June 20, 2017
Our last international trade brief dealt with Global Affairs Canada seeking comments on NAFTA renegotiations, the increased enforcement of U.S. trade laws, a Trade Case Alert pertaining to anti-dumping import duties for gypsum panels shipped to Western Canada, and a Trade Case Alert dealing with a global safeguard investigation into solar panels imported into the U.S. In this brief, we discuss why Canada should forge ahead with the TPP without the U.S., U.S. retailers’ priorities for NAFTA renegotiations, the public comments on NAFTA renegotiations, NAFTA becoming a battleground for trade-related IP obligations, and a Trade Case Alert relating to a Canadian anti-dumping and countervailing investigation being initiated for certain carbon and alloy steel line pipe from Korea.
Nearly a quarter-century ago, the United States, Canada and Mexico included the first-ever modern intellectual property chapter in an international trade agreement. Chapter 17 of the North American Free Trade Agreement (NAFTA), implemented in 1994, was negotiated against the backdrop of ongoing negotiations of the multilateral WTO TRIPS Agreement (TRIPS), which has served as the backbone for global intellectual property standards for over two decades.
Since NAFTA and TRIPS, the United States has worked to commit trading partners to enhance their intellectual property (IP) protection over and above TRIPS standards. The U.S. achieved this through the Trans-Pacific Partnership (TPP), committing Canada and other TPP members to abide by numerous intellectual property treaties, codify minimum pharmaceutical IP protection standards, and enhance copyright terms and scope of protection. That was, until President Trump withdrew U.S. participation in the TPP just a week after being inaugurated, by issuing his first executive order.
It is against the backdrop of the withdrawal of the U.S. from TPP that NAFTA’s three member nations will negotiate an updated NAFTA IP chapter. The TPP IP chapter will almost certainly be the starting point for negotiations. Canada was instrumental in striking balances between U.S. and developing country positions on key IP issues including pharmaceutical data protection and internet service provider liability for third-party copyright infringement. Expect the U.S. to continue to push Canada to ratchet up its IP protection or, at minimum, to use IP concerns as negotiating leverage for more contentious issues.
Canada is unlikely to capitulate on IP issues this time around. It has already made IP concessions in the course of Comprehensive Economic and Trade Agreement (CETA) negotiations, expanding IP protection for pharmaceuticals and signing on to all major IP treaties. The Canadian Intellectual Property Office now indicated it will begin consultations to implement CETA-related changes this summer. Additionally, the Government of Canada has stated it is developing a 21st-century intellectual property strategy, which will be applied not only to NAFTA, but also to ongoing trade negotiations with China, MERCOSUR, the remaining TPP members and others. Canada is far better prepared for a trade-related IP negotiation than it has ever been and may even see fit to push back on TPP concessions.
As with NAFTA negotiations 25 years ago, other countries will watch closely to see where NAFTA ends up on IP issues, as Canada has a reputation for taking a balanced approach to the promotion of innovation and affordable access to goods and services. Global Affairs Canada (GAC) is eager to consult with Canadian stakeholders doing business in the NAFTA region to ensure it is best representing the interests of Canadians and striking the right IP balance for Canadians. The deadline for making submissions is July 18, 2017. To arrange an introduction to IP subject matter trade negotiators at the GAC and participate in this process, please contact either Nathaniel Lipkus or Riyaz Dattu at Osler.