NAFTA and Copyright: What Happens Next?

As I sit writing this blog on Labour Day (or Labor Day if you are south of the border), I am conscious of the fact that by the time it gets published, things may well have changed. NAFTA negotiations between Canadian and US negotiators are set to resume on Wednesday morning, September 5, after a well-deserved break for the long weekend. The lead up to this weekend was beyond hectic, with the US and Mexico announcing at the beginning of the week that after five weeks of bilateral negotiations they had reached agreement. Canada was then invited to rejoin the negotiations and, with a gun at its head, was given exactly three days to sign on to the US-Mexico agreement. The fact that Canada had been shut out for the past month or more from direct participation in the discussions, and that some of the issues of concern to Canada are of no interest to the Mexicans (so of course they were not obstacles to an agreement as far as Mexico was concerned) made things even more difficult. And then to add insult to injury, the Toronto Star reported confidential comments that President Trump made to Bloomberg News that he was not prepared to make any compromises whatsoever to reach a deal with Canada and that any agreement had to be “totally on our terms”.

It was thus no surprise that for reasons of both time and optics Canada refused to buckle and come to terms by the President’s self-imposed deadline of Friday, August 31. Nonetheless Trump proceeded with a letter notifying Congress of his intent to sign a trade agreement with Mexico and Canada, (if it is willing) in 90 days, as required by the Trade Promotion Authority granted the Administration by Congress. Since the full text does not have to be presented until 60 days before signing, there is still sufficient time for Canada and the US to reach a deal, although if one partner considers that negotiating means stonewalling and insisting on all-take-and-no-give, reaching agreement will be difficult. Since Congress gave the President authority to renegotiate a tripartite deal, meaning Canada has to be included, the fact that notification has been issued now gives Canada some additional leverage in the eyes of some analysts. Where it will all come out remains to be seen.

Among the many issues to be finalized is that of copyright, hardly a deal breaker like threatened “national security” tariffs against Canadian auto exports to the US, or access to the highly-protected Canadian dairy market or retention of a NAFTA-specific dispute settlement mechanism. Nonetheless if NAFTA renegotiations are concluded, there will be impact on the copyright industries and the terms of copyright protection. Recall that in the Trans-Pacific Partnership (TPP) negotiations, from which the US withdrew after Trump took office, there were a number of intellectual property provisions, including in the area of copyright, where commitments were made by the negotiating parties. Some of these clauses were suspended after the US withdrew and the remaining eleven countries reached final agreement. They now form part of the US demands in NAFTA. By taking certain IP commitments off the table in the TPP, Canada at least has left itself the option of trading them off against other issues in the end game of NAFTA negotiations with the US.

So far the only information regarding what has been tentatively agreed in the area of IPR is a broad-brush “fact sheet” issued by USTR after the negotiations with Mexico concluded. According to USTR;

For the first time, a trade agreement will require all of the following:

• Enforcement authorities must be able to stop goods that are suspected of being pirated or counterfeited at all areas of entry and exit.
• Enforcement against counterfeits and piracy occurring on a commercial scale.
• Meaningful criminal procedures and penalties for camcording of movies.
• Civil and criminal penalties for satellite and cable signal theft.
• Broad protection against trade secret theft, including against state-owned enterprises.

Canada won’t have much difficulty with these provisions, since they are all consistent with current Canadian law (with the possible exception of stopping pirated or counterfeited goods where Canada inexplicably and stubbornly refuses to apply the law to stop such goods in transit), but others are a little less clear.

Among these is the issue of copyright term extension, where the wording in the USTR document says the IP chapter will;

“Extend the minimum copyright term to 75 years for works like song performances and ensure that works such as digital music, movies, and books can be protected through current technologies such as technological protection measures and rights management information.”

