OTTAWA, ON (May 23, 2019): Despite the successful negotiation of the United States-Mexico-Canada Agreement (USMCA) last year and a recent deal on eliminating steel and aluminum tariffs, the ratification of the USMCA remains anything but certain.

Vocal critics have declared that Canada gave away too much on intellectual property (IP) in negotiations with the US and Mexico. They claim the provisions in Chapter 20 of the USMCA, the IP chapter, will add billions of dollars to our health care costs, limit creativity, and unfairly constrain online platforms.

A new report by the Macdonald-Laurier Institute addresses each of these critiques and debunks the myths about the USMCA, which in fact will be a boon to Canadian innovators and creators. In the report, titled Who’s afraid of the USMCA? Why the intellectual property provisions in the US Mexico Canada Agreement are good for Canada and its trading partners, author Richard Owens finds that the deal will net a significant benefit for Canada’s innovative economy.

“Criticism of the IP provisions of the USMCA is unwarranted,” writes Owens. “They will do much to benefit creators and innovators not just in Canada, but in the US and Mexico. They are good for Canada and this country must not delay ratification of this critical trade agreement.”

Better protecting IP would encourage innovators to bring their ideas, skills, and lucrative business ventures into the Canadian economy. This means that by strengthening and harmonizing our IP system, Canada can attain a greater degree of prosperity.

Owens explains that “strong, and shared IP standards increase trade and foreign direct investment; they aid small firms in capital acquisition and in their negotiations with larger ones, thereby facilitating the establishment and growth of small and medium sized firms and incidentally checking monopolistic and predatory behaviour of larger firms; and they provide incentives to invest in innovation.”

As it stands, Canada’s IP regime is ranked 19th out of 50 countries by the Washington-based Global Innovation Policy Center (GIPC), suggesting that there is significant room for improvement. If Canada were to elevate certain IP provisions to be in line with the American standard as USMCA requires, we would be much more in line with the world’s most innovative economies.

In particular, Owens finds that USCMA would help improve the copyright system, reward cutting-edge medical and pharmaceutical research, broaden patent protections, and more. This means that authors, artists, researchers, and other innovators would be encouraged to pursue their dreams in Canada. Owens also concludes that the perceived harms of the IP chapter are overstated.

“The USMCA contains measured, beneficial steps along the road to improving IP protection in Canada, and to enhance high-value trade among the parties,” writes Owens. “These steps will be good for trade and foreign investment and good for Canada’s domestic IP economy. They will also further protect Canadian cultural goods.”

To learn more about why the USMCA is good for Canada’s innovative economy, read the full paper here.

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Richard Owens is a Munk Senior Fellow with the Macdonald-Laurier Institute and a lawyer who has specialized in business and commercial law, regulation of financial institutions, intellectual property and technology. He has served financial services providers, technology companies, drug companies and others in Internet, technology, intellectual property strategy and patent law, M&A, outsourcing, strategic alliance and joint ventures, licensing and other areas.

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Brett Byers-Lane
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613-482-8327 x105
brett.byers-lane@macdonaldlaurier.ca