My Senate Committee appearance on the TPP

April 21st, 2016 by Barry Sookman Leave a reply »

Earlier today I appeared before the Senate Committee on Foreign Affairs and International Trade – Multilateral, Regional and Bilateral Trade Agreements. The Committee’s focus was on CETA and the TPP.

My initial remarks to the Committee are set out below.

I would like to thank the committee for inviting me to appear today to provide input on the Trans-Pacific Partnership.

I am here today in my personal capacity and not representing any clients.

The TPP has been heralded as a 21st century trade agreement. The e-commerce and IP chapters reflect this in my view.

The e-ecommerce chapter is truly innovative in that it tackles barriers to the use of the Internet and other networks to conduct trade. This gives Canadian businesses the opportunity to do business in the other 11 TPP countries from Canada, giving Canadians a chance to develop and maintain high paying jobs in this country. Under the chapter:

  • No Party can impose customs duties on electronic transmissions. Although taxes may be imposed, elimination of customs duties reduces payments that could have been levied on digital goods.
  • Parties must remove impediments to recognition of electronic documents and signatures by requiring treaty countries to be compliant with either the UNCITRAL Model Law on Electronic Commerce or the UN Convention on the Use of Electronic Communications in International Contracts. This will bring other parties to standards already adopted in Canada. It will also facilitate the use of sophisticated authentication technologies.
  • Parties cannot block market access by preventing Canadian businesses from transferring personal information to Canada for processing or require Canadian businesses to establish data centers in the other countries in order to conduct business there. These provisions have been criticized as going too far. However, there are exceptions to achieve a legitimate public policy objective if they are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on trade; and do not impose restrictions on transfers of information or the use or location of computing facilities greater than are required. Also, the treaty permits exceptions to protect Canada’s security interests.
  • Parties must maintain minimum standards for protection of personal information, to prevent spam, and to promote consumer protection. Canada meets and exceeds these standards. Some have criticized the treaty for not going farther. But, it is unrealistic to have expected a trade treaty – and not a privacy, anti-spam or consumer protection treaty – to do this.
  • Parties cannot require access to source codes to mass marketed software (or products containing mass market software) as a condition for the import, distribution, sale or use of such software, or of products containing such software, in its territory.
  • Digital products must be given non-discriminatory treatment. This would include streaming services. However, there are exceptions that enable Canada to regulate broadcast services and a cultural exemption that applies to cross-border services.

The TPP also prescribes minimum standards for intellectual property protection. Canada played an active role in the negotiation of these provisions. The result is that, with a few exceptions, Canadian law already is compliant with these requirements.

The IP chapter has been subject to criticism in Canada by a few vocal individuals. In my view, quite a lot of what has been said about the IP chapter is not accurate and potential problems have been exaggerated. I am submitting to the Committee several blog posts I have published that deal with these criticisms and I would be delighted to answer any questions you may have about them.

In assessing the IP chapter, and in particular, the appropriateness of its minimum standards the Committee should, in my view, take into account the following:

  • There are minimal changes required by the treaty to Canadian law.
  • The impacts of changes that have been publically identified are not significant, especially in relation to the overall context of the treaty. There are also good public policy reasons for those changes. This includes the amendment requiring an extension to the term of copyright, the addition of criminal sanctions for those who would engage in facilitating piracy by removing rights management information from digital products, and requiring a criminal sanction that targets computer hacking to steal trade secrets that is detrimental to Canada’s economic interests, international relations, or Canada’s defense or national security.
  • The TPP will give Canadian businesses access to a trading block with 40% of the world’s GDP and most favored access to markets of our top 3 other trading partners, the U.S. Japan, and Mexico. It will enable Canada to be part of global supply chains that operate in this market space.
  • Intellectual property laws promote innovation and commercialization of IP based products. The 21st century and the 4th industrial revolution we are in the midst of increasingly relies on IP to raise capital and to foster innovation and commercialization.
  • The Canadian market, by itself, is too small to support the level of investment needed for high technology and IP based companies to succeed. Canadian businesses need to be able to compete internationally and will need to leverage the high levels of IP protection according by Canada’s trading partners whether Canada joints the TPP or not.
  • It is hard to see how Canadian businesses would be disadvantaged by agreeing to keep the standards of protection of IP protection we have already. The standards in the TPP are consistent with international norms and support IP intensive industries while providing reasonable flexibility in accordance with international norms.
Print Friendly, PDF & Email
Advertisement
%d bloggers like this: