The North America Free Trade Agreement renegotiation is likely to start within the next few months as the U.S. triggers provisions that will re-open Canada’s most important trade deal.  With U.S. Secretary of Commerce Wilbur Ross emphasizing the need to address digital economy issues, I wrote about a digital economy-era NAFTA in last week’s Globe and Mail, noting that there were some issues (including online contract enforcement and consumer protection) that should relatively uncontroversial.

In light of yesterday’s U.S. Congressional decision to overturn online privacy rules, it is worth revisiting the NAFTA renegotiation issue and consider whether Canada will need to safeguard its Internet policy. I noted last week that the U.S. was already likely to target two Internet-related privacy measures: data localization and data transfers. Data localization, which could mandate retention of personal information on computer servers located in Canada. has become an increasingly popular policy measure worldwide as countries respond to concerns about U.S.-based surveillance and the subordination of privacy protections for non-U.S. citizens and residents. The Trans Pacific Partnership included restrictions on data localization requirements at the insistence of U.S. negotiators and those provisions are likely to resurface during the NAFTA talks.  Similarly, limitations on data transfer restrictions could surface, restricting the ability to establish privacy safeguards and placing Canada in a difficult position with the EU requiring restrictions and NAFTA prohibiting them.

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