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COMMENTARY · 21st September 2012
Elivabeth May - Green Party
It is hard to know how else to put it. I don’t want to get anyone freaked out or overly alarmed, but are we paying any attention?

Attention should be paid to the fact that the Prime Minister has signed a deal with President Hu of China that promises investor protection. The text of said deal is not yet before the House of Commons, but everything I read about it (including from business analysts at Heenan Blaikie and Osler, Hoskin and Harcourt) anticipates the deal will include investor-state provisions similar to those in Chapter 11 of NAFTA.

Chapter 11 of NAFTA allows corporations from Mexico or the USA to claim damages against Canada if any level of Canadian government (municipal, provincial or federal) causes them to experience less profits than they had anticipated. Canada has actually repealed a law limiting a toxic gasoline additive when the US-based manufacturer sued under Chapter 11 — and we paid $10 million plus in damages. This outrage only gets more outrageous if the claims for multiple millions in damages come from a non-democratic enormous economy to which we have hitched our wagon as a compliant resource colony.

When will Mr. Harper share the text of this investor agreement with Parliamentarians? When will it be shared with Canadians? It was signed on September 8th when both Harper and Hu were in Russia. It must now be ratified. Assuming all the Conservative MPs who are worried about selling out our country to China do what they always do and submit to the will of the Boss, it will become a trade obligation. China will, if offended by any new health, labour, or environmental law, be able to make a claim for damages. I have already witnessed the chilling effect of Canada knowing a US based corporation can sue under Chapter 11. It was rumoured that former Liberal Health Minister Allan Rock refused to ban cosmetic use of pesticides for fear of Chapter 11 claims by US pesticide manufacturers.

What happens when Canadian laws, passed democratically, are struck down in hotel room arbitrations launched by the Communist Party of China?

I pay attention to things that CNOOC’s CEO says in public. In the August 29, 2012, Wall Street Journal, CNOOC CEO Wang Yilin said, “Large-scale deep-water rigs are our mobile national territory and a strategic weapon.” OK, so the bitumen isn’t mobile – until you mix it with diluents and stick it in a pipeline. But the oil sands do become Chinese territory. What did he mean about “strategic weapon?”

Are there national security implications?

I would love to trust in a national security review under the 2009 amendments to the Investment Canada Act, except that Stephen Harper specifically rejected the advice of the blue ribbon panel (struck after the Minmetal attempt to buy Noranda) that Canada needed a clear, objective definition of “national security.” The experts thought we should have a definition and use it to assess any takeovers of Canadian companies by foreign interests — particularly state-owned enterprises. Our PM rejected the advice. Instead the Canada Gazette for the 2009 amendments says that “national security” cannot be defined. It is, apparently, a fluid term.

Smart people I respect, like Andrew Coyne, say “don’t worry — there’s no national security threat when you cannot take the resource out of the country.” But then I run into stories like this:

Beijing hints at bond attack on Japan

Jin Baisong from the Chinese Academy of International Trade – a branch of the commerce ministry – said China should use its power as Japan’s biggest creditor with $230bn (£141bn) of bonds to “impose sanctions on Japan in the most effective manner” and bring Tokyo’s festering fiscal crisis to a head.

Writing in the Communist Party newspaper China Daily, Mr. Jin called on China to invoke the “security exception” rule under the World Trade Organisation to punish Japan, rejecting arguments that a trade war between the two Pacific giants would be mutually destructive.

Separately, the Hong Kong Economic Journal reported that China is drawing up plans to cut off Japan’s supplies of
rare earth metals needed for hi-tech industry.
The Telegraph, September 19, 2012

OK, maybe he’s just threatening to destroy Japan’s economy. Maybe he doesn’t mean it. Maybe the WTO wouldn’t let him do it…. but then there was the Sino-Forest fraud, busted by the Ontario Securities Commission:

OSC puts the spotlight on Sino-Forest gatekeepers

In its allegations Tuesday, the OSC noted that auditors Ernst & Young “were not made aware” of Sino-Forest’s “systemic practice of creating deceitful purchase contracts and sales contracts.” The commission makes no further comment on the audit firm’s work. A spokeswoman for Ernst & Young could not be reached for comment Tuesday.

