innovators from unfair and discriminatory foreign digital policies.


The Republic of Korea has imposed a series of discriminatory barriers to digital trade that limit market access and restrict American competitiveness in the country. These policies disproportionately impact American technology firms, some of which are effectively barred from offering their world-class services in specific sectors in Korea.

U.S. technology enterprises deserve full, fair, and reciprocal market access to all industry domains in the ROK. This is already the animating spirit of the Korea-
U.S. Trade Agreement. We urge you to secure firm commitments from the ROK that will make this a reality today.


First, there are currently several proposals in Korea’s legislature, which have been endorsed by Korean President Lee Jae-myung, that seek to regulate “online platforms of a certain size,” further expanding the Korea Fair Trade Commission (KFTC)’s authority to target American companies. Similar to the EU’s Digital Markets Act, these proposals would stifle leading American companies while benefiting Korean and Chinese competitors that would not be subject to the regulation. These legislative proposals, if passed, would put significant restrictions, risks, and obligations on American companies, such as requiring disclosure of proprietary information, placing arbitrary caps on service fees, preventing standard business practices, opening the door to fraudulent transactions and permitting a bureaucratic body–the KFTC-the ability to shut down operations while threatening substantial fines.

American companies are further disadvantaged by strict data localization requirements put in place for “security concerns,” which prevent access to Korea’s $7.6 billion location-based services market. Among these is an approval requirement for the export of mapping data —for which no American company has ever been granted. Instead, the ROK has responded with completely unworkable demands that add significant operational burdens to American companies while failing to actually enhance security, making it clear they are simply trying to protect domestic competitors. These restrictions prevent the free flow of information necessary to innovate and punish American companies that rely on overseas data processing to provide their services.

In a similar fashion, Korea’s cloud security requirements effectively lock U.S. cloud service providers (CSPs) out of Korea’s public sector cloud market. These requirements include localizing all computing infrastructure, data, and personnel in Korea, and adopting encryption and certification requirements that do not align with international standards, making it prohibitive for US CSPs to comply. Your AI Action plan calls for exporting America’s full AI technology stack; these restrictions will prevent American cloud and AI providers from doing so.

This is a critical moment to ensure that Korea directly addresses its history of trade discrimination and future proof the relationship from regulatory threats. Without a strong U.S. response, this abuse of the U.S.-Korea relationship will only continue, undermining the competitiveness and market access of American companies. We stand ready to support these efforts to stand up for American interests as our innovators lead us into a new golden age.

Sincerely,

Grover Norquist                                                               

President                                                             

Americans for Tax Reform                                                                

Lorenzo Montanari

Executive Director

Property Rights Alliance

James Erwin                                                                     

Executive Director                                                              

Digital Liberty                                                                   

Ryan Ellis

President

Center for a Free Economy

Paul Gessing                                                                   

President                                                              

Rio Grande Foundation                                                              

David Williams

President

Taxpayer Protection Alliance

Daniel Erspamer                                                                   

CEO                                                              

Pelican Institute

Karen Kerrigan

President & CEO

Small Business and Entrepreneurship Council

Kent Kaiser                                                                       

Executive Director                                                                   

Trade Alliance                                                         

Iain Murray

Vice President for Strategy and Senior Fellow

Competitive Enterprise Institute

Jacob Jensen*                                                                      

Trade Policy Analyst                                                              

American Action Forum                                                                

Pete Sepp

President

National Taxpayers Union

*Indicates Individual Signer