New NAFTA allows Super Bowl simsub ahead of SCC review

The new trade pact forged by Canada, the U.S. and Mexico to replace the North American Free Trade Agreement (NAFTA) holds onto a key exemption for Canada’s cultural industries but contains a range of revisions to intellectual property, digital trade and broadcasting policies, including the overturning of a controversial CRTC decision preventing substituting American ads during the Super Bowl. The new agreement comes in the middle of Parliament’s statutory review of the Copyright Act and could be signed by Mexico just days before Canada’s top court hears Bell’s appeal of the CRTC’s Super Bowl ad decision. In a win for BCE Inc., the new United States-Mexico-Canada Agreement (USMCA) overturns the 2015 CRTC decision on simultaneous substitution for Super Bowl advertisements that said Canadians must be able to see American ads. That comes after a strong push from the National Football League (NFL) and American networks, which had pressed the U.S. Trade Representative (USTR) to make simsub part of the NAFTA renegotiation talks. The NFL and Canadian advertisers had long been lobbying Canada behind the scenes to nix the policy. An annex in Chapter 15, which deals with cross-border trade in services, sets out Canada “shall rescind” the broadcasting regulatory policy and order regarding the simsub ads, and it “may not accord the program treatment less favorable than the treatment accorded to other programs originating in the United States retransmitted in Canada." It's unclear what this agreement means when the Supreme Court of Canada hears the case in December, which Bell has been arguing should be overturned. On another broadcasting matter, the agreement’s copyright chapter maintains that signatory countries can still allow for retransmission of foreign, free over-the-air (OTA) broadcasts, despite a long-standing dispute by U.S. border stations that want compensation. It also states that Canada “shall ensure that U.S. programming services specializing in home shopping, including modified versions of these U.S. programming services for the Canadian market, are authorized for distribution in Canada.” The deal will also establish a trilateral committee on telecommunications, made up of government representatives from each country to review implementing the pact’s telecom provisions, set out in Chapter 18. It states the committee will enable “responsiveness to technological and regulatory developments in telecommunications.” That chapter sets out a number of broad principles for how networks should operate, including preventing anti-competitive behaviour in the telecom sector, ensuring network interconnection between countries -- including that a major supplier in each country will provide access to infrastructure like poles, ducts and conduits to another -- and preventing member countries from interfering with the choices of technologies countries wish to “use to supply their services.” The Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) welcomed the reversal on Super Bowl ads and what it called a “broader platform-neutral cultural exemption” in the agreement. Canada’s notice-and-notice regime for dealing with copyright infringement, which requires ISPs to pass on notices from rights-holders warning of copyright infringement, will remain the same, according to an annex in the copyright chapter. That’s despite complaints lodged to the USTR by the Entertainment Software Association that it’s not effective because it doesn’t require taking the content down. Both data localization and safe harbour provisions are something U.S. e-commerce companies, through the Internet Association, had advocated for the USTR change in NAFTA. Chapter 19, which deals with digital industries, includes provisions that prevent countries from adopting rules or measures that would make technology companies like IBM Corp., Alphabet Inc.’s Google or Facebook Inc. responsible for the content posted by individual users when it comes to copyright. Last year, in a case related to this measure, a U.S. court found Google did not have to comply with a Supreme Court of Canada order to scrub its index of an alleged intellectual property infringer because it does not govern the content it posts on its services. The chapter also restricts data-localization rules, which would force a business’s data-storage facilities to be domestically located in a specific country. “No party shall require a covered person to use or locate computing facilities in that party’s territory as a condition for conducting business in that territory,” it sets out. That was one recommendation the USTR made in early NAFTA talks. Companies like Amazon.com Inc., Facebook and Netflix Inc. have noted that such access restrictions limit their growth. As some experts and stakeholders have predicted, NAFTA’s cultural industry exemptions have been carried over into the new deal – something Prime Minister Justin Trudeau effectively described as a non-starter last month, although they had been brought up in the bargaining process. Those rules prevent foreign ownership of Canada’s cultural sector, such as purchases of Canadian TV networks. A push for concessions from Canada’s dairy sector and the NAFTA dispute-resolution mechanism had been major sticking points that had held up talks, which have slogged along slowly for more than a year. Trudeau said once the dispute-mechanism was sorted out, he then “started to realize” Canada would be able to reach a deal. While the Opposition largely focused on criticizing the big-ticket changes in question period – dairy and pharmaceutical patent “concessions” – Conservative MP Pierre Poilievre also charged that the Liberal government had “backed down” on a number of issues, including copyright. University of Ottawa professor Michael Geist wrote in a blog post on his website that because the digital provisions closely resemble the Trans-Pacific Partnership deal the Conservatives negotiated, it’s “unlikely” they would oppose those provisions outright. He wrote the agreement will result in “significant” reforms on copyright that “should be factored into the current copyright review.” Canada and the U.S. have been working toward an October deadline to get a new deal approved by U.S. Congress – which requires a two-month review period – so Mexico can also sign on before its new administration is sworn in come December. The announcement of a deal came late Sunday, on the heels of a rare and last-minute federal cabinet meeting before the deadline. Former prime minister Brian Mulroney hailed the new trade pact as “highly significant” in a statement Monday. The agreement sets out a “joint review” after six years. — With reporting by Kyle Duggan at kduggan@thewirereport.ca and editing by Ahmad Hathout at ahathout@thewirereport.ca

New NAFTA allows Super Bowl simsub ahead of SCC review

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New NAFTA allows Super Bowl simsub ahead of SCC review

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