The OSC issued a report in March calling on boards, underwriters, auditors and stock exchanges to improve the practices for listing foreign companies on Canadian stock exchanges, saying there has been a broad lack of “skepticism” about business practices in emerging companies like China.
Globe and Mail, May 22, 2012

There’s a beautiful term: “broad lack of skepticism.”

It makes me nervous that Chinese companies are merely branches of the Chinese government. The Communist Party hierarchy appoints the boards of directors of CNOOC, Sinopec and Petro-China.

When I read in the business pages that Petro-China wants to bid on construction of the Enbridge pipeline, and read in the same story that Chinese companies are very competitive in their bids because of low labour costs, I picture the labourers who built the national dream of Pierre Berton’s imaginings… with a brutal and nasty history. We have a temporary foreign workers programme. It could happen. And the bitumen going through the proposed pipeline is to go to Chinese supertankers to Chinese refineries.

All this makes me nervous. It makes me nervous in two quite contradictory ways. Firstly, I am a tolerant small “l” liberal type of person. I am not Sino-phobic. China is not a country one can ignore. In terms of global climate negotiations, China’s engagement is essential. China has been, at least at COP17, far more progressive than Canada in talking about the need for a global climate deal.

I want greater ties with China for environmental endeavors, and cultural exchanges, and — yes – trade too. Losing sovereignty to China makes me nervous. I don’t want to be intolerant. But I want us to trade items made in Canada, by Canadians, to China. I don’t like the idea of China owning Canada. It makes it hard for us to point out to the Chinese government that it must start respecting human rights. We need to be really forceful in advocating for religious and political freedom in China. How do we do that when they have veto power over Canadian laws?

And then there are issues of global tensions. Mr. Harper and John Baird are talking tough to Iran. But what about the fact that, while we claim we are exerting sanctions on anyone doing business with Iran, Sinopec, now a major stake-holder in Syncrude, is Iran’s number one customer for oil? Or, that Chinese oil money helps prop up Bashar al-Assad?

So, bottom-line, the Nexen-CNOOC deal doesn’t have me nearly as freaked out as the investor deal Stephen Harper signed in Russia. But when I think about the idea of “net benefit” I just don’t see any answer but “no.”

They have landed in Terrace, BC
Comment by MaggieJo Johnson on 22nd September 2012
I am still curious after heading to work one day a # of weeks ago to come across a long lineup of people crossing the crosswalk from All Seasons to the Terrace Economic bldg (the old Police Stn)...being led by a tall Caucasion man in...well a suit.

What caught my eye is that everyone was dressed to the utter tee! And of course the group led by the tall white man was being followed by a proper single-filed group of shorter statured people...again all in black suits with one female in a most fantastically fitted black pencil skirt. (Yeah, I was covettingly drooling.)

While being led along, they carried along their briefcases and wheeled cases. I waited at the stop light and wondered what was up.

Looks like the Chinese have landed in Terrace, BC.

'Gotta appreciate the Chinese drive, heh?
Right behind you Helmut
Comment by Blocky Bear on 22nd September 2012
Elizabeth May! Yeah!
Comment by Terry on 21st September 2012
The manchurian candidate.
Ready to learn Chinese?
Comment by Janice Robinson on 21st September 2012
It took about a hundred hard years for all us Indians to speak English. We had no choice.

I wonder....

Many Chinese immigrants to Canada don't bother learning English, and they enjoy building"chinatowns" wherever they go.

How does the idea of your great-grandchildren having to speak Mandarin sound to you all?
In the name of economic prosperity
Comment by Joseph K on 21st September 2012
Steven Harper will sell you the dentures from his dead grandmother. We are is such a hurry to go to bed the the cummunist regime of China in order to sell our resources.

We should not be willing to comprimise our national integrity just to make a buck. I have seen what the Chinese can do when they do not get what they want. They will not hesitate to take you to court and sue.

The longer Harper stays as Prime Minister the closer we are to becomming a contolled state of some foreign nationalist country (China comes to mind). Not to say it will happen, but you never know. I fear for my children and what kind of country this will be if we continue with our current path.
Comment by Helmut Giesbrecht on 21st September 2012
I think Elizabeth May has this right.