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07290271 by SumOfUs (CC BY 2.0) https://flic.kr/p/wE5K8y


Premature Capitulation: How Canada Caved at the TPP Talks in Hawaii

Late last month, Canada joined eleven other countries including the United States, Japan, and Australia in Hawaii for what many experts expected would be the final round of negotiations on the Trans Pacific Partnership. According to media reports, the Canadian government was among those expecting the talks on the proposed trade deal that covers nearly 40 per cent of world GDP to conclude, with officials lining up the corporate community to immediately express their support for the agreement.

However, negotiators left Hawaii empty handed, as disputes over intellectual property laws, safeguards and tariffs for the dairy and sugar industries, as well as disagreement over the auto sector, could not be resolved.  With Canada plunged into an election campaign hours later, the government sought to assure its TPP partners that it could continue to negotiate even while acting in a “caretaker” capacity.

My weekly technology law column (Toronto Star version, homepage version) notes that while those negotiations are expected to resume in the weeks ahead, sources advise that Canada dropped numerous demands on key patent and copyright issues in Hawaii, likely in the mistaken belief that a concluded deal was imminent. Indeed, after withholding agreement on critical issues such as anti-patent trolling rules, website blocking, restrictions on digital locks, trademark classification, and border enforcement, Canadian negotiators caved to U.S. pressure but failed to garner agreement.

For example, a leak of the TPP intellectual property chapter as of May 2015 revealed that Canada supported an Australian proposal to allow countries to cancel patents that are used in an abusive or anti-competitive manner. The provision, which was opposed by the U.S., was designed to give countries the freedom to target patent trolls, which refers to instances when companies that had no involvement in the creation or invention of a patent demand licences or other payments from legitimate companies by relying on dubious patents. The language on patent cancellation due to abusive or anti-competitive conduct was removed in Hawaii.

The parties similarly reached agreement on rules for Internet service providers in the latest draft. Chile, which had opposed special rules to accommodate Canada’s notice-and-notice provision in the TPP, was granted its own carve out that will allow it to maintain the system found in the Chile – U.S. Free Trade Agreement.

For Canada, the deal on ISPs means that government has agreed to induce providers to “remove or disable” access to content upon becoming aware of a decision of a court of a copyright infringement. The broadly worded provision could force Canadian ISPs to block content on websites after being notified of a foreign court order – without first having to assess whether the site is even legal under Canadian law.

Canadian negotiators caved on a wide range of other issues. While still holding out against establishing new criminal liability for the removal of “rights management information” (rules associated with Canada’s controversial protection of digital locks), Canada agreed to expanded restrictions on the importation or distribution of goods whose rights management information has been altered.

Canada also dropped opposition to new copyright rules on sound recordings and trademark rules involving the use of an international classification system. It agreed to heighten border enforcement measures involving in-transit shipments of goods that merely pass through Canada without remaining in the country and to use best efforts to expand trademark protections to “scents”.

There are still some unresolved issues in the Hawaii draft, particularly those involving the term of copyright (which the U.S. wants Canada, Japan, New Zealand, and Malaysia to extend by an additional 20 years) and many pharmaceutical patent issues. Yet Canadian negotiators appear to have badly blundered by prematurely making important concessions but failing to close the deal. As a result, it seems likely that Canada will be forced to concede on other key issues when countries next meet to finalize the TPP.

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  1. It should be called “Trade Protection Partnership” It seems to me more protection then trade !!

  2. Hi, Michael:

    There an old convention in trade law negotiations that still applies, which is that “nothing is agreed until everything is agreed”. I’ve just confirmed with the redoubtable Jamie Love of http://www.keionline.org that this is still the case. Jamie has been involved with the #TPP negotiations all along and has been to nearly all the meetings. He was also in many ways the driving force behind the Marrakesh Treaty for the blind. So, if Canada decides to get back to hanging tough, there’s no reason why we can’t revisit previous positions, including concessions and capitulations. According to Jamie, the Americans and others have done this including during the last round in Maui, and whenever they reach the conclusion they made a mistake, or have to accommodate an influential interest group. As I understand him, not all of the issues the US raises later in the negotiations are necessarily bad, or good, but they reopen topics whenever they want.

    What Canada needs now is some sort of public discussion about the really big issues at stake, which include investor state dispute resolution (#ISDS) – i.e. whether a foreign corporation can concoct a dispute, invoke a secretive arbitration process with three private arbitrators (likely lawyers and/or professors), and overrule Canadian laws as passed by Parliament and interpreted the Supreme Court of Canada. That’s a serious threat to the rule of law and to Canadian sovereignty itself. With all due respect to Kim Campbell, this is precisely the type of issue that not only merits but requires discussion during an election, particularly when the issue is very much a live and urgent one that could be decided during the election period.



    • Thanks, Howard. That was useful. Still hoping to hear Michael’s contribution.

    • Howard:
      The most secretive, back-door-dealing, US-boot-liking government we have ever seen in public discussion? Please! Get real!

      Sorry. It’s a done deal.

      What was the phrase? Oh, yeah: “If you’re not with us, you’re against us”. Let’s hope the election brings change.

  3. Michael, do you feel there is any hope that Canada may not have to ratify (taking into account whatever government is formed after Oct. 19 will be responsible for the decision and may be different from the one who led the negotiation [as I understand it])? This seems to be our only hope in not being burdened with the last ditch compromises you described.

  4. Secret meetings that are self serving sums up the TPP from America. Website blocking should not be on the table. Why is website blocking part of the deal ? Is it because America wants to block websites like wikileaks… agree to the TPP and they can then impliment the blocking system legally, from how they do it now.

    Send them packing…