A Tale of Two Treaties

Big(ish) copyright news out of Canada and Mexico that serves as a timely reminder of the central role of trade negotiations in promoting harmonized intellectual property laws. Canadian and European trade negotiators are apparently closing in on a comprehensive economic and trade agreement, which will include intellectual-property provisions. Michael Geist reports that negotiators remained stymied on the agreement’s IP chapter, including copyright-enforcement provisions that the Europeans would like to model on the Anti-Counterfeiting Trade Agreement (ACTA). Any changes will require legislative amendments.

The lack of progress on IP is not surprising. For an IP importer like Canada, increased protection and enforcement costs represent a pretty unambiguous drain on the Canadian economy and will likely result in higher prices, as the European Union itself concluded in a study on the potential effects of a Canada-EU trade agreement:

The Canadian trade balance would not necessarily benefit from IP provisions in CETA. Trade in specific goods, that are currently freely marketed and exported from Canada, could be adversely affected. For example, several Canadian companies brand and export their products with labels that could be considered as European geographical indications. These companies could lose market shares in domestic and foreign markets if they are forced to abandon their commercially significant labels. Conversely, it is unlikely that Canadian companies would significantly benefit from an increased protection of geographical indications in the European market. In sum, both Canadian exports and imports might be slightly and negatively impacted, but only in specific sectors.

The flip side of this is that Canadian negotiators may simply decide to trade off a bad deal on IP in exchange for perceived trade gains elsewhere. Given the way copyright has become politicized since the first time the Conservatives tried introducing a copyright-reform bill, this is a somewhat risky proposition. Then again, having a majority government makes passing such an agreement much, much, much easier than it would’ve been under a minority government.

The news from Canada makes what’s happening in Mexico even more interesting. While Canada is inching toward ACTA implementation, the Mexican Senate voted on July 20 not to ratify the ACTA (document is in Spanish, but there’s always Google Translate). Reasons cited include concerns about the lack of information provided to the Senate during the negotiations (illegal under Mexican law), the lack of due process under ACTA and the cost of requiring ISPs to monitor and enforce copyright infringement in a way that’s currently illegal under Mexican law and the Constitution, as well as other issues like net neutrality, censorship and privacy concerns. They also raise the concern that ACTA could lead to restrict both freedom and Internet usage, potentially broadening the “digital divide” and restricting the introduction of beneficial new technologies that would support the development of the information society (a key Mexican development goal).

As I noted earlier, many of these findings support the view that the Mexican telecommunications industry is making its voice heard, and that concerns about economic development have trumped the previously dominant view in the Mexican Senate regarding the need to increase copyright protection.

So, for the time being, anyway, ACTA is a dead letter in Mexico. (Though it could come back.)

The different approaches of the two countries serves as yet another reminder of the effectiveness of using trade agreements to force copyright reform in partner countries (next example: the Trans-Pacific Partnership talks, whose IP aspects have been described as “ACTA the sequel”, only with a WTO-like enforcement mechanism). At the same time, however, Mexico’s current debate suggests the limit of this strategy. In situations where market access doesn’t exist as an incentive and where the domestic politics do not favour reform, it is much harder for one country to reform another’s copyright laws.

In other words, the Canada-EU trade talks allow the EU to link something Canada wants (market access) to something that the EU wants (Canadian IP reform along EU- and ACTA-friendly lines). Even though such reforms are not on their own beneficial to Canada for the reasons the EU report suggests above, there’s a pretty good chance they’ll happen, the result of a trade-off needed to get an agreement done.

In Mexico, no such linkage is happening, although it is part of the Trans-Pacific Partnership talks, along with the United States (Canada is not). And so ACTA is rejected, the victim of the mobilization of domestic constituencies.

Which brings us to the big question. Most major countries now have relatively open access to each other’s markets, so market-access is less of a problem for most countries than it was even two decades ago. Copyright laws, meanwhile, are regularly undermined by things like technological change. In a world where the IP powers can’t offer countries improved market access, but where they still want stronger copyright protection, how likely is continued copyright harmonization? If we want to predict the future, do we look to Mexico’s rejection of ACTA, or to the Canada-EU trade talks? Maybe I’m underestimating the appetite for more trade agreements?

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