The Revised TPP, NAFTA Renegotiations–and the Risk of Blindly Expanding Internet Safe Harbours


The surprising and welcome news from Tokyo that Canada and the ten other members of the Trans-Pacific Partnership (TPP) had agreed to conclude what is now called the “Comprehensive and Progressive TPP”, coming as it did on the opening day of the latest round of NAFTA negotiations in Montreal, was interesting in its timing. This may have been coincidental since TPP negotiators were meeting in Japan in an attempt to resolve outstanding differences in order to fast-track the conclusion of their Agreement, which is now to be officially sealed on March 8 in Chile, while resumed NAFTA negotiations were simultaneously getting underway half a world away. Coincidental or not, the conclusion of the TPP sends a signal to the US that both Canada and Mexico are committed to trade liberalisation at a time when the Trump Administration is beating the protectionist drum. The TPP is not an alternative to NAFTA, but is a move toward greater trade diversification on the part of two of the largest trading partners of the US.

TPP and NAFTA “Overlay”

The intersection or overlay of the commitments that Canada and Mexico have agreed to in the new Comprehensive and Progressive TPP agreement, with those sought by the US in the NAFTA renegotiations, is complicated. For example, in the auto sector the US is seeking to raise the NAFTA components in a vehicle from 62.5% (by value) to 85%, with fully 50% of the components sourced from the United States. The TPP on the other hand requires only 35 to 45% of TPP content under the rules of origin for a vehicle to qualify for duty-free treatment. So, at a time when the US is seeking to raise the NAFTA content level in a vehicle, thus excluding parts sourced from outside North America, the TPP countries seem to be going in the opposite direction. Autos don’t have much to do with copyright, but there is a similar intersection or overlay issue between TPP commitments and NAFTA objectives with respect to copyright and some of the other IP provisions. In part to deal with this problem, the TPP countries have “suspended” a number of the commitments in the IP chapter that were made while the US was still a member of the bloc.

As I outlined in an earlier blog, the suspended provisions covered, in addition to commitments to extend the term of copyright protection by twenty years (where countries had not already done so), criminalization of the circumvention of technological protection measures and rights management information (if done wilfully and for the purposes of commercial gain), civil and criminal penalties for pirating encrypted cable and satellite signals, and establishment of legal remedies and safe harbours to provide immunity to ISPs against copyright infringement as long as they take down infringing materials expeditiously. (The definition of ISPs in the Agreement is broad, including internet intermediaries such as search engines and content-hosting websites). These suspended provisions were commitments that had been sought by US negotiators when the US was part of the original TPP agreement, prior to the abrupt withdrawal announced by Donald Trump upon taking office.

At this stage we don’t know whether any of the TPP’s suspended IP provisions will find their way back into a renegotiated NAFTA. In fact we don’t know whether NAFTA will even survive given the range of US demands, from new auto content rules to a sunset clause to dismantling the dispute settlement process. The one-sided nature of these demands was aptly described by US Commerce Secretary Wilbur Ross who is reported to have said;

“We’re asking two countries to give up some privileges that they have enjoyed for 22 years. And we’re not in a position to offer anything in return. So that’s a tough sell.”

No kidding. All demands and no concessions is a tough way to achieve a win/win negotiated outcome.

Term Extension and TPMs

Assuming there is actually willingness to try to mend rather than end NAFTA, copyright term extension and criminalizing the circumvention of TPMs (technological protection measures) for commercial purposes will certainly be key demands presented by the US side in the NAFTA negotiations. The NAFTA negotiating strategy published by USTR says as much, albeit indirectly. These would be characterized as “concessions” by Canada (Mexico already has a copyright term longer than the US) but would be easy changes to make given the benefits they would bring to Canadian copyright industries and rights-holders. However, for copyright opponents in Canada, such as commentator and law professor Michael Geist, we can expect that any acceptance of such measures would be criticized as “caving” to US pressure.

Safe Harbours

While it is unclear whether these suspended provisions, as well as the TPP’s “legal remedies and safe harbours” language which dealt with the relatively narrow issue of copyright safe harbours, will reappear in NAFTA, a campaign has begun in the US to introduce into the NAFTA Agreement a wider safe harbour exemption, not directly linked to copyright infringement. If accepted, this would relieve internet intermediaries of responsibility for virtually any content they publish or disseminate. A group purporting to represent Internet interests, mostly from the US but including a few Canadians (Professor Geist for one), has written to the lead ministers responsible for the NAFTA negotiations. In their letter, the signatories argue for the inclusion in NAFTA of broad internet intermediary safe harbors along the lines of Section 230 of the US Communications Decency Act (CDA), 1996.

