Key Council Recommendations for Priority Consideration in NAFTA Modernization
The global economy has fundamentally transformed over the quarter century since NAFTA was signed, with the internet and related e-commerce being leading examples of technologies that were only nascent in 1993 and therefore not fully or adequately incorporated into the original agreement. Businesses of all sizes, across all sectors, rely on digital technologies and the free flow of data across borders to conduct their business and access new markets. We are therefore encouraged by recent comments by U.S. Trade Representative Robert Lighthizer and Secretary of Commerce Wilbur Ross recognizing the importance of digital trade in NAFTA modernization. Accordingly, we encourage the administration to include forward-looking digital trade provisions in a modernized NAFTA to ensure that businesses can transmit data across borders, without arbitrary requirements to store and process data locally as a condition of doing business. Digital trade provisions developed with input from stakeholders in all three countries would enable cooperation on critical issues of cybersecurity and intellectual property rights, and can also set a new standard for future trade agreements. Well-designed digital trade provisions in a modernized NAFTA can also address issues of incompatible digital regulatory frameworks, which disrupt the ability of companies to trade across borders. NAFTA should include a commitment to adopt high-standards legal frameworks to protect personal information, while also adopting and implementing mechanisms that ensure the compatibility of these legal frameworks. A revised NAFTA should also include provisions that ensure the development of online consumer protection and cybersecurity regulatory frameworks that strengthen trust and facilitate trade across the regional digital economy. It should avoid differentiation between financial and non-financial data. Measures to force the sharing of software source code with foreign entities should be prohibited.
Intellectual Property Rights
The intellectual property chapter should help U.S. companies protect their valuable intellectual property by establishing criminal procedures for trade secret theft, including by SOEs and by means of cyber-theft. This would also prevent governments forcing companies to disclose trade secrets as a condition of market access. The chapter should commit to ensuring the availability of mechanisms to enforce intellectual property rights, including civil and administrative procedures and remedies, and particularly provisional measures including ex parte injunctions and seizures and criminal enforcement. This is an important precedent for U.S. companies that face significant challenges involving trade secret theft both through employee misappropriation and by means of computer hacking. NAFTA should mandate that parties establish copyright safe harbors for internet service providers (ISPs), while providing safeguards against abuse of such regimes and not requiring those ISPs to monitor content on their networks or systems. This signifies that legitimate providers of cloud computing, user-generated content sites, and other internet-related services can develop their businesses online while ensuring that internet copyright privacy be addressed.