Column: NAFTA, Trump and Canada’s cultural exemption

Entertainment lawyer Lorraine P. D'Alessio examines what's at stake in the renegotiation of NAFTA and the precedent set by TPP11.

lorraine d'alessio headshotby Lorraine D’Alessio, Esq.

In recent months the Trump administration has graduated from threatening key allies with steep tariffs on key goods and products to actually implementing these tariffs. The U.S. president’s willingness to escalate trade tensions between key allies and the world’s top economic powers, including China, Canada, Mexico, and the European Union, signals an unrelenting desire to pursue high stakes promises of bolstering and prioritizing the U.S. work force, even if that means sacrificing a global balance, alienating longstanding trade partners, and calling into question the motivations behind renegotiating key trade agreements.

This direction and willingness to act first and think later, even despite clear dangers of inspiring trade wars on multiple fronts, has economists and trade experts trying to wrap their heads around how the Trump administration’s public stances could affect the private, ongoing renegotiations of key international trade deals.

Enter NAFTA and this week’s developments around its renegotiation. With Mexico and the United States recently signing a preliminary trade deal that could replace NAFTA after months of discussion, the ball is now in the Canadian government’s court as the country decides whether or not to come to the table by a Friday, Aug. 31 deadline with this latest agreement. This has created a new level of uncertainty across all industries in North America, but especially within the Canadian entertainment and cultural industries. (Ed note: As of the morning of Friday, Aug. 31, NAFTA negotiations were ongoing, with national media reporting that cultural protection provisions are a sticking point.)

We have previously discussed how NAFTA renegotiation and changes in North American immigration policy would negatively impact the entertainment industry. But the Trump administration’s focus on changing another key part of current NAFTA policy could prove to be an even more fatal blow to the Canadian cultural and entertainment industries and will be a central issue determining whether or not Canada will join Mexico and the United States in this latest trade deal.

NAFTA’s cultural exemption allows Canada to exclude certain cultural industries from free trade, exemptions that have bolstered Canada’s cultural identity and entertainment industry. The country has helped shape and support Canadian arts and entertainment through a number of government policies meant to prioritize Canadian entertainment and entertainers in an ever-increasingly international industry.

Canada outpaces a majority of the world in providing funding to Canadian content and entertainment producers, while enacting content policy that requires entertainment providers to guarantee Canadian programming to the public. The country additionally prioritizes Canadian content through various investment and copyright rules, while supporting artists and professionals in the industry through training and development, as well as public institutions like the CBC, Telefilm Canada, and the National Film Board. While these policies have proven to be crucial to the life of Canadian culture and entertainment, the Trump administration has taken issue with how these policies disagree with free trade in North America.

NAFTA’s cultural exemptions allows for Canada to maintain these policies that prioritize the industry and those responsible for its health and future. These cultural exemptions were not only enacted to protect the Canadian economy and industry, but also to also help preserve Canadian culture in an ever increasingly international media landscape.

Given that NAFTA and these exemptions were enacted in 1986, there are many corners of entertainment that have since taken on a more significant footing in entertainment in that time. For instance, the video game industry was not considered when these exemptions were put into place. If Canada were to support the video game industry, or other more modern forms of the culture and entertainment industries through cultural policymaking, NAFTA allows for the U.S. or Mexico to engage in retaliatory measures without the possibility of Canada challenging these actions.

So while members of the Trump administration have expressed a desire to eliminate NAFTA’s cultural exemptions, a move that would open the floodgates for American companies to have a stronger foothold across the border, many Canadian organizations have lobbied for the Canadian government to provide more protections to better support the Canadian entertainment and cultural industries, while encompassing more modern forms of entertainment that were not considered in 1986.

The Trump administration’s stubbornness on a number of trade and policy issues throughout the past year has the Canadian cultural and entertainment industries bracing for the worst. But there might be hope for Canada based on the new Trans-Pacific Partnership, one that notably does not include the United States.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which is commonly known as TPP11, remarkably expanded protections of digital material and web content, the first time that this has happened in a major free trade deal. For those in entertainment and media, this is a significant victory in that it expands protection for new forms of entertainment that NAFTA cultural exemptions currently do not currently cover. Overall, it’s a step in the right direction, and indicates the Canadian government’s understanding of the stakes at hand with NAFTA, and the need to protect Canadian interests by modernizing its definition of what falls into the box of entertainment and cultural industries

And while Canada’s victory in TPP111 negotiations bolster its chances of expanding protections in NAFTA renegotiations, the Trump administration’s willingness to throw out the rulebook when it comes to negotiations or policymaking still has the industry on edge. Until the result of these negotiations become public, and until Canada decides to come to the table in this latest trade deal between Mexico and the United States, Canadians in the cultural and entertainment industries will have their eyes on the government to set the pace in 2018 and beyond.

Lorraine D’Alessio is an immigration lawyer with D’Alessio Law Group, an L.A.-based firm with offices in Miami, San Jose, Toronto and London. She is a regular guest columnis with