By: Charles Fraser
On January 29, 2020, President Donald Trump signed into law the United States-Mexico-Canada Agreement (“USMCA”). This agreement modernized the North American Free Trade Agreement (“NAFTA”) and contains provisions that reflect changes in society, especially regarding technology.Moreover, the USMCA contains provisions in which the agreement mandates the three countries to create a legal framework for digital trade.Based on this new provision, the United States should create a uniform set of federal digital and data security privacy laws that would make it easier for businesses and consumers to easily adopt to.
Negotiations over the USMCA began in August of 2018 when it was simply known as the United States-Mexico Agreement. Canada joined the negotiations a month later to participate in the new trade agreement that would ultimately replace NAFTA. The agreement was ratified by all parties when Canada signed on March 13, 2020. Moreover, the USMCA contains digital trade provisions that protect cross-border digital trade.
Digital trade is defined as a trade of products and services that are digitally delivered through the use of the internet and internet-based methods.The USMCA digital trade provisions maintain transparent and effective measures that ensure American workers and businesses benefit from the new agreement’s promise for economic prosperity. For example, the USMCA guarantees enforceable consumer protections, addresses cybersecurity concerns, and ensures that digital data can be properly transferred across country borders. Moreover, the USMCA is guaranteed to cover almost all industries and excludes all government matters. The USMCA’s digital trade regulations are important for businesses and consumers because they protect privacy and streamline border data. Furthermore, the agreement requires the U.S., Mexico, and Canada) to develop a legal framework that would consider the guidelines of applicable international bodies and help protect the information of users of digital trade.The adoption of this legal framework presents to the world a high-trade quality agreement that will likely force other countries to follow suit.
As the USMCA calls upon the three countries to create a legal framework for digital trade, the U.S. should take steps to create a uniform set of digital and data privacy laws across all states. Currently, there are no standardized federal digital and data security laws.Businesses currently follow state rules which vary significantly.For example, in 2018 California implemented the California Consumer Privacy Act, giving California a wide range of new digital and data privacy laws.Based on the guidelines in USMCA’s digital trade provision, the United States must create a legal framework for digital and data security laws that adhere to the rules set out in the agreement. Congress should create a uniformed system of digital and data security laws throughout the country. Thus, businesses will not have to adhere to multiple sets of rules state and federal. A federal law will preempt the patchwork of state regulations and simplify compliance for businesses. This will help businesses acclimate to the USMCA framework and will ultimately set a standard for a uniform system of digital and data security laws that protects consumers and businesses.
Ana Swanson & Jim Tankersley, Trump Just Signed the U.S.M.C.A. Here’s What’s in the New NAFTA, N.Y. Times (Jan. 29, 2020), https://www.nytimes.com/2020/01/29/business/economy/usmca-deal.html.
USMCA, H.R. 5430, 116th Cong. (2019-2020).
See USMCA, art. 19.8, Can.-Mex.-U.S.
 Nathan Reiff, What is the USMCA, Investopedia(Jan. 30, 2020), https://www.investopedia.com/usmca-4582387.
Press Release, Office of the U.S. Trade Rep., Joint Statement from U.S. Trade Rep. Robert Lighthizer and Can. Foreign Affairs Minister Chyrstia Freeland, (Sept. 30, 2018), https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/september/joint-statement-united-states.
David Ljunggren, Canadian Parliament rushes through ratification of USMCA trade pact, Reuters(Mar. 13, 2020), https://www.reuters.com/article/us-usa-trade-usmca-canada/canadian-parliament-rushes-through-ratification-of-usmca-trade-pact-idUSKBN2102I5.
Howard Fienberg, President Signs USMCA into Law to Protect Digital Trade,Insights Association (Jan. 29, 2020), https://www.insightsassociation.org/article/president-signs-usmca-law-protect-digital-trade;see also Anupam Chandler, The Coming North American Digital Trade Zone,Council on Foreign Relations (Oct. 9, 2018), https://www.cfr.org/blog/coming-north-american-digital-trade-zone (writing that the USMCA contains impactful regulations on emerging tech with its digital economy provisions).
United States International Trade Commission, Digital Trade in the U.S. and Global Economies, Part 2, United States International Trade Commission 27 (Aug. 2014), https://www.usitc.gov/publications/332/pub4485.pdf.
SeeFeinberg, supra note 3(“The three countries recognized ‘the importance of adopting and maintaining transparent and effective measures to protect consumers from fraudulent or deceptive commercial activities….”).
See USMCA, art. 19, Can.-Mex.-U.S.; see alsoThe United States-Mexico-Canada Agreement Fact Sheet: Digital Trade, United States Trade Representative, https://ustr.gov/sites/default/files/files/Press/fs/USMCA/USMCA-Digital_Trade.pdf.
See NAFTA and the United States-Mexico-Canada Agreement (USMCA), Cong. Research Serv. 27 (Mar. 2, 2020), https://crsreports.congress.gov/product/pdf/R/R44981 (writing that one of the key provisions in the USMCA requires parties to the agreement to create a legal framework on privacy and online consumer protection and anti-spam laws).
See Logan Finucan, USMCA: What’s in the Digital Chapter for Your Company, Access Partnership (Jan. 29, 2020), https://www.accesspartnership.com/usmca-whats-in-the-digital-chapter-for-your-company/ (writing that the USCMA benefits businesses because it creates efficient intellectual property rights and allows the flow of border data while maintaining proper privacy laws).
See id. (quoting the USCMA’s provision that requires the three countries to create a legal framework for digital trade in order to protect consumers).
See Finucan, supra note 10 (stating that the USMCA shows the world an example of a high-trade quality agreement).
Carsten Rhod Gregersen, The US Is Leaving Data Privacy to the States — and That’s a Problem, Brink (Aug. 20, 2019), https://www.brinknews.com/the-us-is-leaving-data-privacy-to-the-states-and-thats-a-problem/.
See California Consumer Privacy Act of 2018 (“CCPA”), CAL. CIV. CODE § 1798.198(K)(2) (2018); see also Paul Bischoff, Internet Privacy Laws by State: which US states best protect privacy online?, Comparitech (Oct. 23, 2019), https://www.comparitech.com/blog/vpn-privacy/which-us-states-best-protect-online-privacy/ (ranking California as the state with the best digital privacy laws and Iowa as having one of the worst digital privacy laws).