Solutions for a Stalled NAFTA: Stop Pushing So Hard on IP, and Release the Text

The deadline for concluding a modernized North American Free Trade Agreement (NAFTA), originally scheduled for last year, has continued to slip. An eighth and final formal round of negotiations was cancelled last week, and despite earlier optimistic plans that the parties could announce an “agreement in principle” at the Summit of the Americas in Peru this Friday 13 April, these plans have since been abandoned.

An over-optimistic negotiation schedule isn’t the only problem here. The other is that United States Trade Representative (USTR) is pushing a hard line on topics such as intellectual property that neither of the other negotiating parties find remotely palatable. As a result, although advances have been made in some other chapters, reports suggest that virtually the whole of the agreement’s IP chapter remains up in the air.

In October 2016, as the Trans-Pacific Partnership (TPP) was beginning to falter, Steve Metalitz of the International Intellectual Property Alliance (IIPA) remarked with surprising frankness that “We may well have reached the high water mark of linking IP and trade.” Since then, more evidence has emerged that he was correct about this. One example is the suspension of most of the intellectual property chapter from the TPP, when it became the 11-country Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP). Another example is Europe’s backdown from its demands for a twenty year copyright term extension in the Mercosur-EU trade agreement. Other U.S. trading partners have also been expressing more critical views about the downsides of excessively long minimum copyright terms, and most surprising at all, so have representatives of copyright holders.

The USTR could continue to press its hard line on intellectual property for round after round, in the hope that Canada and Mexico would eventually capitulate. Or, it could easily remove one huge obstacle to the successful conclusion of NAFTA simply by dropping these tough demands, including its demands for extension of the copyright term, and concentrate instead on issues of more importance to the farming and manufacturing sectors.

Transparency is Another Key to the Smoother Conclusion of NAFTA

The low public support for the TPP, which ultimate led to the United States’ withdrawal from the agreement, has been attributed in part to the lack of transparency of the negotiations. Ahead of the commencement of the NAFTA negotiations, 52 members of Congress wrote to the USTR asking that the negotiations be made more open and transparent than the TPP had been. EFF wrote a similar letter.

Yet at the end of the official negotiating rounds, NAFTA is even less transparent and inclusive than the TPP had been. Not a single text proposal or consolidated draft has been released (or even leaked) to the public. The USTR has not yet appointed a Transparency Officer under the new administration, despite this being required under the Bipartisan Congressional Trade Priorities and Accountability Act of 2015. And there have been precisely zero stakeholder engagement events arranged for stakeholders to brief negotiators during the NAFTA negotiations, despite this having been a common practice during the negotiation of the TPP.

This month the Congressional Progressive Caucus released its Fair Trade Agenda [PDF], which recommends:

For the remainder of the NAFTA renegotiations, the Trump Administration should make draft proposals publicly available and should solicit Congressional and public input before finalizing the proposals. Negotiating texts also must be made publicly available after each negotiating round with the opportunity for public comment, so Congress can provide input in the process and so the American people can evaluate whether their interests are being advanced.

If these suggestions seem extreme, they’re really not. Similar recommendations were part of the Promoting Transparency in Trade Act that was reintroduced into Congress last July, but which has languished in committee since then. Europe has already adopted rules requiring its text proposals in trade negotiations to be released to the public, and the United Kingdom is considering going a step further, by requiring consolidated texts also to be released within ten days of each negotiation round. 

Although better transparency in NAFTA would be a way of gaining public trust in the agreement, it’s understandable why the USTR takes refuge in secrecy. Keeping controversial provisions out of sight and mind of the public while they are being negotiated—for example, tough secondary liability rules on Internet platforms may be under negotiation—spares the USTR from having to defend these to the public at the same time as it attempts to sell them to our trading partners. But the problem with waiting until the provisions have been agreed before releasing them to the public is that by that stage, it is practically impossible to improve them, or if necessary, to walk them back.

When it comes to the point that even copyright holder representatives are arguing against the USTR’s hard line on copyright, and when its transparency practices are falling out of step with those of our major trading partners, it’s time for the USTR to consider whether a course change is required. We think that trade agreements don’t have to be contentious: they could even be positive for users and innovators, if done right. But the longer the negotiations drag on without any sign that questions of transparency or IP overreach are being addressed, the harder it is to maintain this optimism.


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Author: Jeremy Malcolm

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