The United States-Mexico-Canada Agreement (USMCA), which enters into force today, represents a significant achievement by all three countries in establishing strong, balanced rules for the 21st century North American economy. BSA | The Software Alliance applauds the work of Canadian, Mexican, and US negotiators in designing new rules to secure the digital economy – facilitating the free flow of knowledge, information, and other data across the continent, while also offering Canadian, Mexican, and US citizens the highest standards of privacy and cybersecurity protections found in any international trade agreement. The Agreement is a model for ongoing and future 21st century trade negotiations around the world.
The USMCA’s digital trade provisions offer a robust and forward-looking vision of digital trust and data responsibility, including meaningful disciplines that aim to safeguard citizens’ privacy; network and cybersecurity; and online consumer protection, including from spam and from fraudulent or deceptive commercial practices.
The USMCA contains important safeguards against emerging digital protectionism, prohibiting:
- data localization requirements,
- cross-border data transfer restrictions,
- discrimination against digital products,
- customs duties on electronic transmissions,
- requirements to transfer source code, algorithms, or proprietary technologies,
- discrimination in favor of state-owned enterprises, and
- requirements to undermine encryption in commercial products.
The USMCA also fosters digital integration across North America and beyond, supporting public availability of non-sensitive government data; copyright rules that allow for commercial data analytics and that include liability safe harbors consistent with US law; appropriate treatment of legal claims arising from conduct by third parties online; and freedom of choice in the access to and use of digital devices and services.
Particularly noteworthy are USMCA’s robust privacy protections. The USMCA matches or exceeds the levels of privacy protection negotiated in other international trade agreements. For example, the agreement:
- requires Parties to take account of privacy-related principles of relevant international bodies, such as APEC and the OECD,
- recognizes core privacy principles including choice; data quality; purpose specification; limitations on collection and use; security safeguards; transparency; individual participation; and accountability,
- underscores that any cross-border data restrictions should be necessary and proportionate to any privacy risks presented,
- urges the Parties to ensure that protections are implemented in a non-discriminatory manner,
- mandates the publication of information on privacy protections, including regarding remedies and compliance obligations,
- fosters the development of interoperability mechanisms to promote compatibility between different privacy regimes.
With the most advanced digital trade and IP provisions of any trade agreement, the USMCA will not only help drive innovation and growth across North America, but will also serve as an important model to address the 21st century digital and economic challenges facing economies around the world.
To learn more about BSA’s work on digital trade issues, please visit https://www.bsa.org/policy-issues/trade.
