Yesterday I appeared alongside Jim Balsillie, former co-CEO of Research in Motion, at the House of Commons Standing Committee on International Trade public consultation on the TPP. There were some interesting exchanges that I will highlight once the transcript is released. My opening remarks are posted below.
Appearance before the House of Commons Standing Committee on International Trade, May 5, 2016
Good morning. My name is Michael Geist. I am a law professor at the University of Ottawa, where I hold the Canada Research Chair in Internet and E-commerce Law. I appear today in a personal capacity representing only my own views.
There is lots to say about the TPP – I have written dozens of articles and posts on the agreement and I am currently working on a book on point – but I have limited time so I’ll focus briefly on four issues.
First, Canada’s price of admission and weakness during the negotiations.
Canada was not an initial participant in the TPP negotiations. U.S. lobby groups urged the U.S. government to keep Canada out of the negotiations until a copyright bill was passed that satisfied its demands. Those demands had a significant impact on the contents of the 2012 Canadian copyright bill, particularly the retention of restrictive digital lock rules that were at the very top of the U.S. policy priority list.
Once the U.S. was convinced that Canada would meet its IP and anti-counterfeiting demands, it set further conditions for entry, including a commitment that Canada could not hold up any chapter if it was the lone opponent. This concession became important in the IP chapter, where there were several issues were Canada ultimately did stand alone and for which it was forced to cave.
As the negotiations neared a conclusion, senior Canadian officials were advised that Canada was at a disadvantage in the negotiations given the lack of coordination and transparency between government negotiators and interested stakeholders. We went ahead anyway and agreed to the deal.
Second, what did we agree to? The TPP leads to significant changes in Canadian IP law.
For example, the term of copyright in Canada is presently life of the author plus an additional 50 years, a term consistent with the international standard set by the Berne Convention. This is also the standard in half of the TPP countries with Japan, Malaysia, New Zealand, Brunei, and Vietnam also providing protection for life plus 50 years. The TPP will require an extension by 20 more years. That is a major windfall for the U.S. and a net loss for Canada (and most other TPP countries). In fact, New Zealand, which faces a similar requirement, has estimated that the extension alone will cost its economy NZ$55 million per year. Last week, a draft report from the Australian government’s Productivity Commission pointed to estimates of AU$88 million per year for term extension. The Canadian cost may be higher without any real benefit.
The IP changes don’t stop there. The TPP includes changes to digital lock rules, longer patent protections, criminalization of trade secret law, changes to trademark law, new border measures, requirements for ratification by all TPP countries of as many as 9 international IP treaties.
Third, It is Not Just IP
The TPP goes far beyond IP. It touches on culture, restricting the ability to expand CanCon contributions policies. This means that despite Minister Joly’s recent promise to review Canadian cultural policies, contributions to support the creation of Canadian content are effectively locked into place with the TPP blocking new policies aimed at new services and technologies.
The TPP also leaves behind a complex array of regulations for services industries that is almost certain to result in unintended consequences. Hot button issues such as regulation of online gambling or regulating ride sharing services such as Uber may be decided by the TPP, not Canadian governments, whether at the municipal or provincial levels.
On the Internet, it reverses our longstanding hands-off approach on Internet governance and fails to meet our standards on issues like net neutrality.
The TPP even touches on privacy, restricting the ability for governments to implement restrictions on data transfers or data localization, while setting a very low threshold for privacy protection and anti-spam rules. This could place Canada between a proverbial rock and hard place on privacy sitting between European demands and TPP requirements.
Health is directly affected with increases to pharmaceutical pricing, locking in protections for biologics, and even sketching out the rules for a national pharmacare program if Canada were to adopt one.
Fourth, the risks and potential costs of getting implementation wrong are enormous.
The TPP was negotiated behind closed doors and presented to the public on a take-it-or-leave-it basis. I’ve read references from some MPs claiming Canada has already consulted on the deal. I know of few, if any, experts in these areas that were consulted. In fact, when I appeared before this committee in June 2013, I was told by government MPs that concerns about the TPP were premature and that we should wait until the negotiations were complete. Now that they are complete, I hear some saying there has been enough consultation.
Yet we must recognize that the risks of getting implementation wrong are enormous. The investor-state dispute settlement provisions in the TPP point to the possibility of massive liability from corporate claims. Minister Freeland has described the ISDS rules in the Canada-EU Trade Agreement as the “gold standard”, but the TPP rules do not meet that standard. Moreover, even crafting our own standards within the TPP may be a non-starter since the US maintains that it gets to decide for Canada how to ratify the agreement through a certification process.
In sum, Canada was at distinct disadvantage in the TPP negotiations and it shows with major losses on intellectual property, digital and cultural policies, as well as the prospect of significant liability through ISDS and US certification into how we implement . The issue isn’t about being pro or anti-free trade. It is about a bad deal that should be renegotiated or rejected and trade alternatives pursued. I welcome your questions.