The third round of negotiations over the modernization of the North American Free Trade Agreement (NAFTA) is underway right now in Ottawa, and EFF is there to represent you. It's been a frustrating few days so far. Before explaining why, we'll skip straight to what you probably want to know: how close are the parties to a deal, and what do we know about what's in it?

Canada Bucks U.S. Copyright and Patent Demands

In the case of the Intellectual Property (IP) chapter, they are pretty far apart. That's because the United States, despite President Trump's criticism of the Trans-Pacific Partnership (TPP), is nevertheless using it as a template for the draft IP chapter that it is presenting to its negotiating partners in this round. Canada, however, isn't down with that. That's because Canada joined the TPP late, after most of the text had already been locked down, and Canada was prohibited from revisiting that text.

Canada's own preferred starting point for negotiation over IP is the original NAFTA, augmented by some newer instruments that Canada has subsequently signed and ratified such as the WIPO Internet Treaties, and its trade agreement with the EU, the Comprehensive Economic and Trade Agreement (CETA). Although there are still elements of those agreements that we are unhappy with, some of which were also part of TPP (notably CETA's criminalization of camcording in movie theatres), Canada's approach would avoid some of the TPP's biggest flaws such as the extension of the copyright term by 20 years.

On Sunday night the Centre for International Governance Innovation (CIGI), an independent but Canadian government-supported think tank, launched a publication NAFTA 2.0 and Intellectual Property Rights to an audience that included EFF and U.S. trade negotiators. The document makes a compelling case for Canada standing its ground on copyright and patent law, including this passage from Michael Geist:

As the country embarks on a new round of NAFTA talks, it should be recognized that Ottawa already meets its international obligations when it comes to respect for copyright and patents and has largely addressed long-standing U.S. demands regarding additional reforms. At a broad level, the Canadian negotiating goal should be to retain an appropriate balance, one that fosters creativity and access while ensuring that there is room for Canadian-specific policies that sit within the flexibilities of the international IP framework.

Although we haven't seen the U.S. draft text, reports suggest that Hollywood has succeeded in encouraging the U.S. Trade Representative (USTR) to omit a provision requiring the parties to have balanced copyright limitations and exceptions, such as fair use. That doesn't mean that the idea of such a provision is dead. Instead, it will fall to Canada to pick up the slack and promote copyright balance in the agreement, as well as to advocate for similar balance in patent law; for example through provisions to address the problem of patent trolling.

Electronic Commerce is now Digital Trade

What had been called the "Electronic Commerce" chapter in the TPP is now called the "Digital Trade" chapter, although once again the U.S. text proposal is based heavily on the TPP's text. In this instance, Canada and the United States are not so far apart, as they share agreement on most of the chapter's key objectives, including fostering the free flow of data online, and prohibiting data localization measures such as mandates that data must be stored on local servers.

Where they differ is on the question of how these objectives can be reconciled with local privacy laws, which can have the effect of limiting flows of personal data online. Since the three NAFTA countries have such different domestic privacy regimes, it's unlikely that the agreement will include new substantive privacy rules, but we expect that it will instead simply incorporate reference to the APEC and OECD privacy frameworks, an existing "lowest common denominator" between the three countries.

Another provision from the TPP which remains on the table for NAFTA is a ban on requirements that the source code of imported products be made open to review. EFF has explained how a blanket ban on source code review may not offer countries sufficient flexibility to address the critically poor state of security in many digital products such as Internet of Things (IoT) devices and routers. In any case, the provision addresses a problem that does not exist between the NAFTA countries, as none of them has imposed a source code review mandate. Since the provision is in response to such mandates imposed by China, dealing with this issue bilaterally with China would be a more targeted approach.

One of the biggest areas of difference between the parties in the Digital Trade chapter will be over the ISP safe harbor language, based on CDA Section 230, which the U.S. previously proposed in the Trade in Services Agreement. Unlike the United States, Canada and Mexico do not have a statutory rule that protects internet intermediaries from liability for user content. Thus, in those countries an Internet platform such as a web host or social media website risks becoming liable as the publisher of an allegedly defamatory article if they do not remove it in response to a takedown request from a third party. We can therefore expect to see the other parties suggest compromises to the U.S. language, if this provision survives at all.

Sliding Backwards in Stakeholder Consultation

As host of this round of negotiations, Canada has gone a little further to facilitate consultation between negotiators of the three countries and stakeholders. But when we say a little further, that's really what we mean. There is a room set aside in the negotiation venue, far away from the negotiations themselves, where stakeholders are provided with somewhere to sit, and with Wi-Fi access. They are not actually visited by any negotiators, nor do they receive any joint briefings.

Some stakeholders (including EFF) have been able to organize informal bilateral meetings with negotiators from the U.S. and Canadian delegations (though no one has met with the Mexican delegation that we are aware of). In both of the meetings that EFF attended, it was made clear that the meeting was off the record, and that if we reported back names or sensitive details of what we were told, there would be no future such meetings. Since this stricture runs directly counter to EFF's mission to bring light to these secretive negotiations, it is a highly unsatisfactory state of affairs.

Despite our request that the organizers include some official stakeholder events on the agenda, the only such events that have taken place in this round were self-organized by stakeholders, at their own expense. This included a wine and cheese event on Saturday night (that was attended by none of the IP or Digital Trade negotiators), and a seminar that we held on Friday jointly with the Canadian Internet Policy and Public Interest Clinic (CIPPIC), American University’s Program on Information Justice and Intellectual Property (PIJIP), OpenMedia, Public Citizen, and Public Knowledge.

If this continues, the only opportunity for us to expose this agreement to sunlight and to openly debate the proposals it contains will be if the draft text of the agreement is leaked. With nine fewer countries as part of these negotiations than the TPP negotiations, the prospects of such leaks emerging are much lower than before. We stand by our demands that the NAFTA countries should each release their individual text proposals at the same time as they are delivered to the other parties, they should release the draft consolidated text of the agreement after every negotiating round, and they should provide the public with an opportunity to be heard about these provisions.

At this third round of negotiations in Ottawa, the negotiators had a lot to do to convince us that the IP chapter of the agreement would adequately balance the demands of copyright and patent holders with the rights of the public, and that the Digital Trade chapter would leave countries adequate policy space to protect their citizens' privacy and security. For now, we haven't seen enough to convince us of either of these things, and unless there is a dramatic improvement in the transparency of the negotiations, it may be that we never will.

This post was updated on September 27 to add a link to CIGI's NAFTA 2.0 document, which has since become available online.