Madison Grady, MPP Staff Writer, Brief Policy Perspectives

When President Bill Clinton signed the North America Free Trade Agreement (NAFTA) into law in 1993, the World Wide Web had just been placed in the public domain, the first web browser Mosaic 1.0 was released, and the iPhone was still 15 years away. The digital sphere was still new and foreign, and NAFTA had no provisions regulating how internet technologies would be defined or traded.

The U.S. International Trade Commission (ITC) broadly defines digital trade as “U.S. domestic commerce and international trade in which the Internet and Internet-based technologies play a particularly significant role in ordering, producing, or delivering products and services.” In other words, digital trade is a broad concept, capturing not only the sale of products and services on the Internet, but also the movement of data online, cloud computing, the Internet of Things (IoT), and additive manufacturing. However, the definition of digital trade keeps evolving as countries continue to experiment with different approaches and policies governing digital trade.

The renegotiation of NAFTA, now known as the United States-Mexico-Canada Agreement (USMCA), attempts to wrestle with a wide variety of trade issues. Most of the public has focused on what a new trade agreement means for farmers, ranchers, and business owners, but digital trade provisions have been left out of the main discussion. The USMCA attempts to bring North American trade agreements into the 21st century by including a chapter on digital trade under Article 19.

In the U.S., section 230 of the Communications Decency Act sets up two main provisions for how to deal with online platforms such as Facebook, Twitter, and Google, and the content published on those sites by users. First, online platforms cannot be held liable for content published by their users. Second, platforms are allowed to restrict certain content “in good faith” and censorship of posts and comments is left up to the discretion of the platform itself. Overall, section 230 has one goal: to free web-based companies from the responsibilities of traditional publishers. The courts have taken a broad understanding of section 230 since it was enacted into law and have generally ruled that platforms are allowed limited censorship over their content. However, platforms are typically are not liable if they don’t censor certain things.

Article 19.17 of the USMCA includes all relevant points of current U.S. law under section 230 and leaves out outdated and irrelevant provisions that are not applicable today. However, the agreement removes seven specific words that were included in the original Section 230 ‘Good Samaritan’ provision, giving technology firms stronger statutory rights to censor content they find “objectionable.” Additionally, the USMCA requires each country to establish personal protection laws, but the enforcement of these laws is left up to the country. Personal information protection laws help safeguard users data and security. While Article 19 of the USMCA does not set mandatory minimum requirements for protection laws, it is still a better approach than other trade agreements that neglect this issue altogether.

The Electronic Frontier Foundation refers to section 230 as “the most valuable tools for protecting freedom of expression and innovation on the Internet.” Much of Silicon Valley and some libertarian groups want Article 19.17 to remain in the USMCA. Under the new agreement, major tech firms and platforms believe that if they were to lose the protection of section 230 and now Article 19.17, the default would be to censor all kinds of speech.

However, many members of Congress on both sides of the aisle, as well as some in the White House, who are against section 230 do not want Article 19.17 included to the new trade agreement. Sen. Josh Hawley has repeatedly referred to section 230 as a “sweetheart deal between big government and big tech,” and other proponents argue it eliminates tech companies’ responsibility to moderate content on their platforms.

This new digital trade provision in the USMCA represents the strongest chapter on digital trade ever seen in a trade agreement. While the article also embraces online consumer protection, data privacy, internet access, and cybersecurity, internet immunity remains its most controversial idea. Article 19 would require the biggest tech firms in each of the three countries to abide by the current internet immunity provisions set up in the United States. This means the U.S. Congress has a unique opportunity to establish global rules and norms of digital trade for decades to come, and further advance U.S. interests.

Canada already has case law surrounding this issue, while Mexico has few, if any, laws on the subject. Article 19 gives Mexico three years to comply with the requirements it lays out, meaning the country would most likely have to enact new legislation to meet the legal standard in USMCA. This could open many doors for new Mexican innovation companies and bring more jobs to the country.

The USMCA still has to be ratified by the U.S. Congress, Canada, and Mexico. There is pushback on the agreement from both sides of the aisle in the U.S., and one of the major hurdles is Article 19. Despite its opposition, Article 19.17 is a significant step forward for internet-based trade. Depending on its success, it could become the norm in other trade agreements around the world.