The China-Canada FIPA: Another bad deal for Canada

31-year agreement destroys flexibility

In this month's Commentary, I had intended to take a break from dismal topics like dilbit pipelines, fracking, and the scandal of privatizing BC forests. But then this FIPA-China thing came along, altering my plans.

FIPA is the China-Canada Foreign Investment Promotion and Protection Agreement. Already Canada has FIPAs with 23 other nations, many of them minor, like Barbados or Trinidad, concluded between 1990-2001. The difference here is the gigantic size of China's economy, the second largest in the world, and the adverse conditions to which the Harper government is poised to commit us.

The agreement was to be signed by Oct. 31 but, for some reason, it didn't happen, and currently (while I write) the Prime Minister is in India. If signed at all, it will not be until Harper's return.

Before further comment, let me outline the conditions of the treaty. For one, it has been initiated solely by the federal government literally behind our backs. There has been no public consultation, and no debate in parliament.

The Green Party's Elizabeth May requested an emergency debate in early October. Her request was denied. The NDP's Don Davies proposed a debate in the Standing Committee on International Trade on Oct. 2. The motion was struck from the agenda.

This treaty is the most far-reaching since NAFTA (North American Free Trade Agreement). It will be binding for both provincial and federal governments of Canada for a minimum of 31 years, until 2043. Like NAFTA, this FIPA gives Chinese companies the right to sue Canada for compensation for any losses they might suffer due to legislative regulation or court decisions in connection with their investments. For instance, new legislative regulations to set environmental limits will be disallowed.

Take the example of the Northern Gateway Pipeline: If BC should decide to reject that reckless proposal, Chinese companies could sue BC for changing course, even if all of us rose up and said No. This is only one reason why the China-Canada FIPA is seen as a threat to Canadian legislative and judicial sovereignty.

In contradiction of long-standing policy, the federal government will retain the right not to release documents filed in Chinese investor lawsuits against Canada, if government deems it "not in the public interest" to do so, i.e., if they don't want to.

Here's another judicial point. The arbitrators of a dispute under the treaty would operate outside of the authority of the Canadian legal system and Canadian courts. There would be three arbitrators, only one of which would be Canadian. Another would be none other than the World Bank!

This means that over three decades Canada could be faced with billion-dollar suits due to provincial decisions not even reviewable in Canadian courts. These three arbitrators, all focused on money-matters alone, could decide the fate of millions of Canadians, not to mention the state of our eco-systems. Presently, Belgium is facing a $3 billion suit from a Chinese company over a foreign investor agreement.

For the record: Canadian investors have never won compensation in any of the known 16 lawsuits against the US and other countries under NAFTA and FIPA. Canada has paid out $170 million in "compensation" in four cases.

Aside from the outrage of making a deal of this importance behind closed doors, the deal isn't even a good one. Unlike Canada, China retains the right to discriminate in favour of its own companies. This FIPA will not, as NAFTA does, reduce tariffs to Chinese markets. Its principal function is to protect both countries' assets from legislators and courts.

I can say with confidence that democratic-minded people would never condone such a policy, either for Canadians or for Chinese citizens. And nothing could be more mal-adaptive for human social behaviour than giving up the right to make policy adjustments as conditions change. In 31 years, things are going to be different and we'd be wise to hold on dearly to whatever flexibility we now possess.

China is immense. It is predicted with certainty that the Chinese government's investments in Canada will be monumental compared Canada's in China. It is estimated that investments will increase from about 2 to 1, which they are now, to 10 to 1 within 10 years.

The China-Canada FIPA will pave the way for massive companies to spend billions buying out Canada's natural resource companies (consider the Nexen purchase). If our resources are controlled by Chinese companies, what then? Where do you and I figure in here? Furthermore, why should we lead our lives to protect "investors" whoever they may be, Chinese, American - or Canadian?

You wonder, will there be any limit to what this Harper government can do to Canada within its term of office?

See the net for an important legal rebuttal of Harper's FIPA by professor Gus van Harten in The Vancouver Observer. See also for a group leading the campaign of public opposition.

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