In the US, the anti-copyright group Public Knowledge immediately jumped on this statement to denounce the “outrageous copyright giveaway”, claiming that this was a “staggeringly brazen attempt by the (US) entertainment industries to launder unpopular policies through international agreements” by requiring “a minimum copyright term amounting to the life of the author plus 75 years. If enacted, this would effectively extend the copyright terms in existing U.S. law”. While the extension of copyright term in other countries (like Canada) might well be a US negotiating position, albeit one which would benefit not only US rights-holders but rights-holders in Canada as well, in fact the USTR statement fell far short of the breathless Public Knowledge claims. As blogger David Newhoff pointed out, the USTR statement

“does not say anything about “life of the author,” (and) can best be interpreted to imply a flat term of 75 years for sound recordings, and would, therefore, not be an extension of anything in U.S. law. In fact, 75 years would comport to Mexico’s term for sound recordings (and other works), which is 20 years shorter than the U.S. term for works without authors (e.g. works made for hire).”

It is worth noting that Mexico already has a copyright term of life of the author plus 100 years, a stronger copyright term than in the US. Canada’s term is “life plus 50”, a position that is increasingly out of step with current international practice. In fact, Canada, Japan and New Zealand are the sole members of the 36-country OECD to stick to the shorter Berne Convention minimum copyright term of life plus 50. I would not be surprised to see Canada join the consensus as part of the final phase of the NAFTA negotiations, as it already agreed to an extension of its copyright term in the TPP (although this was one of the provisions that was suspended after the US exit from the Agreement).

Another provision of the US-Mexico agreement establishes a notice-and-takedown system for copyright safe harbors for Internet service providers (ISPs), similar to the one agreed to in the TPP (also one of the suspended provisions which therefore will not come into force when the Comprehensive and Progressive TPP takes effect). In the original TPP, Canada’s “notice and notice” system was grandfathered in lieu of notice and takedown. This will have to be resolved if notice and takedown is to remain in NAFTA.

In the digital trade chapter, the USTR summary states that the US and Mexico agreed to:

Limit the civil liability of Internet platforms for third-party content that such platforms host or process, outside of the realm intellectual property enforcement, thereby enhancing the economic viability of these engines of growth that depend on user interaction and user content.

This is problematic, as Barry Sookman has argued in Inside Policy, because this provision could be used to grant internet platforms extensive, overly-broad immunity from liability for content carried or published on their platforms along the lines provided by Section 230 of the US Communications Decency Act of 1996 (CDA). This piece of legislation has been abused in the US and was recently amended through enactment of SESTA (Stop Enabling Sex Trafficking Act) as the safe harbour provisions were being exploited by porn websites such as Backpage to promote activities related to online sex trafficking. Despite the proven connection to illegal activity, Google lobbied hard to defeat SESTA, arguing that broad platform immunities are required in order for the Internet to work efficiently. As Sookman points out, there is no need for the proposed Internet immunity in a new NAFTA since Canadian law already effectively deals with this issue. However if it is included, care must be exercised so that the kinds of immunities referred to in the USTR fact sheet do not result in importing Section 230 into NAFTA and Canadian law.

In the US opponents of platform accountability, such as the EFF, have argued that baking Section 230 into NAFTA is the best opportunity to “protect it” (i.e. to hinder Congress from modifying this overly-broad law, as it did with SESTA). By the same token, there are many in the US who are leery of Section 230 language being incorporated into a trade agreement for the same reason, namely that it will make it difficult to reform the legislation and bring about an increase in platform accountability and responsibility.

Assuming that Canada and the US can bridge their remaining differences (there is much speculation that Canada will offer concessions on dairy without fully dismantling its supply management system), then the broad copyright provisions outlined in the USTR fact sheet will have to be translated into legal commitments. While not the main event, copyright issues are more than just a side-show and the final text will be eagerly scrutinized by copyright practitioners in all three countries.

Despite the fact that Mexico appears to have thrown Canada under Mr. Trump’s bus, and that negotiating via Twitter is a real challenge, the odds are pretty good that a formula can be found that will satisfy the President’s ego while giving the Trudeau government sufficient face to sell the agreement to Canadians. If that happens in this coming week, or shortly after, for those in the copyright world the bare-bones USTR fact sheet will become a blueprint well worth studying.

© Hugh Stephens, 2018. All Rights Reserved