Section 230 of the CDA

This legislation effectively gives ISPs and other internet intermediaries virtual blanket immunity from liability for anything published on their networks or sites, (although there is an exception in the legislation for intellectual property infringements). Section 230 is particularly controversial at the present time because it has been used to provide immunity to websites such as that have been accused of promoting sex trafficking on their sites. To deal with such abuses, draft legislation in the US (SESTA-or the “Stop Enabling Sex Traffickers Act”) has been proposed to impose limits on Section 230 immunity. The EFF has vigorously opposed SESTA. Consistent with this position, the EFF (and the other individuals and organisations who signed the NAFTA letter) argue that a Section 230-type blanket immunity for internet platforms is required in Canada and Mexico in order to promote internet growth.

There has been strong pushback against the EFF initiative from the content industry in the US, and from others, such as IP blogger Neil Turkewitz. Variety has reported that thirty-seven content groups, including the Motion Picture Association of America, the Recording Industry Association of America, CreativeFuture, the Directors Guild of America, SAG-AFTRA, and the Independent Film & Television Alliance, among others, have sent a letter to US Trade Representative Lighthizer opposing expansion of safe harbours. The letter says the Section 230 immunity provision has been used (or misused) by internet companies to evade accountability for illegal and infringing content published on their platforms and to build business models based on the theft of American creation and innovation. Content groups are not the only ones to oppose extending Section 230-type immunities to Canada. Peter MacKay, Canada’s Attorney General in the Harper government has gone on record as opposing any immunity for sex traffickers as a result of Section 230 changes brought in through NAFTA negotiations.

Section 230 and NAFTA

In a particularly revealing and two-faced article, the EFF has argued that pushing a Section 230 demand through NAFTA, which if accepted would result in a change to both Canadian and Mexican law, would “roll back the precedent set in the Google v Equustek case”. (This Supreme Court of Canada ruling upheld a lower court order requiring Google to de-index search results on a global basis for a company found to have infringed Equustek’s intellectual property rights).

The EFF article continues;

“Exporting Section 230 to Mexico and Canada isn’t the only reason to advocate for its inclusion in a modernized NAFTA. This negotiation comes at a time when Section 230 stands under threat in the United States, currently from the SESTA and FOSTA (Fight Online Sex Trafficking Act) proposals, which could escalate into demands that platforms also assume greater responsibility for other types of content. As uncomfortable as we are with the lack of openness of trade negotiations, baking Section 230 into NAFTA may be the best opportunity we have to protect it domestically.”

Heaven forbid that platforms should have to assume responsibility for the content they publish and willingly monetize!

Professor Geist was very quick to condemn Canadian negotiators for “caving” to US demands during the TPP negotiations. Yet apparently he has no qualms about signing on to a letter designed to promote an egregious proposal that, if negotiated through NAFTA, would impose US-style legislation on Canada that would undermine the accountability and responsibility of Canadian internet platforms and search engines for the content they host and publish. There is growing awareness in Canada of the need for measures to deal with websites established largely or exclusively to promote access to pirated content. To give such websites blanket immunity in the name of internet progress is antithetical to Canadian public interests, whether they be law enforcement, protection of content or other concerns.

With the revised TPP now a done deal, and NAFTA renewal still up in the air, the impact of one on the other remains to be seen, including in the area of intellectual property. One area to watch closely however is the safe harbour provision where, under the rubric of “NAFTA modernization”, Silicon Valley libertarians and anti-copyright activists are trying to use the trade negotiations to ensure that large and powerful internet intermediaries are absolved of any responsibility for content appearing on their sites. The TPP won’t contain such a provision because Mr. Trump shot the US in the foot with his ill-considered withdrawal, but watch the NAFTA file carefully. To borrow a phrase, Canada does not want to “cave” on this one.

© Hugh Stephens, 2018. All Rights Reserved.


Author: hughstephensblog

I am a former Canadian foreign service officer and a retired executive with Time Warner. In both capacities I worked for many years in Asia. I have been writing this copyright blog since 2016, and recently published a book "In Defence of Copyright" to raise awareness of the importance of good copyright protection in Canada and globally. It is written from and for the layman's perspective (not a legal text or scholarly work), illustrated with some of the unusual copyright stories drawn from the blog. Available on Amazon and local book stores.

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