A worrying sign of tech blindness as USMCA talks approach

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Among the former politicians and CEOs of a mining giant, a paper company, a steel company, a potash producer, a railway, a bank, and lobby groups for small business and the auto and aluminum sectors, there was a glaring omission: experts from the tech sector.

The 24 people on the Advisory Committee on Canada-U.S. Economic Relations announced by Prime Minister Mark Carney this week are supposed to offer ”expertise and strategy” ahead of this year’s review of the United States-Mexico-Canada Agreement on trade.

It’s an old-school roster, and to some it will seem fitting for the times. U.S. President Donald Trump’s tariffs are intentionally designed to close Canadian auto-assembly plants and have already led to steelworkers being laid off.

But it is not a group with the expertise to suggest a strategy on a major aspect of Canada’s trade relations with the United States: technology, and particularly the rules for intellectual property, the flow of data, and artificial intelligence.

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Jim Balsillie, the former co-chief executive of Research in Motion, a.k.a. Blackberry, said he thinks the technology sector omission in the advisory council is a symptom of the Canadian government’s tech blindness in its trade strategy.

“If you don’t pay attention to that, your prosperity and security erode,” Mr. Balsillie said in a telephone interview. Mr. Carney’s approaches to trade, he argued, “have been entirely 19th- and 20th-century.”

“When are we going to put 21st-century prosperity- and security-drivers into our approaches?”

Assuming that such issues can wait, or that the USMCA review can only be about saving the furniture in Canada’s threatened industrial sectors, is dangerous. The Americans care.

The first prerequisite that Mr. Trump demanded for any trade negotiations, last summer, was that Mr. Carney cancel Canada’s plans for a digital-services tax.

The Prime Minister has promised to build sovereign data and sovereign compute – the capacity to keep the storage and processing of large amounts of data under the jurisdiction and control of Canada – but U.S. Trade Representative Jamieson Greer has listed that as a trade irritant to be dealt with in the USMCA review.

Artificial Intelligence Minister Evan Solomon has indicated he will unveil an AI strategy and recently said it will be based on “sovereign AI and Canadian AI,” with responsible guardrails. But the existing USMCA has rules preventing restrictions on the cross-border flow of data, or requiring businesses to locate “computing facilities” in your country, or requiring companies to provide access to source code or algorithms for their services.

Presumably, the trade strategy for the USMCA review should be built with people who have a grasp of the implications. Canadian negotiators are capable and can ask experts for advice. But Mr. Greer gets input from permanent advisory committees, including one on the digital economy that includes representatives from Google and Apple, for example.

Gabriel Brunet, a spokesperson for Dominic LeBlanc, the minister responsible for Canada-U.S. trade, said in an e-mail that the government established “a number of mechanisms” to consult industry and others, and the new advisory committee “includes representatives from all backgrounds.” But he didn’t address the question that was posed about tech input for the review. Mr. Balsillie has long argued that the U.S. took Canada to the cleaners in the talks that replaced the North American free-trade-agreement with the USMCA in Mr. Trump’s first term.

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In his view, the Canadian side focused on averting the loss of market access for goods and, in the meantime, let the U.S. dictate a set of digital-economy rules that restrict Canada’s ability to preserve its intellectual property and set its own data policies.

“They basically are saying [to Canada], you can’t tax digital services. You cannot do sovereign compute. You have to do our standards. You cannot do procurement,” Mr. Balsillie said.

That’s not a minor matter. Technology is the biggest driver of economic growth. A Statistics Canada study released last year found that Canadian underinvestment in “intangible assets,” such as data and the country’s stock of intellectual property, is a major reason why Canada’s labour-force productivity has trailed that of the U.S.

One of the biggest reasons that Canada’s standard of living has lagged that of the U.S. this century is that the American economy has been propelled by its larger tech sector.

“USMCA was a home run for Silicon Valley, and that divergence of Canada and U.S. [economies] accelerated with that home run, and now we’re going in blind again,” Mr. Balsillie said.