The Centre for Canadian Innovation and Competitiveness (ITIF) comments on the potential Canada-European Union Digital Trade Agreement (DTA), emphasizing the need for Canada to approach negotiations cautiously. ITIF argues that aligning with the EU's digital sovereignty agenda could hinder Canada's digital economy and industries while increasing compliance costs without boosting competitiveness. The EU's General Data Protection Regulation (GDPR) and Digital Markets Act (DMA) are cited as examples of policies that restrict innovation in favor of compliance.
Key principles for Canada's DTA negotiation:
- Prioritize innovation and interoperability by favoring international, industry-led standards and outcome-based approaches.
- Reject adopting EU policies that lock in regulatory models and limit future options for governing AI, data, or digital platforms.
- Align with CPTPP and DEPA norms by embracing cross-border e-commerce and data flows without the EU's precautionary-first governance approach.
- Reject low-benefit, high-cost provisions that burden Canadian innovators without offering clear commercial upside.
- Design for modularity and adaptability by structuring the agreement to evolve with technology.
Specific recommendations:
- Data protection: Maintain Canada's Personal Information Protection and Electronic Documents Act (PIPEDA) framework for cross-border data movement, rejecting EU-style restrictions like adequacy determinations.
- Intellectual property: Avoid expanding carve-outs for source code disclosure, which could create de facto backdoors for forced disclosure.
- Artificial intelligence: Adopt a flexible approach, limiting cooperation to risk-based oversight and post-deployment monitoring, and referencing international standards.
- Antitrust enforcement: Focus on exchanging information and expertise, and emulating CPTPP's consumer protection laws, avoiding automatic targeting of large firms.
- Interoperability: Promote industry-led approaches using international standards, recognizing functionally equivalent implementations.
- Consumer protection: Engage in voluntary commitments focused on outcomes, not soft-law precursors to binding obligations.
- Open government data: Publish common API patterns and reliability benchmarks for priority datasets, avoiding content controls and licensing carve-outs.
- Counterfeits: Focus on fast enforcement and effective traceability systems, such as seller verification and information-sharing with rights holders.
- Cybersecurity: Promote operational cooperation on threat intelligence, botnet disruption, and R&D on secure tools, avoiding rigid certification mandates.
ITIF concludes that Canada should safeguard its ability to regulate technologies in a way that supports competitiveness, innovation, and growth, rather than substituting EU dominance for U.S. influence.
