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BC privacy law, federal information technology procurement both trade barriers, says U.S. government

A freedom of information request by the BC Freedom of Information and Privacy Association (FIPA) has revealed evidence of U.S. government lobbying against privacy laws in the province, as well as a campaign against federal procurement policies that shut out U.S. companies, even though both of these policies are supposed to make sure sensitive personal information stays in Canada. 

“We at BC FIPA have obtained internal USTR documents through the American Freedom of Information Act that show major US companies have complained to the USTR about BC’s requirement that government and other public sector data be stored in Canada,” says a release from the privacy watchdog.

“The documents we obtained from the American government also show the USTR’s concern over increasing use by Canada of the National Security Exception in NAFTA to keep American companies from bidding on Canadian government contracts,” continues the FIPA release. “These included a new electronic communications system for the federal government and ‘fully integrated software service’ for the Canadian Tourism Commission. Both contracts were restricted to Canadian companies and the data was required to be stored in Canada.”

The U.S. documents show clear frustration with Canada limiting bids on information technology contracts to Canadian companies, or conditions in bids requiring local storage of personal information as opposed to, say, storage in a U.S.-based server or cloud. The issue has become one of several major problems in the ongoing Trans-Pacific Partnership negotiations, with a few countries insisting on the right to store data locally.

As well as the privacy benefit, local content rules can have added economic benefits, for example by creating or keeping jobs in Canada. The Harper government has been proudly declaring its right under existing trade deals to have a made-in-Canada defence strategy. It’s unfortunate that buy-local policies in most other sectors would be prohibited if the Canada-European Union Comprehensive Economic and Trade Agreement is ever signed and ratified.

Speaking of CETA, the BC FIPA press release concludes that “Canadians should not feel smug,” since the European Parliament “is going to re-examine whether our privacy laws are adequate to allow data transfer with Europe.

“This comes as part of the fallout from the revelations by Edward Snowden that our electronic spy agency, the Communications Security Establishment Canada (CSEC) is working hand in glove with the US National Security Agency (NSA) to intercept an enormous amount of communications from all over the planet.”

Commenting on the EU review of Canada’s privacy rules, Michael Geist says:

Given the Canadian government’s emphasis on expanding European trade through the new Canada – EU Trade Agreement, a change in the adequacy status of Canadian privacy law could be enormously damaging. Moreover, given that the European Parliament will ultimately be required to approve CETA, the concerns about the trustworthiness of Canadian law within the EP could lead to opposition to the broader trade deal.

So while Canada fights with USTR about the adequacy of U.S. privacy law, the U.S. believes Canada’s relatively stronger privacy rules are an illegal trade barrier. Meanwhile the EU could soon declare Canada’s privacy rules inadequate, potentially stopping transatlantic business interactions and endangering the CETA negotiations.

The underlying problem is the abuse of privacy by all parties. Whether stricter privacy policies are a barrier to trade should be an afterthought or irrelevant. The TPP and CETA trade negotiations are therefore, in a tangential way, a distraction from dealing with that much more important issue of governments and companies hoarding and sharing enormous amounts of personal information on their populations. 

These deals are also, ironically, a new target of illegal spying by Five Eyes countries like Australia and possibly Canada. The Indonesian government recently complained that it’s trade negotiations with the United States were being observed by the Australian Signals Directorate and shared with U.S. officials.