For many in the United States, a renegotiated North American Free Trade Agreement makes a lot of sense. The original agreement, dating back to the Clinton administration, was a predecessor to the emergence of the digital economy. The negotiations presented both hopeful opportunity and risks for various stakeholders, including internet companies, consumers and big business. Unfortunately, too often consumer interests are ignored as a relevant stakeholder in trade negotiations. Negotiations can take on an almost-transactional nature as the U.S. Trade Representative focuses on business rather than the larger and most important stakeholder: the broader U.S. public interest. With the new U.S.-Mexico-Canada Agreement to update NAFTA announced earlier this month, both the hopes and fears may have been realized. No area epitomizes this more than the agreement’s copyright provisions.
The USMCA’s safe harbor provisions recognize the importance of internet intermediary platforms to the overall U.S. economy, as well as the value these platforms provide to consumers. The safe harbor provisions safeguard thousands of American jobs and billions in annual investment. They enable U.S. consumers and creators to share and consume millions of new creative works without their host being fearful of economic ruin because of liability for user-generated content. Based on Section 512 of the Digital Millennium Copyright Act, these provisions enshrine a key part of U.S. copyright law that helps to balance our system to the benefit of the digital economy and consumers.
But safe harbors are only a part of the balanced framework that makes the U.S. copyright system work. By stopping short of explicitly guaranteeing fair use, the agreement misses a key provision that makes the U.S. copyright system function. This failure only serves to stoke the fears held by many in the user and consumer community that negotiators would take a transactional approach to secure the broadest corporate support, at the expense of other stakeholders.
Fair use is a key part of U.S. copyright law. In its simplest terms, it allows for use of small parts to the entirety of copyrighted works without prior permission of the rights holder because these are beneficial uses. When a teacher shows a video to a classroom, that is fair use. When a movie is reviewed and a clip is shown, that is fair use. When internet search results are displayed or a coder uses pre-existing code to develop a cybersecurity patch, that is also fair use.
Our nation’s fair use economy is huge. A 2017 report on the economic contribution of fair use industries found that these industries account for 16 percent of the U.S. economy and generate $5.6 trillion in annual revenue. Additionally, another 2017 study released by Re:Create found that nearly 15 million independent, American creators representing all 50 states earned a baseline of almost $6 billion from posting their music, videos, art, crafts and other works to fair use enabled online platforms in 2016. Software development, cybersecurity and the internet are dependent on fair use, as are cutting edge technologies like artificial intelligence and autonomous vehicles. Since the fair use industry employs 18 million U.S. workers and allows 15 million more people to make money online, the failure to include robust fair use in this latest trade agreement is an economic failure.
Fair use is also integral to our nation’s culture and values. It embodies First Amendment protections that are critical for creators and innovators as well as consumers and members of the general public who post to social media platforms, use search engines, teach, study at a library, or sit in a lecture hall.
Given the important role fair use plays in our economy, culture and society, how can this trade deal only include a very weak provision on fair use that does nothing to protect all these interests? While the economic value of America’s fair use industry is significant today, it is only getting larger with each day that passes and new innovation brought to market. To better serve the public interest and avoid placing millions of jobs and billions in revenues and innovations at risk, we need the USTR to place a higher priority on reflecting America’s legal standards.
Joshua Lamel is the executive director of the Re:Create Coalition.
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