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Canada will also be pressed to adopt more stringent copyright laws
June 27, 2012
EDMONTON, AB, Jun 27, 2012/ Troy Media/ – While negotiations extending trade through international institutions like the World Trade Organization have been bogged down, the push is on to sign bi-lateral and multi-lateral agreements. Now, with Canada’s push to join the Trans-Pacific Partnership (TPP) only just beginning, there will be a couple of quintessentially Canadian debates.
Supply management in dairy and poultry has long been a major trade irritant for a couple of countries already involved with the TPP, New Zealand and Australia in particular, as it effectively precludes trade in the sector.
Under supply management a marketing board can regulate prices by matching the amount of quota with demand. It’s the quota that gives a farmer the right to sell their produce legally in Canada. The farmer is out the cost of the quota, but is guaranteed a stable price.
It’s not uncommon for countries around the world to provide public support to their agriculture sectors, with carve-outs often crafted to accommodate them in trade agreements (such as was the case with North American Free Trade Agreement (NAFTA), but there is never a guarantee that this will happen.
Agriculture is treated differently than other industries largely because when industries are opened up to trade there is an inevitable shift in where production takes place. This has important distributional impacts, with rural areas impacted disproportionately, but because food is a necessity there’s also reluctance to having a reliance on imports.
Aside from supply management, Canada will also be pressed to adopt more stringent copyright laws. In 1996 Canada became a signatory to the World Intellectual Property Organization (WIPO) in which Canada committed to updating the Copyright Act for the digital age. Bills have been introduced in parliament to update the act numerous times between 2005 and 2011, but every attempt has died thus far.
How far the state should go to protect intellectual property is under constant debate. The promulgation of new knowledge and art often depends on the wide dissemination of protected work but, of course, if that work isn’t sufficiently protected in the first place then there’s less of an incentive to produce the work in the first place.
The debate in Canada has been that the proposed changes will follow the American lead and tip the balance too far towards the latter. The Americans conformed to their World Intellectual Property Organization (WIPO) treaty commitments with the adoption of the Digital Millennium Copyright Act back in 1998. Under the law it became illegal to even attempt to circumvent digital locks used to protect the rights of copyright holders and dramatically increased the fines for copyright infringement.
In short, the risks associated with pirating went up significantly – putting a chill on anyone who might attempt to use protected material, even if they could make a case that they had a fair-use right to using the work.
It’s not surprising that the United States would want to err on the side of the rights of copyright holders. In 2011, American companies had a trade surplus of $84 billion in royalty and licensing fees, which is 47 per cent higher than five years ago, and accounts for about 50 per cent of the country’s trade surplus in services.
The Americans have a huge comparative advantage in intellectual property and want to ensure that the digital content that American companies are largely producing is sufficiently protected.
Trade is not supposed to be a zero-sum game, with only one nation winning. Trade can often lead to all parties benefiting significantly due to the more efficient allocation of production. The distribution of who benefits within any nation will change, but by in large, the net effect on economic growth of trade agreements has been positive throughout history.
At the end of the day every nation has different goals and objectives in mind, many of which aren’t economic in nature. And the more seats that are pulled up to the negotiating table makes it more difficult to reach consensus, but it’s certainly better to be at the table than not.
Will Van’t Veld is an economist with ATB Financial.
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