Inside the Black Box: Political Economy of the TPP's Encryption Clause

Abstract

Among other provisions of the Trans-Pacific Partnership (TPP) Agreement, a new clause on encryption technology (‘Encryption Clause’) is particularly noteworthy. By tracing the history of decades-long encryption control, this Article underscores how such clause implicates international order. Modern encryption technology was conceived and developed during World Wars. Painted by such a war-time legacy, encryption has been treated as a ‘dual-use’ technology and has been subject to export control since the end of World War II via the COCOM and, later, the Wassenaar Arrangement. With the collapse of the Soviet Union, the Western bloc became divided on encryption policies. The U.S. was most concerned with national security and once attempted to introduce the mandatory ‘key escrow’ scheme to provide a level playing field for its high-tech industry. Resistance to the U.S.’s hardline approach towards encryption at home and abroad led the nation to relax its export controls, thereby ending Crypto War 1.0. With the rise of emerging economies, however, Crypto War 2.0 is now resurfacing, and through the Encryption Clause, the U.S. seeks to remove trade barriers that are hostile toward products which employ foreign cryptography. Yet, underlying IPR issues and the role of intelligence units in the formation of technical standards may once again move trade negotiations into the shadows.