USMCA Takes Another Step Forward in 25-3 Senate Committee Vote

The United States Senate Finance Committee today considered the U.S.-Mexico-Canada Agreement (USMCA) in an Open Executive Session and voted 25 to 3 to move the bill forward.

The USMCA enjoys wide bipartisan support, but Senators Pat Toomey (R-PA), Bill Cassidy (R-LA) and Sheldon Whitehouse (D-RI) voted against the bill. Toomey and Cassidy objected largely to process issues, as the Committee was not allowed to present amendments under a fast-track process, while Whitehouse was critical of the agreement’s lack of urgency on climate change.

President Donald Trump and House Speaker Nancy Pelosi reached agreement on the USMCA, which would, if ratified, replace the North American Free Trade Agreement (NAFTA), on December 10. Notably for the IP community, the new version struck down provisions that would have expanded regulatory data protection for biologics inventions from five years in Mexico and eight years in Canada to 10 years in both countries.

“The decision to remove key intellectual property protections was based on the false assumption that these provisions would raise U.S. drug prices,” said IPWatchdog CEO and Founder Gene Quinn in December. “Exclusive rights, whether in the form of data exclusivity or patent rights, do not raise drug prices. The belief to the contrary is a frequently held misconception that simply ignores the many years of research and development and the extraordinary financial investment required to innovate in the pharmaceutical and biologics areas,” he added.

Senator Toomey said during today’s hearing that “the removal of IP protections for biologics takes us backwards.” Senator Bob Menendez (D-NJ) said that he is “disappointed that the USMCA lacks strong IP protections that promote innovative jobs in NJ and across the country,” despite his overall support for the bill.

Other IP-related concerns with the present version of the bill include the safe harbor language for internet intermediaries. “I have serious concerns with the safe harbor language modeled on Section 230 of the Communications Decency Act,” said Senator Mark Warner (D-VA). “Congress is beginning an important bipartisan debate about whether Section 230 is working as intended, and many believe it has allowed internet intermediaries to ignore misuse of their platforms by bad actors.”

Section 230 of the Communications Decency Act says in part that “no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

Article 20.88 of the USMCA says that “An Internet Service Provider that removes or disables access to material in good faith under subparagraph (a) shall be exempt from any liability for having done so, provided that it takes reasonable steps in advance or promptly after to notify the person whose material is  removed or disabled.”

Some have called this “a major lobbying victory for Google.”

In his opening statement, Senate Finance Committee Chairman Chuck Grassley (R-IA) said that he is confident the agreement will reach President Donald Trump’s desk and that it will bring “much-needed certainty to America’s farmers workers and businesses.”

Committee Ranking Member Ron Wyden (D-OR) noted that the USMCA includes strong protections on technology and digital trade, particularly for small businesses. “The new NAFTA will fight back against trade cheats who want to eat the seed corn of American innovation. It will do more to protect our intellectual property and prevent American companies from being shaken down for their data. By including established U.S. law, it will help guarantee that small tech entrepreneurs have a shot at building successful companies in a field now dominated by a few goliaths.”

According to reports, Grassley commented to the press following the hearing that a vote on the USMCA by the full Senate could be delayed by a month due to the pending impeachment trial.

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