This week’s lengthy Trouble with the TPP post focused on the likelihood that efforts to require online video providers to pay mandatory Cancon contributions would be challenged under the TPP. While I am not a supporter of extending contributions to companies like Netflix, including such a restriction within a trade agreement is bad policy. Today’s post continues with the culture theme, by examining the risk that other new policy innovations might also be stymied by the TPP.
The Globe and Mail’s Kate Taylor recently wrote a column arguing that Canadian cultural production is in crisis and calling for reforms to address the issue. For example, Taylor cited the possibility of tax credits for advertising on websites that meet a Canadian content threshold similar to the policy for television and radio broadcasters. ACTRA has long called for a similar policy, noting the benefits of tax deductions for advertising on Canadian-owned websites that give prominence to Canadian content.
But would such a policy pass muster on the TPP? It’s not totally clear that it would.
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Yesterday’s Trouble with the TPP post examined some of the uncertainty created by the surprising e-commerce provision that involves restrictions on source code disclosures. KEI notes that governments have not been shy about requiring source code disclosures in other contexts, such as competition worries. Yet this rule will establish new restrictions, creating concerns about the implications in areas such as privacy. For example, security and Internet experts have been sounding the alarm on the risks associated with exploited wifi routers and pointing to source code disclosures as potential solution.
Dave Farber, former Chief Technologist of the Federal Communications Commission, warns:
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Another Trouble with the TPP is its foray into the software industry. One of the more surprising provisions in the TPP’s e-commerce chapter was the inclusion of a restriction on mandated source code disclosure. Article 14.17 states:
No Party shall require the transfer of, or access to, source code of software owned by a person of another Party, as a condition for the import, distribution, sale or use of such software, or of products containing such software, in its territory.
The provision is subject to some limitations. For example, it is “limited to mass-market software or products containing such software and does not include software used for critical infrastructure.” The source code disclosure rule is not found in any other current Canadian trade agreement, though leaked documents indicate that it does appear in a draft of the Trade in Services Agreement (TISA).
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The intersection between the TPP and Canadian cultural policies is likely to emerge as one of the more controversial aspects of the TPP, particularly given the government’s emphasis on a stronger cultural policy in its election platform. Earlier in the Trouble with the TPP series, I wrote that the TPP fails to protect Canadian cultural policy. I pointed to U.S. lobby pressure to limit Canadian protection of cultural policies as well as provisions that restrict Canada’s ability to consider expanding Cancon contributions to entities currently exempt from payment. I have not been a supporter of mandating Cancon contributions to online video provides such as Netflix, but restricting Canada’s right to do so in a trade agreement is shortsighted, bad policy.
Peter Grant has written a careful response to my post on Barry Sookman’s blog. He argues that Canada can still “maintain or enhance our cultural policies.” He opens by stating that “I am not entirely wrong” about the TPP being a departure from Canada’s traditional approach to culture in trade agreements. However, he argues that the TPP approach is not unique since the Canada – EU Trade Agreement adopts a similar approach. Yet CETA contains numerous cultural exceptions within the chapters for Cross-Border Trade in Services, Domestic Regulation, Government Procurement, Investment, and Subsidies. In the TPP, there are only seven provisions in the entire agreement that are subject to the cultural exception and many of the issues addressed by CETA are not covered. Further, the TPP has exceptions to the cultural exception not found in CETA and (as Grant notes) Canada did not get an explicit exception to allow for measures to allow domestic audio-visual content to be reasonably available as did Australia.
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This week’s signing of the TPP in New Zealand provides a useful reminder that a potential ratification means committing to far more than just one (very large) trade agreement. One of the Troubles with the TPP is that the intellectual property chapter requires all countries to ratify or accede to as many as nine international IP treaties. In other words, the treaties within the treaty are a core part of the obligations that come with TPP.
Article 18.7 specifies that all countries have already ratified or acceded to three IP treaties: the Patent Cooperation Treaty, Paris Convention, and Berne Convention. More notably, there are as many as six additional treaties that must be ratified or acceded in order to ratify the TPP:
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