Bill C-55 and International Trade Law : A Mismatch

The enactment of the Foreign Publishers Advertising Services Act ("Bill C-55") caused a furor in the trade relationship between Canada and the United States. Bill C-55 effectively prohibits foreign publishers from selling advertising in Canada. In effect, Bill C-55 is enacted to curtail the proliferation of "split-run" magazines in the Canadian periodical industry. This paper analyzes the potential difficulties Bill C-55 faces in the light of the international trade agreements. The author argues that certain provisions of Bill C-55 are not in compliance with Canadian international trade obligations. Part l of the paper outlines the background of the Canadian periodical policy. Part II presents an analysis of the legal issues discussed in the WTO Periodicals case. Part II describes the provisions of Bill C-55, the statutory mechanism through which the provisions are enforced, and the exemptions. Finally, Part IV discusses the possible difficulties faced by Bill C- 55 under the GAT, the GATS, and the NAFTA. The author contemplates the susceptibility of challenge to Bill C-55 from various avenues. It is argued that Bill C-55 violates Article III of GAIT, i.e., it accords less favourable treatment to foreign publishers who "use" their magazines as a means of delivering advertising. Furthermore, the Bill contravenes Article X of GATT by imposing a quota regime for the sell of advertising in foreign magazines. Such a regime places quantitative restrictions on the publication of foreign magazines in Canada. The author further asserts that the cultural exemption within NAFTA might not immunize Bill C-55, since there are conflicting interpretations, as the exemption relates to advertising service