A columnist decided to take a crack as to why the US won’t issue trade retaliation against Canada over Bill C-11 and C-18. It was pathetic.
Let’s face it, the US issuing trade tariffs over Bill C-11 and bill C-18 is not a matter of “if”, but “when”. Already, the US ambassador to Canada has already issued not 1, not 2, not 3, but 4 warnings against Canada over Bill C-11 and Bill C-18. US Senators, in a bi-partisan letter, called on the USTR to take appropriate measures against Canada. The CCIA issued white papers for both Bill C-11 and Bill C-18 explaining why they are violations of the USMCA. Last week was the biggest sign yet that this was going to happen thanks to the US establishing a dispute panel against Canada over one of their aforementioned grievances.
For supporters of both of these pieces of legislation, this represents one of the biggest threats to their efforts to have a government enforced monopoly in their respective industries, legally making it impossible for other players to really compete – and that’s the best case scenario. So, what is the arguments against a massive trade battle? Up until today, we haven’t really heard any. That changed when we found out that someone by the name of Hugh Stephens was stupid enough to take on such a gauntlet. The results? Hilarious to the point of making you wonder why he thought it was worth making a mockery of himself to even navigate this gauntlet.
Stephens wrote his rebuttal in an op-ed in the National Post. He gets out of the gate early by conducting a major faceplant when he inadvertently mentioned the whole reason why these trade frictions are happening in the first place:
The Bill is modelled on similar legislation passed in Australia that succeeded in bringing the two major digital platforms together with most of that country’s news media players, both large and small, to reach compensation deals. While not named in C-18, Google and Facebook are the most likely immediate targets of the legislation — but not because they are U.S. companies but because of their size and market dominance.
Obviously, this is one of the big reasons why these trade friction points are being made in the first place. These are laws that are discriminating against US businesses.
Stephens then acknowledged the events that unfolded that brought us to the brink of a massive trade war. He then said that he disagreed with the following reasoning:
In recent weeks, the U.S. digital giants have enlisted the support of the U.S. Trade Representative’s Office in raising their concerns over the bill and have even managed to get the powerful U.S. Senate Finance Committee to include C-18 in its laundry list of trade complaints against Canada and Mexico in a recent letter to U.S Trade Representative Katherine Tai. Last fall, their industry association, the Computer & Communications Industry Association (CCIA) produced an amusing White Paper comparing the role of Google and Facebook to that of Canadian maple syrup producers in terms of market dominance. Their arguments were not convincing — but were entertaining.
So, basically, he side-stepped the major sticking points altogether and tried to find something that minimizes the argument. Stephens completely sidestepped the argument that the legislation violates Articles 14.4 and 14.5 (Investment), 15.3 and 15.4 (Cross-border Services), 14.10, and 19.4 in CUSMA altogether. In some ways, this is understandable because the CCIA made very rock solid arguments. I mean, I wouldn’t want to be the guy tasked with trying to take on such a fortress of an argument. As a result, he called the arguments “entertaining” for the totally sound reasoning of ¯\_(ツ)_/¯.
Stephens then goes into a completely unrelated re-writing of the events that unfolded in the US, saying that the JCPA “almost” passed and it “almost” made it into the NDAA, only to be thwarted last minute by lobbying from Big Tech. In the process, he failed to acknowledge that Republican’s turned the JCPA into an anti-moderation bill, the fact that numerous publishers were also against the bill, and that it was also pushed back on by grass roots movements headed up by digital rights and civil rights organizations as well.
A leading argument against the bill is the fact that it would do nothing to increase competition in the journalism sector. Ownership of many news outlets have been a major flashpoint in the debates in the US where journalistic independence has been a hot topic for years now. The situation in the US is that there are fewer and fewer independent news outlets available in the US and more and more are quietly being gobbled up by shadowy organizations, a number of whom have a particular political agenda.
Stephens, clearly grasping at straws at this point, then cited a letter that was sent by one of these publishing giants in the US:
The fact that the interests of the United States do not always align with those of Google and Facebook was made abundantly clear in a recent letter sent to USTR Tai by the Washington DC-based News/Media Alliance, a U.S. industry association representing over 2,000 news publishers across the breadth of the United States.
