Harper quietly announced his government ratified the FIPA investor-protection treaty with China.
Justin Trudeau quietly avoided the issue. (Although it’s clear he supports FIPA given he criticized Harper for putting limits on Chinese investment in the tar-sands.)
But some neo-conservative economists were much more vocal.
Economist Kevin Milligan
Kevin Milligan tweeted that opponents of FIPA are ultranationalist hypocrites:
What happens if you apply the Green/nationalist ‘sovereignty über alles’ framework to international climate treaties? Or is that just difft?
Only an economist could be this obtuse. Yes giving up democratic rights to stop destructive behaviors and preserve the world for future generations is a smart thing to do.
But China is a totalitarian dictatorship. Why would we want to cede sovereignty to fascist oligarchs who want unfettered access to our resources, especially the dirty-energy tar-sands? The two are the very opposite, not the same!
Economist Stephen Gordon
Stephen Gordon uses the same nationalist rhetoric implying critics are flag-worshipping racists.
He insists FIPA can’t stop a government from passing laws that protect the environment.
Of course, he’s an neo-con economist with an ideological vested interest. Not a lawyer with expertise in international trade agreements.
Trade expert Gus Van Harten
One such expert is Gus Van Harten. He is not a neo-Nazi, as Gordon might have you believe, but an Osgoode Hall law professor who has written two books on investment treaties. One criticism he has:
Chinese companies will be able to seek redress against any laws passed by any level of government in Canada which threaten their profits. Australia has decided not to enter FIPA agreements specifically because they allow powerful corporations to challenge legislation on social, environmental and economic issues.
Chinese companies investing heavily in Canadian energy will be able seek billions in compensation if their projects are hampered by provincial laws on issues such as environmental concerns or First Nations rights, for example.
Given Australia — which already does a lot of trade with China — can export its resources to China without a FIPA treaty, why on Earth do we need one?
Trade expert Lawrence Herman
Another critic is Lawrence Herman who is a senior fellow of the C.D. Howe Institute. He says:
A concern I have is that these arbitration decisions are rendered by ad hoc tribunals, appointed for a given dispute only. … Yet these impermanent tribunals are often deciding issues of social or economic policy of national importance.
Australia – a country that shares many interests with Canada – now says it will no longer sign such investment protection agreements, arguing that if Australian businesses are concerned about sovereign risk in other countries, they should make their own assessments about whether they want to invest in those places.
Why do free-market economists demand a social safety net for businessmen who want to move their businesses to China? Talk about hypocrisy!
What does Canada have to gain?
Gordon’s logic behind FIPA is not at all assuring. He says because we have a massive trade deficit with China — buying a lot more goods from them then they buy from us — we have to let them buy up Canadian assets to balance things out:
Capital flows are the obverse side of trade flows. It makes no sense to claim to be in favour of international trade but against international flows of capital. …
As it happens, Canada runs a fairly large trade deficit with China: roughly $30 billion per year. This means that as far as China is concerned, trade with Canada is essentially a matter of them accumulating large amounts of Canadian assets.
Wow that sounds like an appealing offer! No wonder Harper tried to bury the announcement!
Germany recently raised concerns about investor-protection rules in the Canadian-Europe Trade Agreement (CETA.) If Germany doesn’t trust Canadian businessmen with these kind of powers, why would we trust a totalitarian superpower with them?