Several points:
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I've written about this in more detail over at CKA's sister site Vive Le Canada, but I find it striking how various conservative voices have expressed concern about the "Court Party" acting for social change in the courts, but there doesn't seem to be nearly as much concern about the transfer of power from elected, accountable politicians and judges with checks on their power and solid constitutional mandates for their roles, to unelected trade bureaucrats with none of these safeguards. Issues like the debate over fracking in Quebec end up being taken out of the public sphere and ruled on without democratic debate. Even the threat of lawsuits can discourage governments trying to act in accordance with their citizens' wishes.
-I'm also reminded of what Eric Kierans was writing 25 years ago, warning of how companies acquire so much power and wealth that they act as powers unto themselves, twisting things around so capitalism benefits the producer, rather than the consumer, which is how it was originally formed as observed by Adam Smith. Kierans argued that governments had an important role to play in establishing the rules and principles by what society functions. Within that framework, capitalism created great wealth and brought tremendous benefits to society.
Smith also talked about how government that exists solely for the protecting of private property frequently ends up defending the rich against the poor, even as he talked about the rich paying higher taxes, the inability of society to flourish when so many people are miserable and how high profits can be as problematic as high salaries, even as he also talked about enlightened self-interest.
Kierans talked about how countries can and should open themselves up to trade, but it should be done on a pragmatic basis in a response to our shifting needs, not in long, locked-in agreements like these or one-size-fits-all theories. Almost ten years ago, John Ralston Saul cited China itself as an example of how this can function-
and there's also the example of Brazil today: $1:
Brazil has embraced a “Greater Brazil” model of industrial development to accelerate economic growth and fill gaps where the private sector isn’t yet active. “They are more willing to use private sector industry and businesses as a tool for national ends than we are in Canada,” Mr. Dade said. “That causes some friction.”
Mr. Ciuriak said Brazil’s industrial policies are largely outward rather than inward-looking. “It’s not old industry protectionism, but it is interventionist.” Brazil, he said, can’t afford to be overly protectionist because it needs to import so many of the components used by its nascent industries, such as aerospace.
However, if anything FIPA gives foreigners a forum that Canadian-owned businesses, not to mention Johnny and Janey Canuck, do not-namely, a specialized dispute forum. The rest of us ordinary schmucks have to use the court system. I'm all for giving wronged parties, including foreigners, a fair shot at having their stories heard-but if we want a level playing field, surely they can use the court system just like we do?
-Not to mention that FIPA itself is seriously flawed.
Here's what law professor Gus Van Harten had to say on the matter:$1:
Van Harten said FIPA is practically a one-way deal in favour of China, and Ottawa needs to acknowledge the non-reciprocal aspects of the deal and explain why they would ratify it two years after it was first signed.
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In a press release today, Ottawa insisted the deal will protect such Canadian investors in China and help build trade relations.
The release claims the deal will give "Canadian investors in China the same types of protections that foreign investors have long had in Canada."
But Van Harten doesn't buy that line.
"One aspect of the treaty is it has an exclusion of all existing discriminatory measures in Canada or China," he said. "China, it's safe to say, has far more existing discriminatory measures than Canada does."
Local government rules or different tax rates will now be locked in under the agreement, giving Chinese officials a tool to punish any Canadian investors it wishes to, he said.
You may not take the Tyee seriously, given how left-wing its articles tend to be. But
here's Paul Wells, a guy who's not exactly known for his Marxist tendencies, warning about these same things almost two years ago:$1:
Here’s the text of the Canada-China FIPA. These things are common in international relations. They amount to promises to play fairly between two countries, with mechanisms for settling disputes if one country feels slighted. Canada has more than 20 with other countries. China has many of its own (under a more common generic name, Bit or Bilateral Investment Treaty). The heart of a FIPA is a promise to treat the other countries’ investors at least as well as you treat any foreign country’s investors (“Most Favoured Nation Treatment”) or, better still, as well as you treat your own country’s investors (“National Treatment.”) Here’s the relevant section of the Canada-China FIPA, with bold-face emphasis added.
Article 5
Most-Favoured-Nation Treatment
1. Each Contracting Party shall accord to investors of the other Contracting Party treatment no less favourable than that it accords, in like circumstances, to investors of a non-Contracting Party with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of investments in its territory….
Article 6
National Treatment
1. Each Contracting Party shall accord to investors of the other Contracting Party treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to the expansion, management, conduct, operation and sale or other disposition of investments in its territory.
One of these things is not like the other.
Most of the news coverage about Canada-China investment has centred on Chinese attempts to buy into Canada, especially on the Nexxen deal. But Canadians are also trying to buy into China and they have had a hard time of it. That’s what was making Harper nervous in Vancouver (and former Harper cabinet minister Jim Prentice borderline apoplectic). And the vaunted FIPA provides prospective Canadian investors (of which there are many) very limited protection compared to what it provides existing Canadian investors (of which there aren’t enough).
...
So on this vital measure, the Canada-China FIPA uses the Chinese instead of the Canadian standard for protection. Contrast with the FIPA Canada negotiated with Jordan in 2009, while Stockwell Day was trade minister. That treaty extends national treatment at the establishment and acquisition stage.
And if that's not enough,
here's business columnist Diane Francis, a woman who again is not known for her NDP credentials:$1:
“There is nothing in this deal with China [the Foreign Investment Promotion and Protection Agreement] that will protect Canadians there because they have not agreed to apply our laws there,” he said. “It’s quite unbelievable.”
In fact, the Tories, backed by a naïve Canadian Chamber of Commerce and a handful of big, conflicted business interests, have demonstrated the worst negotiating skills since Neville Chamberlain.
...
There is not a single gain for Canada here whatsoever: No market access, no reciprocity, zero rights for our investors there. China Inc. gets everything.
Obviously, this deal would never have happened in Europe or the U.S. and Canadians must demand the same national protection. This deal must be overhauled or, better yet, shredded. The provincial governments must challenge this in the Supreme Court.
Once again, Francis was warning about this two years ago.
Of course governments should pay the penalty for not living up to their promises and commitments, which is what FIPA is ostensibly about. But what about when
companies themselves fail to live up to their commitments?-Foreign investment in new Canadian businesses is always welcome, of course, and I'm quite happy to also see foreign companies set up franchises, stores and factories in Canada, providing jobs to our people. However, back in 2008 Mel Hurtig cited government figures noting about how almost all of that investment was for buying up existing companies rather than investing in new ones. John Ralston Saul decried this as a "sophisticated form of asset stripping" and "coupon clipping for the lazy".
-Unfortuantely, it seems that anyone who dares to raise any of these points these days seems domed to be demonized as a closet Marxist, hating trade, wanting to nationalize everything in sight, and so forth. It's almost as if these trade agreements, and the ideas behind them, are supposed to be immune from criticism-anyone who raises dissent is attacked and ridiculed.
And yet, the really interesting thing is how much more consensus there seems to be on so many issues than at first glance. We have an
increasing number of businesspeople, conservative columnists and politicians concerned about the level of foreign ownership in Canada, wealthy people like
Jerry Greenfield,
Brett Wilson and
Nick Hanauer talking warmly about the virtues of corporate social responsibility and expressing concern about the growing inequality in Canada, even as think tanks like
the Conference Board of Canada and the
International Monetary Fund are saying the same things.
This isn't just a progressive thing-people on the left and the right share a lot of pressing concerns about these issues.
As is so often the case in Canada, there's a lot more common ground among different factions than anyone seems to realize...
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