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EFF to USTR: IP Doesn't Belong in NAFTA. For the Rest, Talk To Us.

June 9, 2017

The dust has barely settled from the collapse of the Trans-Pacific Partnership (TPP), and already a new trade battle is ahead of us: the renegotiation of the North American Free Trade Agreement (NAFTA). President Trump called the controversial 1994 agreement between the United States, Canada and Mexico "the single worst trade deal ever approved in this country." But compared to the TPP, there's a lot to like about the original NAFTA from a digital rights perspective: it doesn't extend the term of copyright, it doesn't require countries to prohibit DRM circumvention, and it doesn't include new and untested rules to regulate the Internet.

That could all change soon. The United States Trade Representative (USTR) has called for comments from industry and the public on goals it should promote as it renegotiates NAFTA, which opens a window for the TPP’s proponents to try to use NAFTA to establish at least some of the dangerous proposals they hoped to impose through the TPP – including the TPP’s so-called intellectual property (IP) rules. EFF’s comment explains why that is a bad idea:

Prescriptive IP rules usually fail to account for developments in technology such as the Internet, or changes in business and social practices such as the sharing economy. Including such rules in trade agreements could inhibit the United States from modernizing its own intellectual property rules in the future.

We also lay out specific, real-world examples of how including IP rules in trade agreements can backfire. For example, the U.S.-Morocco FTA bans parallel importation of copyright material. Yet in the 2013 Kirtsaeng v Wiley case, such parallel importation was found legal. Similarly, the U.S.-Australia FTA included a provision extending copyright protection to temporary copies of data stored in computer memory. But since then, a line of appellate decisions has found that copyright protection may not exist in temporary copies. As we explain:

Enshrining an opposite rule in NAFTA would have caused not only a disconnect between U.S. law and U.S. trade commitments, (possibly rendering it liable to dispute settlement proceedings), the existence of such a rule might have discouraged the emergence of innovative technologies that routinely make such temporary copies in the course of their normal operations. 

In reality, we probably can't expect copyright rules to be removed from NAFTA altogether. We will face a hard enough task fighting the expansion of such rules. But in the event that such rules are included, they need to be balanced by crucial safeguards such as fair use. If America is to commit itself and its trading partners to upholding high levels of copyright protection, it must also commit them to allowing fair use, to prevent copyright rules from unfairly inhibiting innovation and creativity.

While Canada's existing fair dealing regime is similar to the U.S. fair use doctrine, Mexico lacks any such concept. Given that Mexico also has the world's longest term of copyright protection (at life plus 100 years, even longer than in the United States), the inclusion of fair use as a new minimum standard for NAFTA countries would help to balance out this excessive term of protection.

Beyond IP: Net Neutrality, Encryption and Global Orders

IP rules aren’t the only new rules being proposed for NAFTA. Groups such as the Internet Association have also proposed a raft of new digital trade rules [PDF] to promote the free flow of information online. But because many of these proposals have just as much impact on important non-trade interests and values, such as cybersecurity, freedom of expression, and privacy, we’re not convinced that trade rules are the right place for them.

In particular, our submission explains to the USTR why we think that including TPP-like rules on net neutrality, domain names, encryption standards, or limiting the review of software source code, is a profoundly dangerous proposition. Handing over those important and multi-layered topics to the myopic perspective of the trade negotiators and their corporate advisors will produce rules that miss or devalue the perspectives of computer professionals, users, and innovators.

That said, there are a few, narrow, trade-related digital proposals that we think could fit into the framework of a trade agreement, if it was negotiated in a sufficiently open and transparent fashion. At the top of the list is intermediary liability, since Mexico doesn’t currently provide its Internet platforms with a safe harbor from liability for their users’ content, which creates the incentives for providers to censor and restrict their users’ expression online.

We also think that there may be some merit in using trade agreements to address the problem of data protectionism, such as requirements that Internet platforms host data on local servers—provided that these rules contained adequate safeguards to allow countries to protect users’ personal data. And we are also open to considering the idea of rules to prevent countries from issuing injunctions against Internet platforms from outside their borders, who were not joined as parties to the case where the injunction was issued.

Transparency is key

But before the USTR pursues any of these proposals, it must first reform its trade negotiation practices to make them much more open, inclusive, and transparent. In particular,the USTR should release its text proposals, should release consolidated drafts after each round of negotiations, should hold a notice and comment period and public hearing on its proposals, and should reform and open up its trade advisory committees.

You can read EFF’s full submission below.

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