Constitutional Issues Complicate the Trans-Pacific Partnership

par | by Jeremy de Beer

As the law stands today, an international treaty can’t give the federal government power to change the constitutional division of powers.

The negotiating phase of the Trans-Pacific Partnership is over. Trade ministers from a dozen countries, representing nearly 40 percent of the global economy, announced the deal in Atlanta in early October. Negotiations took over 5 years, required concessions from everyone and fuelled public controversy.

During negotiations, only select industry insiders were privy to secretive information about negotiations, while the rest of us relied on leaks. With the text finally released, the public has only just begun to grapple with the agreement’s complexities.

And now comes the hard part: implementation within the domestic constitutional constraints of TPP member states. In a country like Canada, the federal government may lack the power to live up to every promise put into an international agreement. Constitutional concerns are especially apparent in areas related to technology law and policy, which are among TPP’s most controversial parts.

While the federal government has the power to negotiate treaties, and Parliament the obligation to review them, putting an agreement into legal effect may — under the division of constitutional powers — require action from Canada’s 10 provinces.

This was a major issue complicating Canada’s negotiations toward the Canada-European Union Comprehensive Economic and Trade Agreement, CETA. Knowing Canada’s federal government may be constitutionally unable to deliver on its obligations, the EU insisted that provincial representatives be at the negotiating table and agree to any deal. Canada’s provinces weren’t involved the same way in TPP negotiations, even though many similar issues were being discussed.

I explained the challenges of implementing international trade agreements in federal systems in a recent issue of the journal, Legal Issues of Economic Integration. Much of my CETA-centred analysis there is also applicable to the TPP.

The TPP reflects the clear trend in international trade agreements to reach further “beyond the border” into the domestic affairs of signatories. International trade is no longer about tariff-reduction. In the field of technology law and policy, agreements like the TPP are likely to impact industries from biotechnology to telecommunications. In addition to provisions on environmental issues and electronic commerce, some of TPP’s furthest-reaching requirements may be found in its chapter on intellectual property (IP) rights.

According to the summary from the US Trade Representative’s office, the IP chapter “covers patents, trademarks, copyrights, industrial designs, geographical indications, trade secrets, other forms of intellectual property, and enforcement of intellectual property rights, as well as areas in which Parties agree to cooperate.” The summary continues, “In particular, TPP Parties will provide the legal means to prevent the misappropriation of trade secrets, and establish criminal procedures and penalties for trade secret theft …”

Of all those matters, only copyrights and patents are mentioned in Canada’s constitution as within federal jurisdiction. Serious constitutional questions could impact Canada’s implementation of provisions pertaining to other matters like regulations covering data about new drugs; trade secrets and unfair competition regulations; geographic indications for marketing foods, beverages and other goods; and protection for digital rights management information. Some of these issues are highlighted in my published analyses of IP issues in CETA, how federalism impacts biomedical innovation and constitutional jurisdiction over “paracopyrights.”

In what has long been considered the touchstone case concerning treaty implementation in Canada, the Labour Conventions case, federal laws addressing a variety of labour issues were held unconstitutional because they dealt with provincial matters.

According to Lord Atkin, “the Dominion cannot merely by making promises to foreign countries clothe itself with legislative authority inconsistent with the constitution which gave it birth.”

Surprisingly, in the seventy-five years since this decision, the Supreme Court of Canada has not squarely confronted the issue of federal and provincial powers to domestically implement international law.

The Court skirted around the issue in an important case about trademark legislation, MacDonald v. Vapor Canada, which unanimously struck down a broad provision generally prohibiting unfair competition. Such matters are not within the jurisdiction of the federal government, but rather fall within the provinces’ power over property and civil rights. Former Chief Justice Laskin said the issue might be different had Parliament said it was implementing the Paris Convention on industrial property. But that wasn’t the case.

Most scholars do suggest a need to revise the rule from Labour Conventions on account of modern global economic realities. Former Supreme Court of Canada Justice La Forest, writing as a law professor prior to his judicial appointment, suggested we recognize that some matters ordinarily reserved to the provinces have an international dimension that requires federally coordinated action.

Justice La Forest also argued that the Parliament should have a stronger claim to implement trade agreements as a whole, compared to piecemeal provisions addressing matters otherwise falling within provincial jurisdiction. Implementation via omnibus legislation is how Parliament has implemented provisions from NAFTA, the WTO and a number of other bilateral trade agreements. My colleague at uOttawa, Debra Steger, has explained that this is the most constitutionally defensible approach. But it is not unassailable. As the law stands today, an international treaty can’t give the federal government power to change the constitutional division of powers.

In conclusion, there is a very practical point worth highlighting. Historical experience proves it is not always, or even normally, the provinces that bring constitutional challenges. Very often private parties raise the constitutional division of powers in a collateral attack on laws and policies enacted by one level of government or another that are unfavourable to their special interests. Private parties realize that if, for example, the federal government’s law is invalidated or read down, provincial governments are unlikely to address the matter individually, or if they do, there might be delay or perhaps a more favourable outcome for the specific litigant.

It should not be surprising, therefore, when opponents of the TPP who failed to halt negotiations turn to “plan B” and raise these kinds of constitutional issues around implementation.

Jeremy de Beer is a Full Professor and founding member of uOttawa’s Centre for Law, Technology and Society. He has written extensively on the intersections among technology, intellectual property and international trade, including work on intellectual property issues in CETA and best practices for dealing with intellectual property in international trade agreements. Visit his website or follow him on Twitter @jdebeer.