Canada-China trade deal is too one-sided – by Diane Francis (National Post – November 3, 2012)

The National Post is Canada’s second largest national paper.

This week, a casualty of China’s unfair treatment of foreign investors spoke privately about the new trade deal signed between Ottawa and Beijing. His mining company was there, spent millions and was forced to sell, a de facto expropriation, to a Chinese “company.”

Governments and proxies on behalf of politicians control many Chinese companies. “There is nothing in this deal with China [the Foreign Investment Promotion and Protection Agreement] that will protect Canadians there because they have not agreed to apply our laws there,” he said. “It’s quite unbelievable.”

In fact, the Tories, backed by a naïve Canadian Chamber of Commerce and a handful of big, conflicted business interests, have demonstrated the worst negotiating skills since Neville Chamberlain.

Ottawa capitulated to China on everything. The deal, using a hockey metaphor, allows only a select few to play on Team Canada on a small patch of ice in China and to be fouled, without remedies or referees. By contrast, Team China can play anywhere on Canadian ice, can appeal referee calls it dislikes and negotiate compensation for damages while in the penalty box behind closed doors.

The terms agreed to by Ottawa are unprecedented and would be laughed out of Britain, Brussels, Canberra or Washington. Beijing has negotiated a heads-I-win-tails-Canada-loses deal.

Here’s why:

-The Agreement gives China Inc. “enclave legal status.” Once allowed inside the country, Chinese companies have more power than Canadian companies. They can take any dispute with governments or courts outside the Canadian legal system to an arbitration process under its Article 4 and 22. These arbitrations, unlike those in NAFTA, are conducted in secret, have no limits on damages awarded and are adjudicated by three arbitrators/lawyers — one appointed by the Canadian authority being sued, one by China Inc., and a third from the World Bank approved by both. In other words, Chinese companies are allowed the privilege of having their disputes with Canadian authorities settled in secret by three individuals, two from outside Canada.

-Ottawa’s inept negotiators gave up a requirement for transparency as part of this arbitration dispute- settlement mechanism. The agreement allows the Canadian federal government to withhold documents if it wishes to. This is contrary to all other international treaties involving such dispute mechanisms.

-The agreement opens wide a “Trojan Horse” loophole. Chinese investors or companies already in Canada can contest all government or court decisions and can also bypass Investment Canada. Once in, they can buy anything they wish without foreign investment review.

For the rest of this article, please go to the National Post website: http://opinion.financialpost.com/2012/11/02/canada-china-trade-deal-is-too-one-sided/

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