Canada lines up with U.S., Mexico on e-commerce pact

Canada, the United States and Mexico have formed an agreement that will guide policymaking around e-commerce taxation, customs clearance and efforts to reduce spam.

Industry Canada on Monday said it had signed on to the framework,

which focuses on three areas the countries believe will ease some of the trans-border issues that may impede e-commerce between their respective economies. These include policies to strengthen the Internet as a business medium, such as stopping unsolicited commercial e-mail and spyware, privacy protection measures and ways of operating border facilities in a faster, more streamlined fashion. The Ministry of the Economy of the United Mexican States and the U.S. Department of Commerce will participate with Industry Canada.

Richard Simpson, director-general of electronic commerce at Industry Canada, said the framework is not a multi-lateral agreement that sets out specific rules, but something that lawmakers will use as a guide.

“It’s not so much changes as responding to new challenges that are emerging from the Internet, particularly some of the threats of the Internet such as spam and spyware,” he said. “What it’s meant to do is confirm some policy principles that would be applied to each company’s laws regarding e-commerce.”

Spam is an area that will require quite a bit of work among the participating agencies to reduce or limit its growth Simpson admitted. Each country has initiatives under way. Canada, for example, recently received a report from an anti-spam task force the government convened. 

“We’ll be working on with Canadian agencies and their U.S. and Mexican counterparts, primarily looking at co-operation in the area of enforcement initially, but also ways in which the countries can work together on stronger anti-spam policies,” he said.

The agreement supports the idea of making permanent and binding the current World Trade Organization (WTO) practice of not imposing customs duties on electronic  transmissions. Simpson said the three countries will also re-examine barriers at customs that slow down the fulfillment of e-commerce purchases. Both business-to-consumer and business-to-business cross-border issues will be examined, according to the framework, though it adds, “The Participants to the Framework of Common Principles for Electronic Commerce do not  intend to create legal obligations under international law.”

Alan Gahtan, a Toronto-based lawyer who specializes in e-commerce issues, said better co-operation would be particularly useful in the B2C world.

“We get into situations where even though there are no customs applicable to it, there’s still a GST that’s applicable,” he said. “You can end up with a $20 purchase with three or four dollars in taxes and then a $30 customs clearance with it from UPS.”

Other plans under the framework include an analysis of the respective regulatory regimes for electronic authentication, an initiative to identify ways of removing barriers created by differences in electronic contracting and a draft agreement on mutual recognition of digital certificates issued by all three countries.

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