Canada and Mexico announced yesterday their formal entry into the Trans-Pacific Partnership trade negotiations. The TPP now includes 11 countries–Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States–but it is largely a U.S.-driven process. As such, with the exception of some pressure from New Zealand and Australia on dairy, Canada will face the most pressure from its earliest free trade buddy to get rid of longstanding irritants to U.S. industry and lobby groups.
For example, The Wire Report and Embassy Magazine both report this week that an association of U.S. software, music, film and television firms, the International Intellectual Property Alliance (IIPA), wants Canada to get rid of the cultural protections it normally includes in free trade deals.
“IIPA strongly believes that the TPP market access chapters must be comprehensive in scope, strictly avoiding any sectoral carveouts that preclude the application of free trade disciplines,” said the IIPA’s September 4 submission to the USTR on Canada’s entry to the TPP. Among those carveouts listed are “[Canadian] content quota requirements for television, radio, cable television, direct-to-home broadcast services, specialty television, and satellite radio services.”
The industry alliance also wants more copyright changes than what Canada recently made in its new legislation, claiming that “Bill C-11 fell short of bringing Canadian law into step with the current global standards that the TPP agreement should embody.” Those standards should include greater enforcement against online piracy and statutory damages in copyright infringement cases that the U.S. industry feels are too low to act as a deterrent. There should also be longer protection terms on copyrighted material, the submission says.
Privacy laws that limit the cross-border sharing of personal information are also listed in the IIPA submission to USTR as an unfortunate trade barrier. This comes on the heels of a Privacy Commissioner of Canada report that commercial websites in Canada are “leaking” personal information in possible contravention of Canadian privacy laws.
“In the context of cloud computing and other online delivery of content and services it is critically important to secure the freedom to transfer and exchange data among data centers that are located in different TPP countries,” says the alliance. “Laws and regulations concerning data privacy and data security, for example, must not be permitted to prevent the flow of data across international boundaries.”
OTHER U.S. INDUSTRY COMPLAINTS
For a comprehensive list of Canadian policies that are bound to come under pressure in the TPP negotiations, see the USTR’s 2012 National Trade Estimate Report on Foreign Trade Barriers. The annual compilation looks much the same for Canada year after year. The 2012 report lists the following Canadian trade and investment barriers:
– Agricultural supply management: “Canada‟s supply management regime severely limits the ability of U.S. producers to increase exports to Canada above the TRQ levels and inflates the prices Canadians pay for dairy and poultry products. The United States has pressed for expanded in-quota quantities for these products as part of the negotiations regarding disciplines on TRQs in the WTO Doha Round agricultural negotiations.”
– Compositional standards for cheese, “further restrict U.S. access to the Canadian dairy market. These regulations limit the ingredients that can be used in cheese making, set a minimum for raw milk in the cheese making process, and make cheese importers more accountable for ensuring that imported product is in full compliance.”
– Kernel Visual Distinguishability (KVD) requirements “limited U.S. export access to Canada’s grain market because U.S. [wheat] varieties are not visually distinct and cannot be registered for use in Canada.”
– A personal tax exemption for cross-border shopping that is too low.
– Wines and spirits measures that apparently limit U.S. market access, including “cost of service markups, listings, reference prices, labeling, discounting, distribution and warehousing policies.”
– The Canadian Wheat Board.
– The same-old softwood lumber dispute.
– Aerospace subsidies, in particular for the Bombardier C-class jet.
– The Ontario Green Energy Act, mainly because of its domestic content requirements on solar and wind projects, which are a requirement in order for power producers to access high feed-in-tariffs for power supplied to the grid.
– The above mentioned intellectual property concerns, as well “Canada’s current administrative process for appeals of the regulatory approval of pharmaceutical products, and limitations in Canada‟s trademark regime.”
– Foreign ownership limits on telecommunications activities, including wireless, and rules governing the nationality of members of boards of directors.
– Canadian content requirements on Canadian and Quebec television and radio.
– The Investment Canada Act, which requires reviews of all foreign takeovers over a certain dollar value threshold.
– Procurement by Crown corporations not covered by the WTO Agreement on Government Procurement.
– A “245 percent ad valorem tariff on U.S. exports of breaded cheese sticks.”
Some big-time policy changes are on the horizon through the TPP negotiations. Many of them are not worth the meager economic gains Canada is expected to achieve. Most of them will tie the hands of future governments that may want to take a more active role in encouraging non export-oriented economic activities closer to home.
But think of all those cheese sticks…
