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Canada-China investment treaty under fire; opposition renews calls for debate as public sours on Nexen takeover

The last time an investment treaty attracted so much scorn in Canada we were fighting the Multilateral Agreement on Investment proposed by the OECD. It feels good to be doing it again.

The Canada-China Foreign Investment Protection and Promotion Agreement (FIPPA) has royally pissed people off, inside and outside parliament. Tens of thousands of Canadians have asked Prime Minister Harper to cancel the investment treaty and are putting pressure on the government to kill CNOOC’s planned purchase of Canadian energy firm Nexen. Now the opposition parties are turning up the heat, with the China FIPPA coming to trade committee on Thursday.

“While I welcome a briefing from Ministry officials, this is not nearly the level of public debate that needs to happen on such an important treaty,” said NDP Trade Critic Don Davies in a media release today. “I have called for Committee hearings and public debate so that we can hear from stakeholders and other experts about this deal. So far the Government has shown no willingness to allow such a debate.”

Tomorrow’s trade committee hearing should be open to the public, viewable from the ParlVu website. The committee meeting runs 3:30 to 5:30 p.m. but according to the agenda, the FIPPA with China will be discussed in the second half. The NDP are not the only opposition party to call for a debate on the investment pact. In fact, the feeling is unanimous outside the Harper vacuum.

Elizabeth May, leader of the Green Party, tried to organize an emergency House of Commons debate this month and wants Canadians to “Stand Up Against The Sellout to China.”

Wayne Easter, the Liberal trade critic, has spoken out against these investment protections as well, despite his party’s love affair with the FIPPA model since the Liberals signed NAFTA in 1994. To the Vancouver Observer this week, Easter described a 1997 NAFTA investment dispute from Ethyl Corporation challenging an inter-provincial ban on trade in MMT, a gasoline additive suspected of being a neurotoxin.

“Even though we were doing it for an environmental reason, under the investment rules it affected their future profit, and so the Government of Canada had to cut a check to Ethyl,” Easter said. “And that’s what can happen when a government makes a decision in the public interest that affects a company’s future profits of something they’re selling into the marketplace. It really takes your ability of public policy out of public interest hands, being the government, and puts into private investor hands.”

The opposition’s, er, opposition to a bilateral investment treaty with China is supported by widespread public unease that cannot be separated from the proposed Nexen takeover by Chinese state-owned oil company CNOOC.

An Angus Reid poll released yesterday suggests a majority of Canadians (58%) think the federal government should block the purchase, which it can do under the Investment Canada Act review process. Only 12 % think the deal should be allowed. Probably not coincidentally, the Harper government extended the review process. The NDP’s natural resources critic, Peter Julian, asked last week if we are going to have “a genuinely transparent and complete study of the deal or is it going to be 30 more days of secrecy and political games?”

But nor should the link between the takeover and the treaty be severed in people’s minds. The investment pact is the icing on the cake for Chinese state-owned energy firms because it would give them, and by rights the Chinese government, a de facto say in the development of Canadian resources, particularly in the west, where the Chinese share of tar sands is growing. Even Canadian oil executives are worried about foreign ownership, some of them asking Harper for “some ground rules in place before the next one.”

Andrew Nikiforuk’s recent article in The Tyee makes the Nexen-FIPPA connections crystal clear. “By Nov. 1 three of China’s national oil companies will have more power to shape Canada’s energy markets as well as challenge the politics of this country than Canadians themselves,” he starts. “And you can thank Prime Minister Stephen Harper for this economic treason.”

Nikiforuk cites articles by investment treaty expert Gus Van Harten, in which he listed examples of likely scenarios that would trigger an expensive, burdensome and secret arbitration against Canadian public policy. (Van Harten outlined his concerns in an extensive letter to Prime Minister Harper, which was also published at The Tyee.)

“Appallingly,” writes Nikiforuk in The Tyee, “the treaty would give Sinopec, one of the big Chinese backers of the Northern Gateway pipeline, the right to sue the government of British Columbia if it blocks the project. Sinopec could also demand that only Chinese labour and materials be used on the pipeline. Moreover, the treaty gives Chinese state owned companies ‘the right to full protection and security from public opposition.'”

These aren’t what-if scenarios. They are likely cases based on international examples of big mining and energy firms bullying countries through investor-state arbitration when things don’t go their way. More than a third of existing cases before the International Center for Settlement of Investment Disputes relate to mining, oil or gas.

It must be stated that U.S., European and other foreign firms already in most cases have a similar right to sue against public measures that hurt their profits. That does not make it right.

As Van Harten says in his letter to Harper last week, to cite past FIPPAs also ignores that Canada is a capital-importer in relation to China, and as such, “the Canada-China treaty effectively concedes legislative and judicial elements of our sovereignty in a way that other FIPAs do not.” The added worry in the China FIPPA is that it extends these excessive investor protections to the Chinese government itself.

Australia, which has had environmental measures threatened by Chinese state-owned gas companies under a bilateral investment treaty, has discontinued the signing of these sorts of corporate rights pacts and is refusing to participate in the investment negotiations within the Trans-Pacific Partnership trade negotiations. There is no good reason why Canada should not do the same. And yet this government has been signing new trade and investment pacts at a blistering rate. It is pure ideology at work.

Nikiforuk nails the fundamental problem with these treaties when he claims that the China-Canada treaty, “like all bad deals, comes wrapped in totalitarian paper. The deal does not require provincial consent. It comes without any risk-benefit analysis. And it can be ratified into law without parliamentary debate. The more Harper wants to do business with China, the more he acts like another tank in Tiananmen Square. Barring a revolt within Harper’s own party, the trade deal automatically becomes law on Nov. 1.”

Canadians aren’t taking the investment pact or the Nexen sellout sitting down. The Council of Canadians, Leadnow and SumOfUs are demanding, at the very least, a debate on the treaty, which has been denied in the House of Commons or trade committee so far.

“This deal would pave the way for a massive natural resource buyout and allow foreign corporations to sue the Canadian government in secret tribunals, restricting Canadians from making democratic decisions about our economy, environment and energy,” says the Leadnow joint campaign newsletter with SumOfUs.

The two organizations are asking people to write the Prime Minister “to reject the Nexen takeover and the Canada-China investment deal,” and to “start over with a national conversation that brings Canadians together to make responsible choices about the wisest long-term stewardship of our natural resources.”

There has not been a better opportunity since Harper came to power in 2006 to have a discussion in Canada on how the government’s trade and energy agendas work together undermine democratic options, at home and abroad, for resource development and conservation, now and for future generations. What Chinese firms will be able to do to Canadian policy via the FIPPA, Canadian firms (ex. Pacific Rim) have been ready to do in Latin America and other regions where mining and resource investment is intensive. (See Jen Moore’s article in The Star this week on why Canada should not ratify the Panama Free Trade Agreement in its current form.)

I should have mentioned this at the top of this article that we beat the MAI. It’s easy to forget these things, especially when faced with the Harper government’s unique attack on democracy and the environment. It can sometimes feel impossible, but these bad trade and investment deals can be stopped under the right conditions, with the write pressure. You can start by sending a letter to the Prime Minister today, spreading the word, and keeping the pressure on our opposition parties to do the right thing.