USMCA impact on AI regulation.

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The USMCA contains a new (when compared to NAFTA) chaper on Digital Trade. This addresses barrier free trade in respect of digital products (basically products that can be transmitted electronically) including by exempting them from duties and requiring no less favourable (they spell it without the “u” in the text but being up here in Canada I’m leaving it in) treatment of digital products of any other party. Some other technical and public policy matters like electronic signatures, spam, cybersecurity and consumer protection are also addressed.

However there is, as well, some interesting content when it comes to AI regulation. Although AI is not directly addressed, there are now rules that will affect data, which is of course a critical element for AI, and other provisions that have relevance to AI. These include:

  • requiring adoption of privacy and personal information protection that follows international standards and which address data quality, purpose specfication, use limitation, transparency and accountability with restrictions being proportionate to risks;
  • promotion of compatability between personal information protection regimes;
  • no restrictions on cross-border transfer of information, including personal information, for certain entities and except in the case of legitimate public policy objectives;
  • transfer or access to algorithms and source code is not required in respect of products using such software cross-border;
  • open data is promoted and to the extent made available, is to be machine readable, open format, searchable, retrivable, useable, resuable and redistributable;
  • access to government information (central, not state or provincial) is to be expanded to promote business opportunities

We can see these inclusions as generally having a positive effect on the ability to use AI or at least not creating barriers to it. Of course, without specific discussion on AI regulation in the text, the door is open to domestic legislation having an opposite effect and then having to be arbitrated for compliance with USMCA.

Mexico is not subject to this chapter for three years.


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