Canada-China trade pact puts our sovereignty at risk

The Vancouver Sun | 14 August 2015

Canada-China trade pact puts our sovereignty at risk

Sold Down the Yangtze: China’s Lopsided Investment Deal with Canada
by Gus Van Harten

Gus Van Harten is a professor with Osgoode School of Law. His new book, Sold Down the Yangtze: China’s Lopsided Investment Deal with Canada explores a trend of international investment deals, including the FIPA which, he argues, shows that Canada can be too eager to compromise its economy, long-term, in the hope of a quick buck now.

Q: What made you want to write Sold Down the Yangtze?

A: I felt a responsibility as a publicly funded academic to explain how much the federal government gave up to China in the long-term investment deal. I wanted to give a more accurate account, while still making it accessible to those who don’t have the luxury of spending years to research the government’s spin.

Q: What is the FIPA?

A: It stands for Foreign Investment Promotion and Protection Agreement. Canada has 27 of these agreements with smaller countries, whose companies don’t own much in Canada. The China FIPA is the first FIPA that puts major risks and constraints on Canada. Chinese investors already own billions in assets here.

Q: The book is written for a general audience. Can you tell us about the process of writing about such a complex topic in a way that would be highly readable even for those without specific knowledge of trade deals?

A: I tried to think of each chapter as an opinion article in a newspaper. It’s a lot harder to write something short than it is to elaborate at length.

Q: What is the FIPA’s biggest threat to Canada’s sovereignty, in your opinion?

A: It is the transfer of power from our legislatures and courts to a small group of lawyers who are appointed regularly as arbitrators. The lawyers have immense power to compensate Chinese investors for the impact of Canadian laws and policies on Chinese assets. Under the FIPA, the transfer of power happens in any case when a Chinese company files a claim. Thus, supreme power over public budgets in Canada is now in the hands of Chinese investors and FIPA arbitrators.

The FIPA puts a new price tag on democracy. We can elect governments to pass laws, but at a potentially huge cost of compensation for Chinese investors. That is how the FIPA boosts the position of Chinese companies over others.

Q: What do you hope readers will take away from your book?

A: I hope they will say to themselves: Now I have a better sense of why the FIPA raises concerns for Canada’s economy and democracy. I am more able to make up my mind about the government’s handling of China. And, I can see what we can do about it.

Q: What can Canadians do to lessen the negative impact of the FIPA?

A: Canadians can push political candidates to commit to renegotiating or cancelling the FIPA, supporting a new law to make FIPA lawsuits public, and prohibiting long lock-in periods in international agreements.