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If the CNOOC/Nexen takeover approval is given before the Keystone pipeline is approved, a new set of questions for the Americans will be opened up. So will any trade deal, now in Parliament, that gives China similar privileges as Americans get.
Letting China Inc. have special access could give President Obama a reason not to approve Keystone, and could also give Romney, if he wins, a reason to give approval, as he has pledged to do on Day One.
I raise the issue of Keystone XL, not because the Americans have a right to tell us what to do, but because they always do what is in their national interest. So does China and it has obviously targeted the oil sands with a view toward diverting its oil to China. That is the endgame, make no mistake about it. This is not about Nexen, or offering opportunities to Canadians to do business in China.
The proposed bilateral Foreign Investment Promotion and Protection Agreement with China would give its entities the same recourse and dispute settlement mechanism (called Chapter 11 in NAFTA) as Americans have through NAFTA. They can claim discrimination if denied investments or immigration requests.
This should unsettle Canadians. Chinese companies here and elsewhere have behaved questionably and, besides, there is no rule of law in China. This means Canadian companies and individuals will not enjoy the privileges we are extending to them.
The CNOOC/Nexen deal, and trade deal, are not in the “national interest” of Canada, in my view, which is the issue that is under scrutiny by Investment Canada.
So, to underscore, if the Tories in Ottawa and Edmonton decide to open the oil business to China Inc., then the Americans could decide not to approve Keystone and become dependent on another huge pipeline from Alberta where foreigners will dominate.
Chinese companies have become aggressive, both here and in the U.S. Last week, one sued authorities and President Obama for banning it from buying power generation facilities using wind.
Here, the under-publicized cautionary tale about one of China’s largest state-owned enterprises bears repetition and the latest developments are concerning:
In 2007, gigantic state-owned enterprise, Sinopec Shanghai Engineering and its Canadian subsidiary SSEC Canada brought in 132 temporary workers from China to build storage tanks at an oil sands project.
In April 2007 an accident there killed two and injured five workers. The rest were quickly sent home.
For the rest of this column, please go to the National Post website: http://opinion.financialpost.com/2012/10/05/letting-china-inc-into-the-oil-patch-could-scuttle-keystone-xl/