Continuing Generations of Unfair “Fair Trade Deals” Between the USA and Latin America
Earlier this month, Mexico’s Congress hastily imported most of the US copyright system into Mexican law, in a dangerous and ill-considered act. But neither this action nor its consequences occurred in a vacuum: rather, it was a consequence of Donald Trump’s US-Mexico-Canada Agreement (USMCA), the successor to NAFTA.
Trade agreements are billed as creating level playing fields between nations to their mutual benefit. But decades of careful scholarship show that poorer nations typically come off worse through these agreements, even when they are subjected to the same rules, because the same rules don’t have the same effect on different countries. Besides that, Mexico has now adopted worse rules than its trade partners.
To understand how this works, we need only look to the history of the USA’s relationship with the copyrights and patents of foreign persons and firms. When the USA was a new, poor, developing nation that imported more copyrights and patents than it exported it did not honor foreigners’ copyrights or patents, but rather allowed its people and its businesses to use them without paying, to develop the nation. Once the USA became an industrial and cultural powerhouse, it entered into agreements with other countries for mutual recognition of one another’s copyrights and patents in order to extract wealth based on rights to its technology and culture.
But the USA has a short memory for what it once considered just; it has made the foreign enforcement of US copyrights a trade priority for decades, often demanding that its trading partners extend more legal privileges to US copyright holders than they (or anyone else) receive at home in the United States; and preventing local users from benefiting from fair use or other balancing rights available in the United States. The poorer the trading partner, the more the US government and US industry expect it to surrender.
Mexico’s copyright is a sad and enervating example of this principle in action. The law imposes restrictions that do not — and could not — exist under US law, because they violate US Constitutional principles (these laws also violate Mexican Constitutional principles).
For example, Mexico’s copyright law effectively mandates copyright filters, which automatically screen Mexican Internet users’ expressive speech and arbitrarily censor some of it based on an algorithm’s decision to treat it as a copyright infringement.
Neither the US nor Canada has such a requirement, which puts Mexican online firms at a significant trade disadvantage relative to its “equal partners” under USMCA. These filters can be very costly to develop and maintain. For example, YouTube has invested over $100,000,000 to develop its content filtering systems. Those are costs that Mexican online services will have to shoulder if they compete with Canadian and US firms, while their counterparts in the USA and Canada face no such requirement.
Just as dangerous to Mexico’s prosperity are its new rules on TPMs (including “Digital Rights Management” or DRM). The US version of these rules, Section 1201 of the Digital Millennium Copyright Act (DMCA 1201), sets out a procedure for granting exemptions to the ban on bypassing digital locks. The Mexican version holds out the possibility of creating such a process but does not describe it.
Even if the Mexican government eventually develops an equivalent procedure, people and businesses in the USA will still enjoy more flexibility than their Mexican counterparts: that’s because the US system has produced a long, extensive list of exemptions that Mexico will have to develop on its own, through whatever process it eventually creates (if it ever does).
These rules interfere with many key activities, including accessibility adaptations for people with disabilities, education, and repair, including repair of agricultural and medical equipment, most of which come from US firms, who can charge Mexican consumers and the Mexican health-care system arbitrarily high prices for repairs, without having to fear competition from Mexican repair shops. They can also unilaterally declare equipment to be “beyond repair” and insist that it be replaced at full cost.
All of this happened even as the US government is facing a legal challenge to its ban on circumventing access controls that might see the law struck down in the USA, but still in force in Mexico.
Mexico’s new copyright law also includes a much narrower set of limitations and exceptions than either the US (“fair use”) or Canadian (“fair dealing”) systems provide for. That means that Mexican consumers must pay US and Canadian firms for activities that people in the USA and Canada can undertake for free.
This is especially dangerous when coupled with Mexico’s new Notice and Takedown system, which allows anyone to have content removed from the Internet simply by claiming to be the victim of copyright infringement. Under the US system, companies that do not act on these notices are only penalized if they actually commit indirect copyright infringement. But Mexico’s version of these rules (Article 232 Quinquies (II)) forces compliance with a copyright owner’s takedown demands even if the platform believes the content is a noninfringing use.
That means that US firms and individuals can remove material — for example, negative reviews quoting a book or warnings about defective software — from Mexican online services, while such a tactic could be ignored by US online services.
This asymmetry is not new. It is a recurring feature of US-Mexico trade relations, something that was already present under NAFTA, but which USMCA expands to the digital realm through this outrageous copyright law.
Under NAFTA, US exports of corn syrup to Mexico surged, and Mexican anti-obesity campaigners who tried to stem the tide were rebuffed by the rules of the trade agreement.
As a result, Mexico’s obesity epidemic is among the worst in the region, as is Mexican consumption of processed food. Julio Berdegué, a regional representative of the Food and Agriculture Organization of the United Nations, said “Unfortunately, Mexico is one of the leading countries in obesity, both in men and women and children. It is a very serious problem.” Mexico’s export sector has also shifted, with much of the fresh fruits and vegetables that once made up the country’s dietary staples now being exported to the USA.
Mexico’s new copyright law only exacerbates this problem. Mexico’s TPM rules hamper the security research that is the country’s best hope to secure its people’s digital devices. During Mexico’s “sugar wars,” activists were hacked with weapons sold by the cyber-arms dealer NSO Group, as part of an illegal campaign to neutralize their opposition to the powerful US sugar industry. That attack exploited a vulnerability in the activists’ mobile apps, and Mexico’s new copyright law impedes the work of those who would reveal those vulnerabilities.
The history of Latin America is filled with shameful instances of US interference to improve its prosperity at the expense of its southern neighbors.
The passage of the Mexican copyright law, rushed through in the middle of the pandemic without adequate consultation or debate, continues this denial of dignity and sovereignty. Lobbyists for just laws don’t fear public scrutiny, after all. The only reason to undertake a lawmaking exercise like this under the shroud of haste and obscurity is to sneak it through before the public knows what’s going on and can organize in opposition to it.