FIPA hysteria much ado about nothing

Justin Crann
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MP seeks to allay fears

MP Ray Boughen is seeking to quell rumours about the Canada-China FIPA agreement.

A cross-country letter writing campaign is taking aim at the recently negotiated Canada-China Foreign Investment Promotion and Protection Agreement (FIPA).

“I’m not sure why this suddenly seems to be becoming an issue,” said MP Ray Boughen (Palliser), “I think the opposition became aware of this FIPA agreement some time ago... they actually had three days in the House (but) they didn't acknowledge the negotiations.”

The FIPA agreement between Canada and China was signed by Ed Fast, Canada’s Minister of International Trade and the Asia-Pacific Gateway, and Chen Deming, China’s Minister of Commerce, in early September.

According to Foreign Affairs and International Trade Canada, 24 FIPA agreements have already been brought into force and an additional eight negotiations have been concluded. Canada has concluded or brought into force negotiations with 12 countries since 2006 alone, with an additional 13 countries in active negotiations.

China is the latest to conclude negotiations.

“From our point of view, we look at relationships with China as very desirable,” said Boughen, noting that China’s economy is rapidly expanding and is already the world’s second-largest.

In 2011, Canadian investment in China amounted to $4.5 billion. Almost $11 billion was invested in Canada by Chinese interests.

According to letters received by the Times-Herald, large-scale corporate buy-outs and the exploitation of Canadian natural resources by the Chinese government are likely outcomes of the agreement.

Boughen sought to allay those concerns.

“They (Chinese companies), like any other company, can attempt to buy them out,” Boughen said, “(but) any foreign move has to have the approval of the federal government, and that approval doesn’t come easily.”

Boughen pointed to the rejected buy-out bid made by BHP Potash in 2010 as an example of the difficulties facing foreign buy-out proposals, and trumpeted the efforts of the federal and provincial governments in bringing BHP to Saskatchewan with its Jensen potash mine.

“(They) were encouraged to do business in the province... they were told, ‘you could build a mine but you’re doing it on property that is owned by Canada,’” said Boughen.

“We are open to business, but we’re not going to give up land owned by Canada.”

Another common thread in the letters received was that Chinese companies could sue Canadian governments on all three levels in “secret tribunals” that weren’t governed by Canadian law, but Boughen dismissed the claims.

“If you are going to sue somebody, you’ve got to stand up and state your case,” he said.

The FIPA agreement will become law on November 2.


Organizations: International Trade, Asia-Pacific Gateway, Foreign Affairs and International Trade Canada Times-Herald BHP Potash

Geographic location: Canada, China, Saskatchewan

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Recent comments

  • harmless
    November 02, 2012 - 09:35

    Bilateral trade deals like this are important, it lets companies make decisions without having to factor in as much for risk of things changing under their feet. So yes, it's normal and arguably necessary. I think you perhaps downplay the concerns a bit, but you are missing the real problem: Secrecy. This is a quite broad agreement that governs what could be the Canadian economy's second largest trade partnership and directly concerns us all. And the text of the agreement wasn't available to Parliaments until September 26th. It will become law today. It was not debated in Commons, not like too much meaningful could have been discussed with only a month to understand the proposal. We should have something like this, but we should do it carefully and the decision should involve all of our representatives and experts; it affects us all. Worse, all of our other agreements (escept possibly one with the Czech Republic) require that complaints be handled by a public tribunal. This agreement gives the option for the proceedings to be entirely confidential should either party prefer. China is notoriously closed in its dealings. “If you are going to sue somebody, you’ve got to stand up and state your case,” [Boughen] said. One would hope. But the option to close the proceedings takes that away.

  • Stuart Trew
    October 26, 2012 - 18:41

    Ray Boughen's comments about the Canada-China investment treaty show just how little our government understands or cares about the real-life impact of such agreements. Canada is already the sixth most-sued country in the world under investment treaties like the FIPA. All of the 18-plus disputes have come from FIPA-like corporate protections in NAFTA. Canada has already paid out nearly $170 million in penalties or settlements with private investors that challenged government policies they didn't like. These have included environmental and conservation measures. For example, this year Canada lost a NAFTA claim from Exxon Mobil, one of the richest companies in the world. Exxon and Murphy Oil, another U.S. firm, didn't want to regularly contribute some of their profits to research and development in Newfoundland and Labrador. A private panel of jurists, outside the reach of Canadian courts, agreed the companies shouldn't have to, even if the profit-sharing policy was legal and apparently exempted from NAFTA. We don't know how much Canada will have to pay because the award has not been made public. Why should we stand back and watch Harper open the floodgates to more costly investment lawsuits from China, or include the same excessive corporate rights in his trade and investment pact with the European Union. I don't think we should, and nor do the tens of thousands of Canadians demanding a public debate on the China treaty.