Good afternoon, Madam Chair and members of the committee.
I am Professor Barry Appleton. I am a trade law expert and professor of international law. I'm the co-director and distinguished senior fellow at the Center for International Law at New York Law School, as well as a scholar and fellow at the Balsillie School of International Affairs in Waterloo, Ontario. I'm also the managing partner of Appleton & Associates International Lawyers LP in Toronto. I advised the Ontario cabinet committee on North American free trade during the initial negotiations of NAFTA. I've written two books on NAFTA and have guided governments on international trade and economic issues over the years. I also gave oral and written testimony to U.S. executive agencies twice this year on trade, and I plan to do so yet again before the year's end.
I appear before you today to address a critical vulnerability in Canada's preparation for the CUSMA review. This is not a routine administrative exercise but the decisive moment for Canada's economic and digital sovereignty.
The U.S. strategy was never hidden. In 2020 Jared Kushner explained that CUSMA's sunset clause was deliberately designed to provide Washington with recurring leverage. It was a “16-year lease”, in his words, not a “permanent” partnership. The full quote is in my brief. I've had it fully translated for you. Mr. Kushner said, “Why lock in today’s market rates if you will be able to charge more in the future?” He concluded by saying that “the shortening duration gives the leverage to the stronger party, which, given the relative sizes of our economies, likely will always be the United States.” This was in 2020, some five years ago.
Canada, in my view, has been playing the wrong game. Canada must now respond with foresight, not with improvisation. CUSMA is, in essence, a 16-year lease. It's not a permanent treaty. The agreement was designed with a review cycle that advantageously shortens time horizons. Under CUSMA article 34, any party may terminate the agreement on six months' notice. The six-month review cycles lock Canada into uncertainty. A six-month cancellation clause is key. This is leverage by design.
Canada has an institutional disadvantage. Canada enters this review with a structural deficiency in advisory intelligence. The U.S. maintains 15 industry trade advisory committees, or ITACs, that provide security-cleared, sector-specific advice with direct access to negotiating texts. They are comparable to mechanisms in other trade partners of ours—the EU, the U.K., France and Australia. Canada once had parallel capacity through the SAGITs, the sectoral advisory groups on international trade. That machinery was dismantled by various governments over the last 20 years. We now rely on ad hoc consultations that are transparent yet insufficiently technical, confidential or continuous.
Digital sovereignty is my second point. It's inseparable from trade policy. After tariffs, the decisive contest is digital. Silicon Valley declared victory in CUSMA, and they're ready to do so in round two. CUSMA's digital chapter constrains Canada's authority over cross-border data flows, data localization and access to source code and algorithms. In practice, this narrows parliamentary space to govern platforms and cloud infrastructure that increasingly shape our economy and our democracy.
What should Canada do? I'll give you three suggestions.
First, we need to rebuild foresight capacity. Re-establish a legislated advisory system, a Canadian trade and economic security council supported by modern SAGITs with classified access, continuous engagement and balanced representation across industry, labour, indigenous governments, civil society, provinces and security agencies. I wrote a recent paper that is referenced in the brief I filed with the committee today. I also note that the Balsillie School of International Affairs in Waterloo has been partnering with think tanks and public policy schools across Canada to create a supportive trade advisory sectoral secretariat. You can ask me about that in questions, if you're interested.
Second, adopt a whole-of-government strategy. Appoint a trade czar and an innovation czar. Their function would be to coordinate a whole-of-government response and to work with provinces, industry and civil society. We need to take bold action to link economic security, technological governance and industrial strategy with trade.
Third, legislate a digital sovereignty framework. Ensure statutory authority to govern algorithms, data and cloud. I've referenced a paper on this in my brief. I think this is a central priority.
Foundationally, Parliament faces a defining choice: build strategic capacity or keep improvising from weakness. Trade policy without intelligence is guesswork. The window's closing, but it's not over.
I hope I've given you something to think about, and perhaps we'll have an opportunity to talk about this in questions.
Thank you, Madam Chair, for the time.