Canada's NAFTA stance on culture is all about politics, not policy

The exemption Canada negotiated forcultural industries in its first free trade agreement with the United States still haunts the renegotiation of NAFTA three decades later.

But isthis perennial "red line" for Canadian trade negotiators smart policy, or just smart politics?

"It is inconceivable to Canadians that an American network might buy Canadian media affiliates, whether it's newspapers or TV stations or TV networks," Prime Minister Justin Trudeau told reporters last week, as his officials began briefing journalists on how the Americans weren't prepared to sign off onthe status quo.

Groups representing Canadian artists and others who make their living producing Canadian content were quick to man their barricadesparticularly in Quebec, where French-language cultural programming is seen asa bulwark protecting the province's unique identity in North America.

Trudeau on Chapter 19, culture in NAFTA talks

6 years ago

Duration 1:37

Prime Minister Justin Trudeau says Canada will stand firm on protecting Canada's cultural sectors and dispute resolution mechanisms during NAFTA talks.

But somestudying the updated negotiating objectives presented to the U.S. Congress seem skepticalthat the U.S. is planning a sudden lunge to gobbleup Canadian media assets.

"I would be pretty surprised if [U.S. Trade Representative Robert Lighthizer's office] wasn't willing to accept some limitations around foreignownership of Canadian media. That hasn't been controversial in the past," said Meredith Lilly, a former trade adviser in Stephen Harper's office who now teaches at Carleton University.

While the Canadian government speaks of maintainingthe existing cultural exemption, its preservation may not be the issue.

Instead, it needs updating. It was drafted inan era of print mediaand over-the-airwaves broadcasting.If negotiators are sincerely trying to modernize the North American Free Trade Agreementfor the 21st century, they have to confront new questions.

"That [NAFTA] exemption does not include clear language on the internet," Lilly said.

The Trans-Pacific Partnership trade agreement negotiated byprevious Canadian and American governments includedlanguage on digital communications and e-commerce."It would represent a real hole" if a reworked NAFTAdidn't acknowledgecultural products in thedigital economy, she said.

The TPP preview

When the United States pulled out of the TPP, the 11 remaining countries, including Canada, made revisions before proceeding with therenamed Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).

The Canadianssought and received agreement from each remaining countryto suspend language the U.S. had asked for on digital content.

With this revision, Canada canrequire financial contributions for Canadian content development from cultural service providers and investors in ways that might discriminate between Canadian and foreign media.

Restricting access to foreign audio-visual content online is alsopossible, thanks to the language Canada got suspended.

Where does this leavethe NAFTArenegotiation?

While the USTR's negotiating objectives don't mention culture as such, they do mention "non-discriminatory treatment of digital products transmitted electronically" and instruct negotiators to "guarantee that these products will not face government-sanctioned discrimination based on the nationality or territory in which the product is produced."

So maybe the U.S. is digging in for a battle over cultural policy inNAFTA. Does Canada feel strongly enoughto hold out?

Lilly said that if language allowing Ottawa to discriminate between domestic and foreign digital content isn't a part of the renegotiated NAFTA, "the government would have a difficult case asserting in the future that those kinds of activities would fall under the [cultural] exemption."

As an example, considerthistimely policy question: How could a Canadiangovernment support vibrant journalism at a time when traditional revenue models appear to be broken beyond repair?

If a future government program fundedCanadian digital ventures without the protection of some kind of NAFTA cultural exemption, American media outlets operating in Canada could litigate for their right to access Canadian taxpayers' money.

"It's a matter of carving out an exemption that both protects whatever it is that exists today, but also protects whatever it is that the government thinks they want to do from a policy perspective next year or the year after," Lillysaid.

Inconsistent positions?

University of Ottawa law professor Michael Geist, who specializes in the internet and e-commerce, said he doesn't see theUSTR'snegotiating goals on digital content as unreasonable, or worth the fight from Canada's point of view.

For starters, trade agreements aren't the right place to negotiate these matters, he said.

But on the substance, not discriminating between foreign and Canadian content creators "seems perfectly fair," he said. "If you're requiring someone to pay [into a fund for Canadian content], certainly they should be able to enjoy the benefits"through access to itsfunding or programming, he added.

As for blocking access to foreign audio-visual content, "that's inconsistent with the principle of net neutralitythat [Canada] also supports," he said.

Trudeau callingforeign media ownership "inconceivable" ignores the fact that lots of foreign media companies already operate in Canada, and foreign investors hold stakes in Canadian media.

"There's no reason to believe that a foreign owner would be less likely to produce Canadian content," Geist said if audiences want it, and the rules require it, there will be Canadian content.

"You win and you attract audiences not by virtue of ... the nationality of your owners," he said.

In some cases, a deeper-pocketed foreign owner may help keep struggling enterprises afloat, andoffer audiences more choice, said Geist.

Political cover for a dairy concession?

Mexico isn't particularly interested in the cultural exemption. When the first NAFTA was negotiated, the text wasessentially copy-pasted from the Canada-U.S. trade agreement that came before.

Perhaps it's no surprise, then, that cultural protections didn't come up when the talks were trilateral.

As high-stakes bilateral negotiations continuebetween Canada and the U.S., Geistsaid he thinks Canada has bigger issues it should focus on, such as U.S. demands for anextension of copyright terms or longer drug protections.

Mexico already agreed to these, and now the pressure's on Canada.

Clinging tocultural restrictions is "anti-consumer," he said.

So why do it?

"The issue plays well in Quebec, and copyright term doesn't," Geistsaid. "The policy goal is just to curry favour with certain groups, for whom the very notion that culture can be a subject in a negotiation in a trade deal is anathema."

Farmers protest outside Trudeau's riding office

6 years ago

Duration 0:27

Hundreds of young farmers held a protest outside Prime Minister Justin Trudeau's riding office in Montreal to remind negotiators to keep fighting for them at the NAFTA table.

When Stephen Harper's government agreed to some U.S. demands in theTPPtalks to prevent governments from discriminating between foreign and domestic online content, said Geist,it was seen as offside by politically-active groups who insist on culture being left off the table in trade talks.

When the CPTPP was revived, the new Liberal government had to "make a lot of noise" to distinguish itself with "voting blocks" in places like Quebec and Toronto, Geistadded.

At the time, that noise obscured the fact that the revised CPTPPstill made an economically-significant incursion into Canada's dairy marketsomething that traditionally upsets significant numbers of Quebec voters.

A revised NAFTA appears to make similar demands.

The Trudeau Liberals may be hoping their loud defence of Canadian culturecan balance off another dairy concession.