Huffington Post: September 17, 2014
Chinese investors will have the right to challenge our laws with no recourse to Canadian courts
Supreme Court of Canada (Getty)
The Canada-China FIPA isn’t a complete trade deal. It’s more like one chapter of a trade deal — the chapter that deals with protecting investors’ rights.
Under these agreements, foreign companies gain the right to sue the host country in an international tribunal that doesn’t answer to national courts. Critics say this essentially gives foreign companies the ability to trump Canadian laws.
True, but under the Canada-China FIPA, a Chinese investor or business will have to prove they were subjected to different rules than would apply to a local investor or business. That strongly limits the extent to which Canadian laws can be challenged at the tribunals, and Canada’s ability to pass environmental and other laws likely won’t be as constrained as critics say. Canada will still be able to reject major investments from Chinese companies.
Supporters of the Canada-China FIPA say Canada needs a deal like this with China because we are running a $30-billion-a year trade deficit with the country. To get our money back, we need Chinese investment, and the FIPA gives investors the confidence they need to put their money here.
The government can keep lawsuits secret
In the treaty, the government retained the right to hide
documents filed in a lawsuit against Canada under the Canada-China FIPA. This is despite (or perhaps because of) the fact that these rulings can go against Canadian government policy.
There was no public consultation, no debate, no legislation
This trade treaty, meant to last a generation, got an hour of debate in front of the House of Commons’ trade committee, and that’s it.
Canada will be bound by the treaty for 31 years
NAFTA can be terminated in six months
, but the Canada-China FIPA runs a minimum of 15 years, has a one-year notice of termination period, and extends rights to Chinese companies already operating in Canada by 15 years after the deal is cancelled.
Supporters of the deal say the at minimum 31-year timeline makes sense for protecting long-term investments and projects.
Some say it’s a better deal for China than for Canada
So far, FIPAs have been advantageous to Canadian business because they have largely protected Canadian investments in other countries. (“Canadian mining companies are using FIPAs with developing countries to claim damages from community opposition to unwanted mega-projects,” the Council of Canadians reports
But with China, Canada is on the other side of that equation — it’s largely the destination country for investment. “Canada will be much more exposed to claims and corresponding constraints” than China under the deal, Osgoode law prof Gus Van Harten writes.
Though the deal sets up the same protections for Canadians investing in China as for Chinese investors in Canada, it creates “de facto non-reciprocity,” Van Harten argues, because of the imbalance in the trade relationship.
Minority shareholders will be able to sue
Investors look at stock prices at a securities exchange in Shanghai on August 22, 2014. (Getty)
Even if a Chinese citizen owns a small portion of a Canadian company, they will be able to use the tribunals set up under the FIPA, Van Harten says.
There’s a legal challenge to the deal in the courts right now
Hupacasath First Nations welcoming figures, Port Alberni, B.C. (Getty)
British Columbia’s Hupacasath First Nation launched a court challenge on the constitutionality of the deal in January, 2013, arguing the government had violated its responsibility to consult with first nations on constitutional and treaty issues. The B.C. Supreme Court rejected that argument in October, 2013, but the first nation is now appealing that ruling before the Federal Court of Appeal.
(read the full article at Huffington Post)
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