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NAFTA’s cultural exception top priority for Canada heading into negotiations

Chrystia Freeland (Brian Ferraro)

Chrystia Freeland (Brian Ferraro)

Foreign Affairs Minister Chrystia Freeland released a list of Canada’s key demands on Monday in advance of a first round of renegotiations for an updated North American Free Trade Agreement, set to begin Aug. 16 in Washington. The priorities – covering broad territory from Indigenous and gender rights to environmental protection – includes maintaining NAFTA’s cultural exception, which aims to protect Canada’s publishing and broadcast industries.

In July, the Association of Canadian Publishers submitted its input to Global Affairs Canada, on behalf of the 115 independent English-language publishers the advocacy organization represents. The seven-page paper expresses why the cultural exception is vital to the health of the industry, given that Canadian publishers currently earn $53 million annually in book and rights sales to the United States.

According to Kate Edwards, ACP executive director, the exception has provided the Canadian government with freedom to develop funding programs as well as policies that restrict the foreign ownership of cultural industries without fear of interference or objection from the U.S. over unfair competition. If the cultural exception were to be eliminated, “the outcome would set us back decades,” says Edwards. “Without that infrastructure and those regulations in place, the playing field becomes tilted very heavily in favour of multinational interests and imported books and all of those factors that make this market so competitive already, even with these protections in place. Whether those programs and policies would be challenged by the U.S., they certainly could be through a [World Trade Organization] process without the exception.”

Months before Global Affairs Canada’s June call for public feedback on its priority list, the ACP struck a working group, following the inauguration of U.S. President Donald Trump in January, tasked with preparing for the inevitability of renegotiation. The background paper and final submission discusses copyright reform and ebook piracy laws, distribution and dual pricing. “The overarching recommendation is maintenance of the cultural exception in any renegotiation or modernization of NAFTA, but because the agreement is so comprehensive and covers really every element of the economy, beyond book publishing, we did take the opportunity to talk about some other areas that are certainly going to come up, including intellectual property,” says Edwards. (The “adequate and effective protection of intellectual property rights” is one of 100 demands put forth by the U.S. in its summary of objectives.)

Although Trump has been vocal about his desire for Buy American policies, the current imbalance of the market sizes in favour of the U.S. may keep the cultural exception safe. “The U.S. does not have a trade deficit with Canada in terms of books. Canada is the U.S.’s biggest export market for books,” says Edwards. “And certainly, like in early discussions, the American administration suggested that they are interested in looking at sectors where the U.S. is in a deficit position. I think Canada comes into this with a strong argument for the need to maintain that cultural exception and for the infrastructure that’s in place to support cultural industries.”

The first talks, which run from Aug. 16 to 20, will be followed by a second round in Mexico and a third to be held in Canada. Given the breadth and complexity of the issues to be covered, Edwards anticipates a long process ahead. “Book publishing is a tiny piece of the bigger agreement, and I know how much work we’ve spent on it,” she says. “So if you multiply that across all sectors and knowing that this process is going on here in the U.S. and in Mexico, too, it’s very significant.”