New US-Mexico-Canada trade deal alarming for global trends in consumer privacy

8 October 2018: The United States-Mexico-Canada Agreement (“USMCA”), a remodelling of the North American Free Trade Agreement (“NAFTA”), has serious implications for data privacy and usage for consumers in those countries and around the world according to Michael Geist in a Washington Post article.

Free trade agreements aim to increase the flow of trade and investment across borders and often restrict governments’ ability to regulate for social and environmental good. We are now seeing these agreements encourage free-flow of consumer data across borders as well, restricting governments’ ability to regulate to protect privacy.

The digital trade chapter of USMCA imposes rules that constrain privacy safeguards and impede the creation of much needed regulation in the digital world of Cambridge Analytica and other data-mining companies. It goes further than the Trans-Pacific Partnership (“TPP-11”), which has weak privacy protections.

Many countries have data localisation regulations, like those recently brought in by the European Union or the Canadian provinces of British Columbia and Nova Scotia. These require companies who obtain valuable personalised data about people online such as health records, to store that data securely within that jurisdiction to ensure there is adequate legal protection. USMCA provisions prohibits such laws about localisation regulation, and also prohibits governments limiting data flow between countries.

Geist argues that the USMCA digital provisions have potential to seriously erode current privacy standards and inhibit much-needed improvement in data security. There are implications for users in US, Mexico and Canada but also globally, as it will likely be used as a blueprint for future data provisions in trade agreements, including multilateral agreements through the World Trade Organization (involving almost every country worldwide).

Geist argues that before future agreements adopt these e-commerce and digital trade chapters of the TPP-11 and USMCA, there needs to be a drastic reworking to ensure governments can legislate for democratic, consumer-centred, safe and fair trade.