Dr. Olivia Walch, CEO and Founder of Arcascope, testified before the House Ways and Means Subcommittee on Trade hearing on “Protecting American Innovation by Establishing and Enforcing Strong Digital Trade Rules.”
Walch’s appearance at the hearing was an important step in showcasing the challenges and opportunities faced by small businesses like Arcascope, which leverages digital technologies to provide personalized health solutions globally. Walch successfully conveyed the unique struggles of small businesses navigating complex digital trade rules, offering invaluable insight into the need for consistent and fair regulations.
“Olivia Walch’s story is a testament to how digital platforms can enable small businesses to reach global markets but also how fragmentation in digital trade rules can create unnecessary barriers,” said Hua Wang, Executive Director at Global Innovation Forum.
Summary of Olivia Walch’s Testimony
During her testimony, Walch outlined the importance of strong digital trade rules that foster innovation and facilitate cross-border data flows. She emphasized the challenges her company faces as a small business operating globally, relying on third-party digital infrastructure to reach users in various countries.
Walch explained that restrictive data localization requirements and tariffs on digital goods would hinder small businesses like Arcascope from scaling and serving customers across borders. Highlighting her app’s reliance on cross-border data flows to provide effective jet lag management solutions, she noted that any disruption could significantly harm her company’s ability to operate globally.
- On Data Localization: “We can’t afford to constantly re-engineer our backend or consult our lawyer in response to policy changes requiring us to store data locally or pay country-specific tariffs. Two weeks of our lawyer’s time is half an engineer’s salary.”
- On Digital Tariffs: “Information should not be subject to tariffs in some forms but not others. The WTO eCommerce moratorium ensures that businesses like mine are not hindered by outdated policies that don’t fit the modern digital economy.”
- On Innovation: “Timing your drug wrong could be worse than not even taking it at all. Innovation will happen fastest if barriers to data flows across borders are kept as frictionless as possible.”
- On Source Code Disclosure: “Requirements to share source code as part of operating in a country would mean exposing our ‘secret sauce’ to foreign regulators that likely do not have our interests—or U.S. interests—in mind.”
Walch concluded by urging the U.S. to continue its leadership on digital trade, emphasizing that without proactive measures, the digital landscape may become increasingly challenging for smaller, innovative U.S. startups to compete alongside large companies with greater resources.