i3 - January/February 2018 - 24

Policy

By Sage Chandler

P O L I CY N E WS

Why a New NAFTA Needs
Strong Digital Protections

early 25 years ago, the U.S., along with its northern and
southern neighbors, entered into a trade agreement
that was a first of its kind. The North American Free
Trade Agreement (NAFTA), legally bound the U.S., Canada and
Mexico to agreed-upon rules of economic engagement - for
example, tariff-free trade in goods, recognition of each other's
professional certifications in certain employment categories,
criteria on input percentages for duty free trade, and establishment of proceeding for disagreement between the parties.
Even at the time, the potential benefits
Reducing Barriers to Digital Trade
that NAFTA could offer were hotly
The original NAFTA makes no mention of
debated. As Ross Perot predicted, "a giant
digital trade, which given that the U.S.
sucking sound" would be heard as jobs dis- exports $400 billion in technology services,
appeared from the U.S. favoring cheap
seems like an oversight. Except it wasn't:
Mexican costs, and labor, and environmen- The first digital purchase wasn't made until
tal standards crumbled. In hindsight, we
1994, after NAFTA went into effect.
saw that between 1994 and 2000, the
Creating a supportive environment
American economy added two million jobs. for trade involves prohibiting customs
While labor shifts did occur, NAFTA
duties on digital content and preventing
set rules of engagement that gave compa- forced data localization. This allows
nies predictability, and enabled massive
information to flow freely between borgrowth in the three economies in the 24
ders and lets Canadian and U.S. busiyears that followed. Higher paying, innonesses seize the opportunities from
vative jobs across the U.S.
cloud computing, which
take advantage of the tarrelies on distributed comA balanced
iff-free trade between the
puting resources.
approach
three countries and thouIt also means establishto digital
sands of jobs moved in to
ing predictable liability
protections
North America from parprotections, so that online
supports
ties outside our trade zone.
platforms can facilitate
job creation and communications without
But for all the benefits
since 1993, NAFTA 1.0 prebeing made to censor or
innovation.
cipitated a major cornerbe an artificial gatekeeper.
stone for communication,
We saw this play out in
co-operation and prosperity - the internet, domestic U.S. politics with the 2012
which supported international creativity,
SOPA/PIPA protests, when millions of
collaboration, innovation and commerce.
people stood against anti-piracy laws that
Efforts to renegotiate and modernize
had the potential to shut down many
NAFTA are underway, and in this effort is
popular websites.
great opportunity for the commitment and
Renegotiating NAFTA presents an
advancement of digital technology and the opportunity to craft effective liability and
internet - the critical underpinning of the Safe Harbor measures on an international
21st-century economy. In an updated
level to hold users accountable and allow
NAFTA, there are several key considercompanies that host digital content to
ations negotiators should pursue.
invest in new jobs instead of legal fees.
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JANUARY/FEBRUARY 2018

We should also resist the trend, emerging
in Europe, of requiring internet companies
to take worldwide actions that harm consumers and innovation based on requirements of a single country or jurisdiction.

Protecting Rights

Fair use, the first-sale doctrine and other
copyright limitations and exceptions provide a framework that give innovators the
freedom to create new ideas and technologies, while also protecting their rights to
their own creative content.
The U.S., Canada and Mexico operate
under differing copyright frameworks.
For example, unlike the "fair dealing" doctrine in Canada and "fair use" in the U.S.,
Mexico lacks any such doctrine to protect
creative, personal, transformative or otherwise benign uses of protected content. The
country also has unusually lengthy copyright-term provisions, keeping important
cultural contributions of its citizens out of
the public domain.
Moreover, Mexico lacks a "Safe Harbor"
provision that protects internet companies
willing to take action when properly notified of infringing content, and also lacks
corresponding protections from non-IP liability. Similarly, a recent Canadian court
decision requiring a U.S. company that was
not charged with any copyright violation to
delist specific search results on a worldwide
basis is Troubling. (It's being challenged in
a U.S. court.) As evidenced by the differing
rules on copyright between Canada and
Mexico, technical barriers to trade can have
a significant impact on new technologies.
If pursued, these policy initiatives will
shape the economy of the future, unlocking
new opportunities for innovation and creativity. If we don't address topics in a trade
negotiation between three of the world's
largest economies, we send a signal to the
rest of world that we don't care.
U.S. innovation, job creation and economic growth depend upon a strong and
balanced approach to copyright. Although
the Trump Administration decided to withdraw from the Trans-Pacific Partnership
(TPP,) the copyright provisions negotiated
with Canada, Mexico and other countries
continued on page 26
I T I S I N N O VAT I O N

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