In its letter to Tai, after noting that, “Numerous studies, reports, and investigations have shown without question the ways that (a few dominant) platforms impose unfair terms on news publishers and other actors in the online ecosystem and reap the majority of the benefits, including digital advertising dollars and user data, the news publishers,’’ letter went on to say, “The fact that many of the dominant companies engaging in these damaging practices, and therefore affected by the legislations, are incorporated in the United States does not make these laws discriminatory.” It closed with, “we urge you to refrain from taking positions that benefit one sector of the U.S. economy at the expense of others.”
The problem with this argument is the fact that just because a letter was sent, doesn’t mean that those sending the letter are actually winning in any way. After all, we have a situation of both lawmakers and the USTR directly threatening Canada versus a publishing lobbying organization sending a letter saying “please don’t”. Unless the USTR starts issuing statements that the US government is fully supporting Canada’s endeavours for Bill C-18, then the presence of a letter, regardless of its contents, is an extremely weak argument that trade retaliation isn’t going to happen.
The epic fail then continues with the following:
The lobbying game is underway. The tech industry is trying to enlist the U.S. government to fire warning shots across Canada’s bow, grasping for arguments to turn back the ship. The U.S. news publishing industry is pushing back. The threat of trade retaliation is one more trick in big tech’s bag of tricks, but it won’t happen. First, the Trudeau government will ensure that the legislation is fully compliant with the terms of the new NAFTA, (known as the CUSMA in Canada and the USMCA in the U.S.).
That is definitely worth a belly laugh. The text of Bill C-18 is no mystery. It’s already tabled. The CCIA already issued a white paper in response, pointing to specific provisions in the bill and pointing out where they violate CUSMA. It’s how we got here in the first place. The fact that Stephens is saying what basically amounts to “I’m sure Trudeau will make it compliant” suggests that Stephens hasn’t even bothered reading the bill. He’s literally relying on a gut feeling as a counterargument to all the evidence. You can’t make this up.
This then gets followed up by this gem:
Canada can accomplish what Australia accomplished without having to resort to discriminatory, non-trade compliant measures. Second, U.S. interests extend beyond those of Google and Facebook, both on C-18 and other issues, like dairy. They will pick their issues carefully. The sabre may rattle, but on this issue it will be put back in its scabbard with no blood drawn.
Yes, the US has more than one interest. That much is obvious. Why bring that up as an argument that they won’t issue trade sanctions against Canada on this front? Heck if I know. The US is perfectly capable of walking and chewing gum at the same time. After all, the US has been supplying aid to Ukraine. Does he really think that this would be an argument that the US won’t start issuing trade tariffs on Canada over dairy? Clearly, that didn’t happen. So, why does Stephens think that because the dispute panel over dairy is being set up that they won’t actually issue a trade battle over Bill C-11 and Bill C-18?
Stephens then concludes that it’s all just sabre rattling. It’s probably partly brought up under the assumption that because no action was taken yet, then action will never be taken. That’s quite the facepalm worthy statement. Stephens is perfectly welcome to make that assumption about everything (that if it hasn’t happened now, then it never will), but I highly doubt that thinking would serve him well. The fact of the matter is that Bill C-18 isn’t law yet. You aren’t exactly going to issue trade sanctions against a country when the legislation hasn’t even fully passed. That’s just common sense.
What appears to happen is that Stephens wound up drawing the short straw to allay fears over trade issues surrounding Bill C-18. While he thought he wrote a masterful stroke of genius, all he really accomplished was making himself look like a laughing stock in the eyes of many. It’s not like there wasn’t an opportunity to rebut anything. The arguments, along with the bill, are all presently available. The problem is, he chose not to offer anything close to a counterargument. Instead, in the face of overwhelming evidence, Stephens ended up responding by saying “I got a good feeling about this.”
There really was two ways of going about this. Either actually conduct this thing called “research” and present a solid case that the US has no leg to stand on here or don’t bother writing an op-ed. Stephens chose neither and is now having to deal with people pointing and laughing at him.
Drew Wilson on Twitter: @icecube85 and Facebook.
