Clinton wants Internet tax-free zones

CobraBoy! (
Sat, 28 Jun 1997 09:11:42 -0700

By Reuters
June 27, 1997, 9:45 a.m. PT

SAN FRANCISCO--President Clinton next week will announce a
nine-point plan to spur electronic commerce around the
world by
making the Internet a tax-free zone, administration
officials said

Commerce Secretary William Daley, in a speech prepared for
high-tech executives in San Jose, California, said the
administration saw itself and other government leaders as
"ambassadors of electronic commerce around the world."

"We must work to ensure the approach to electronic
adopted by other nations is consistent with the
principles and
conditions we have cultivated," Daley said.

Daley and the head of a U.S. trade policy delegation,
who spoke
separately to a gathering of industry executives in
San Francisco,
said Clinton would recommend a tariff-free environment
that is
flexible on emerging standards.

Parties should be free to negotiate terms according to
accepted legal principles, intellectual property
rights should be
protected, and privacy must be ensured so people feel
comfortable, Daley added.

Sophisticated encryption, to enable security of data
like credit card
numbers, is necessary, but extremists must be
prevented from
exploiting the ability to encode their data
transmissions, he said.

Uniform rules and rights, along with industry
should be primary considerations, while the
marketplace should
be allowed to determine technical standards, the commerce
secretary noted.

"Technology is moving more rapidly than lawmakers can
respond, and attempts by government to manage the
Internet will
only inhibit technological innovation," he said.

James Johnson, who heads the U.S. delegation to the
Group of
Seven major industrial countries' electronic commerce
group, said the White House would put forward its
policy next

The White House posted a draft copy of its "Framework for
Global Electronic Commerce" on the Web earlier this
year, and
Johnson said the final version would include many
proposals put
forward in the original draft.

Johnson said the administration would reason that it
is difficult to
track what boundaries apply to commerce conducted in
cyberspace and that the history of much of this
century has been
an effort to reduce global tariffs.

The Clinton administration would make this a key
element of its
"agenda for action," he said at a Giga Information Group

On Tuesday, a resolution of the U.S. Conference of Mayors,
meeting in San Francisco, opposed federal legislation
to prevent
state and local governments from slapping new taxes on

Daley said that "regulations that are now routinely
applied to
objectionable content in broadcasts do not, and should
not, apply
to the Internet." Instead, he argued for
self-regulation and
technical solutions like filters and age verification.
The statement
represented an anticipated shift in administration policy.

Washington considered it critical to seek the
involvement of the
computer industry in setting out standards for electronic
commerce, Johnson said.

These include complex issues of security and use of
on which the industry and the U.S. government have been at
odds recently, with computer companies arguing that
World War
II-era laws defining the use of strong cryptography as
munitions were outdated.

The Clinton administration has shown increasing signs of
flexibility on this matter. Netscape Communications and
Microsoft said this week they had been granted
permission to
export products with strong encryption for use by
banks and the
financial industry


still got,

...two turntables and a microphone.

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