Social Policy in Ontario

Canada’s international trade

Posted on September 28, 2015 in Policy Context

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TheStar.com – Opinion/Election commentary: One of 11 commentaries from independent experts on specific fields of foreign affairs.
Sep 28 2015.   By: Gus Van Harten

Since winning his majority, Stephen Harper’s government has signed or finalized 23 new trade or investment deals.  The right trade agreements can create opportunities for Canada. But the Harper government has seemed more interested in getting lots of deals than in making sure each is good for Canada’s economy.

Of all the deals, three are most important. They are the Foreign Investment Promotion and Protection Agreement (FIPA) with China, the Comprehensive Economic and Trade Agreement (CETA) with Europe, and the U.S.-led Trans-Pacific Partnership (TPP).  Considering the financial transfers they create, a more precise name might be: A Locked-In Agreement to Transfer Public Money to Large Companies, Lawyers, and Arbitrators.

The deal we know the most about is the FIPA, the only one that has been finalized.

Some of its details show how the government has been behaving like a salesperson who gets deals by selling at a loss:

1. The Harper government gave Chinese investors “market access” to Canada — a right to buy what they want in our economy — without getting the same for Canadian investors in China.  That is the most lopsided concession I had ever seen by Canada or any other country across hundreds of similar agreements.

2. When Harper announced the deal he said that it “ensures non-discriminatory treatment” for foreign investors. But the terms let China keep all its existing laws, policies, or practices that discriminate against Canadian investors.  No one could fact-check Harper’s misleading claim because the text was kept confidential for months afterward.

3. In FIPA, the Harper government exposed Canada to potentially massive financial liabilities due to the special and lopsided rights it gives to foreign companies, which can seek uncapped amounts of public compensation from governments directly before international tribunals.  The Mulroney government gave similar rights to U.S. companies in Canada under NAFTA. At that time no one could predict the hundreds of costly claims brought by foreign companies against countries in the last 15 years.

Harper was also quite desperate to finalize the CETA before the election, yet, despite various concessions, could not get it done in time. This is mostly because the Europeans looked more closely at the deal’s generous protections for foreign investors and asked about the consequences for domestic courts, democracy, and public budgets. There has been a similar debate in the United States over the TPP.

I cannot be more positive about these long-term trade deals. The FIPA in particular is depressing because it will be very difficult for future governments to remedy. Harper seems a true believer on “free trade.” True believers can look like born suckers after a tough negotiation.

Gus Van Harten is a professor at Osgoode Hall Law School and author of Sold Down the Yangtze: Canada’s Lopsided Investment Deal With China.

< http://www.thestar.com/opinion/2015/09/28/election-commentary-canadas-international-trade.html >

Tags: economy, globalization, ideology, privatization, rights, standard of living

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