Robert Muggah is a principal of SecDev Group and founder of the Igarape Institute. Rafal Rohozinski is a principal of the SecDev Group.
The U.S.-China dispute just took a dangerous turn. Late last week, the U.S. government issued three separate measures – two executive orders imposing sanctions on social-media networks WeChat and TikTok, and another to set up a “clean network” program – that, come mid-September, would prohibit any U.S. citizen or company from conducting business with those apps’ Chinese parent companies, Tencent and ByteDance respectively.
While these efforts take aim at legitimate security concerns, the hawkish measures were surely intended, at least in part, to strengthen President Donald Trump’s chances of winning re-election in November. Given the bipartisan support for national-security pressure on China, the orders may well prove helpful in that regard.
But the three measures’ wider effects are far more consequential, including for Canada. If fully implemented, they could eviscerate the foundations of a free and open internet, strengthen authoritarian governments and hasten the unravelling of the economic interdependencies that powered the most successful half-century in human history. And while it will be virtually impossible to enforce these orders, which are already facing legal challenges, the damage is already being done. Indeed, by signing these orders, the U.S. government has effectively ended its long-standing role as guarantor of a free, interoperable and neutral global internet.
Mr. Trump’s political pyrotechnics – part of a years-long strategic campaign against Beijing that includes tariffs on hundreds of billions of dollars worth of Chinese products, restrictions on Chinese technologies, and sanctions against Hong Kong and Beijing officials – may not even achieve their intended ends. Paradoxically, this latest crackdown threatens to actually hurt U.S. corporations and speed up deglobalization. After all, China makes up roughly 19 per cent of global GDP in a deeply interconnected global economy, so e-commerce companies such as Amazon will need to rethink how to source the hardware and software that power their global cloud infrastructures, while companies that partner with ByteDance and Tencent could experience devaluation and retaliation. Tencent is one of the world’s largest tech firms, with stakes in video-game studios, social-media apps and music companies around the world. U.S. companies, including Visa, Mastercard and Starbucks, also use WeChat’s e-commerce functions in China, and they may be forced to reconsider their footprint there.
The executive orders might also normalize governmental control over the flow of information into and out of their jurisdictions. In recent years, autocratic governments in North Korea, Russia, India and Belarus, among others, have hived off their citizens’ access to the internet, and this “splinternet” will have dangerous implications for digital and human rights.
Further, Chinese President Xi Jinping stands to benefit from U.S. sabre-rattling. Regardless of whether ByteDance and Microsoft make a deal to acquire at least some part of TikTok before next month’s deadline (unless Twitter beats them to it), Mr. Xi will almost certainly feel empowered to take reciprocal actions, including stepping up interference efforts in the coming U.S. elections (as some believe is already occurring). As the second-largest holder of U.S. debt, China could also dump bonds, increasing interest rates for the battered U.S. economy. This might negatively affect China’s trade balance in the short-term, but could also hurt Mr. Trump’s prospects for re-election.
Perhaps most worryingly, Mr. Trump’s orders undermine the role of the United States as the lead defender of digital freedoms, open innovation and the wider digital economy. The contest over the future of the internet will not just be between the U.S. and China; other countries will likely join the chorus to overhaul the internet. China is unlikely to sit idly by and could work with allies to enact similar restrictions on foreign operators. And the potential ascendance of this techno-nationalism will devastate political, social and economic relations just about everywhere.
Canada can help combat this trend by defending an internet that benefits everyone. This is not just a political imperative; it is an economic priority. Today, we rank as one of the most digitally advanced countries in the world, and yet Canada’s IT sector is still dependent on technologies and cloud resources whose origins and operators lie beyond its borders. Mr. Trump’s latest gambit exposes the vulnerability of Canadians to tariffs on data transit across Chinese-owned fibre-optic cables, and to sanctions that could cut off access to critical cloud providers. Such scenarios seem far-fetched, but that was once the view of U.S. sanctions on Canadian exports under national security auspices, too. And Canada’s Nortel, once a global leader in telecommunications, collapsed in part because of Chinese cyberespionage.
The next chapter of the internet will be written in 2020. As the U.S. and China battle over internet supremacy, middle powers risk being roadkill along the information superhighway. For better or worse, the internet has propelled unparalleled advancements in science, education, political expression and economic prosperity – values that Canada has embraced. If the world truly needs more Canada, then standing up for a free and open internet is not just in Canada’s interest, but the world’s.
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