The Deal of the Century: An Interview with Ed Fast, Former Canadian Trade Minister - Part 2

Edward D. Fast is a Member of Parliament, former Trade Minister, and Canada’s representative throughout much of the Trans-Pacific Partnership negotiations. This is part 2 of the interview, in which we discuss specifics of the agreement, particularly issues in IP. Part 1 can be found here.

John: So on the topic of patents, the initial US proposal for data exclusivity period (which gives researchers a monopoly on their work) was 12 years It has since been brought down to 8. I’ve heard that it was Canada that helped bring this about. Is this true?

Ed: Yes. Canada is a kinder, gentler nation. We come to negotiations with a better appreciation for flexibility and asymmetrical outcome in bilateral and interregional negotiations. People understand that Canada plays a very valuable role in the TPP regional negotiations by being a trusted party that the less developed country could come to, to try to arrive at outcomes that represent a common denominator.

That required the less mature economies to scale up in terms of IP protection, but that also required the United States to come down from it’s high perch, and accept something lesser than they would have ideally wanted.

Canada played a very significant role in brokering that, and coming up with outcomes that everyone can live with.

 

J: One of biggest criticisms of the data exclusivity period is that it will seriously raise the price of potentially life-saving drugs. How do you respond to that?

We have to understand the other side of the equation. The reason we have these world leading medicines and cutting-edge technologies that can now be deployed to address certain serious diseases, is because countries like Canada, the United States, and those in the European Union actually had strong intellectual property protection. That provided incentives for the brand-name companies to actually develop medicines that really are cutting edge.

It’s always about finding the appropriate balance, between providing an incentive to making billions of dollars of investment required to come up with leading edge solutions to healthcare challenges, and on the other side, making sure that we can get these medicines to Canadians and the rest of the world in an affordable manner.

 

J: And do you think such a balance has been struck with the current iteration of the Trans-Pacific Partnership?

E: Where the balance lies is never quite clear. That is where the debate takes place.

 

J: In 2007, Canada temporarily suspended IP rights in order to provide Rwanda with life-saving AIDS medicine. It was the first time ever that a country has done something like that. Has our capacity to do so changed with the implementation of the TPP?

E: Canada’s ability to do that has not changed. But there has been very little success in getting generic products to countries that cannot afford these medicines. We do have provisions to allow that to happen. Canada has done it. But it has not done it often.

The challenge is this: the more you open up those opportunities, the more you open up opportunities to game the system. It’s been happening all over the world. Whenever there is any opportunity to exploit weaknesses in the system, people do.

But to answer your question: no, Canada’s ability to help developing nations, in the case of an emergency, has not been diminished.

 

J: Moving on the issue of copyright, one of the big changes is that there will be an extension on the term of copyright for 20 years after the creator’s death (bringing it to a total of 70). Some have cited this as an example of a concession we have made to appease the US, which is by far the largest producer of copyrighted material. Do you see this having a big impact?

E: No. Which is why we agreed to increase our copyright terms by 20 years. I think it should be kept in mind that we secured some real concessions in the TTP as well, in terms of copyright.

Because the standard that the TTP partners established before for internet probity was a notice and takedown provision. If someone posts something on the internet, and someone says “listen you’re violating our intellectual property rights”, the US system, which was proposed in the TPP, says “provide notice to the ISP (Internet Service Provider), and they have to take it down”. This is before the plaintiff has even made their case in court. That is called notice and takedown.

In Canada, the debate lasted well over a decade. I was on the committee that studied copyright, and we had decided that in Canada’s national interest to not go with notice and takedown, but to go with notice and notice provision. So when someone posts something on the internet, and someone else complains about whether they had the rights to post it, the complainant can provide notice to the ISP. However it is up to the complainant to go to court and get the injunctive relief it needs to get the ISP to actually remove that material from the internet.

So this is a clear distinction, and under it (the notice and notice regime), we felt that our system still protected IP. It put the onus on the complainant to make case in court before the offending material was removed. Where in the United States and elsewhere you can submit a notice, and the ISP, without there having been any consideration, has to remove the material.

So it’s where the onus lies: is it on the offender, or the complainant? Canada says listen it is the complainant that has to make its case in court before the material has to be removed by the ISP. We were able to secure Canada’s position, and our position was grandfathered in the TPP. So when we look at adding another 20 years to copyright protection, we felt that this was something that we could easily do in the national interest.

 

J: While we are on the topic, what are some other successes that Canada has achieved in the TPP negotiations?

E: Some of the biggest proponents of TPP in Canada are industries like agriculture and forestry. Through the agreement, they’ve been better access to markets like Japan.

We’ve also done something quintessentially Canadian. We have a system in place in Canada that is is an anomaly, and that is supply management. We have free trade with the rest of the world in virtually every commodity except chicken, eggs, hatching eggs, turkeys, and dairy. Back in the 1960s, under Trudeau, Canada implemented the system which is effectively a national monopoly. Effectively we do not allow countries from around the world to export into our country any product under those 5 categories.

Now there are small amounts that we do allow under the WTO (World Trade Organization) rules. And our negotiations with the EU provided extra room for the EU to export cheeses into Canada. The TPP provides some extra room for the Americans and New Zealand to export products like dairy and other commodities into our market, but in very small quantities.

There are many people who had hoped that supply management will be dismantled under TPP. That did not happen. We believe that will be horrifically expensive for Canadian taxpayers because the investments that has gone into supply management totals to approximately $45 billion dollars. If you dismantle that system, someone has to pay that $45 billion dollars. That is the taxpayers.

 

J: Going back to the topic of IP, are there any other concession grounds that we really fought for?

E: It’s not a matter of fighting hard for. It’s about preserving Canada’s existing system of IP protection and we did that. Because, remember, many of the countries that a part of TPP had IP protection standards that were much much lower than Canada’s, such as Peru and Chile. And they are being forced to coming up to a much higher standard. We’ve basically been able to maintain our standard, what we already had in place.
The most significant shift in the standard actually did not happen under the place of TPP but happened in negotiations with EU.

 

J: I should probably dig in EU then.

E: Yes, definitely. The surprising thing is that a lot of naysayers in the IP side didn’t have much to say about what was happening in the EU negotiations. They accepted it was an outcome that was in Canada’s interest. But in the TPP, there’s somehow, there’s a really small number that has been very outspoken.

 

J: Yes, I have noticed that. Prominent amongst these naysayers is Jim Balsillie, former-CEO of BlackBerry. He recently wrote an article calling the TPP the “worst deal ever”. What do you say to that?

E: Yes. Jim Balsillie has been very outspoken. We have to understand that Jim Balsillie has a very narrow interest that he is promoting. He has a history with trying to compete with the United States. His company made a decision to compete in the consumer handset market, which was not a core strength of BlackBerry, and it ended up being a disaster. So obviously Jim Balsillie does not have a favourable take on doing business with the United States. This doesn’t make the TPP bad.

He has a very narrow interest … which reflects a bit of a chip on his shoulder. I don’t think that should be reflected with what is happening in IP with the TPP.

 

J: I see. Thank you very much for your time Ed. These are some great insights you’ve shared.

E: No problem John. All the best.

 

John C.H. Wu is an IPilogue editor and a JD/MBA Candidate at Osgoode Hall Law School and the Schulich School of Business.

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