If you had a wealthy, powerful friend who constantly lied to you, spied on you and selectively applied arbitrary rules of engagement against you in secret, would you marry that person?
Prime Minister Stephen Harper would. He signed Canada into the Foreign Investment Protection Agreement with China.
In multiple turns, China has shown itself to be an unreliable business partner. Holding out the promise of access to billions of potential customers to lure Canadian businesses, China instead uses its powers of dictatorship to plunder abroad.
China claims the use of Western business standards to gain access to Canadian wealth, but has selectively applied arbitrary standards against Canadian business in China. Some Canadian businesses operations there have been forced to sell out to government-run Chinese businesses.
When aggrieved Canadian investors complain to legal authorities, their lawyers simply said, “Well, that’s how business is done in China.”
Would you marry your country into a relationship like that?
Harper would and has. In secret, without notifying Parliament, without a public debate, much less an election mandate to do so.
And unlike NAFTA, which has a six-month opt out clause, Canada is locked in for a minimum 15 years.
When the deal was announced and analyzed, the notes of disbelief, shock and even outrage from business columnists and business leaders was hard to ignore. But thus far, Harper has managed it.
In the Financial Post, columnist Diane Francis, no lefty by anyone’s reckoning, calls FIPA “a naive, shocking lapse of judgment.”
Which assessment is more telling, in your view? Francis said Canada displayed “the worst negotiating skills since Neville Chamberlain.” TV commentator Rick Mercer wondered in one of his rants: “Was Dr. Evil in the room?”
Compare Chamberlain’s capitulation to Hitler to a James Bond plot containing an evil communist schemer. I call it a draw.
The federal government declared, after ratifying the agreement in secret, that FIPA guarantees the rule of law in the event of dispute. I haven’t seen the agreement — and neither have you — but informed commentators say that’s just not true.
In fact, FIPA guarantees there will be no rule of law — on the Chinese side — in the event of a disagreement.
We are told that under FIPA, a Chinese company already operating in Canada (China’s government controls more of the Alberta oilsands than Alberta does) can act as a Trojan horse for any other, simply by having the government merge them on paper. After all, the Chinese government owns them all. That new entity can then undertake any project it likes, without any review by Investment Canada.
Gus Van Harten is an associate professor at the Osgoode Hall Law School, specializing in international business treaties. He wrote Investment Treaty Arbitration and Public Law (Oxford University Press).
He says FIPA gives Chinese business the power override Canada’s sovereignty in areas like resource management. Canadian firms will get no such reciprocity in China.
Under Article 4, we are told China can bypass provincial, territorial, First Nations, municipal or successive federal government decisions on resource or commercial management.
We can’t even scale down or slow down a Chinese-owned project in Canada. If we tried, the company can sue.
If the company sues, the case is heard in secret and will be ruled on by judges who do not follow Canadian law — or any law. Van Harten says FIPA allows China to operate under “nonconforming” business measures — and Canada has no list of these measures, nor any idea of what they might be.
Taxpayers will not be allowed to even know how many millions or billions a future government will have to pay in compensation to a lawsuit from China.
Remember: Canada has never won any case brought by a U.S. firm under NAFTA — and those adjudications are at least done on a level playing field.
Francis employed a hockey metaphor here: Canada is only allowed to play on restricted zones of the ice, with a select few players. China plays whoever they like, wherever they like, and can appeal any rule, in secret, behind closed doors, while in the penalty box.
Harper signed this deal so it could become a major plank in the next election campaign. He signed it to last 31 years. In secret.
That he is not facing a lynch mob speaks to his totalitarian control of Parliament.
If this is such a good deal, we should have seen it and debated it and approved it, like we did with NAFTA .
Greg Neiman is a retired Advocate editor. Follow his blog at readersadvocate.blogspot.ca or email firstname.lastname@example.org.