Since Sept. 9, Canada and China have had a Foreign Investment Promotion and Protection Agreement (FIPA), which was signed by Chen Deming, China’s Minister of Commerce, and Ed Fast, Canada’s Minister of International Trade and Minister for the Asia-Pacific Gateway. However, the agreement has not yet been ratified by Prime Minister Stephen Harper, who, together with Hu Jintao, President of China, presided over the signing ceremony.
Green Party leader Elizabeth May, MP Saanich-Gulf Islands, has been a strong voice in the fight for debating the Canada-China FIPA in Parliament. “The treaty was cleared for Mr. Harper to ratify it at any time, starting November 2, after 21 sitting days of having the treaty tabled in the House of Commons. I’ve made several attempts to force a debate on the issue unsuccessfully,” said May in an interview with the Martlet. On Oct. 1, May pushed for an emergency debate. She tried again on Oct. 29, but both times the Speaker of the House of Commons turned her down.
Maclean’s magazine asked Minister Fast in a recent interview why the agreement was not put to vote in Parliament. “The opposition parties have Opposition days to debate any subject they see fit,” said Fast. “What’s interesting is that even though they have been making noises about wanting to debate it, this week they had two opportunities to debate it on their days and they have chosen not to, which tells you how seriously they take trade and investment.”
“I would have used an Opposition day if I’ve been entitled to use one — no question about it. It’s only because I don’t have enough members in the Parliament yet, so I don’t have the right to use one,” answered May when we asked why the topic hadn’t been brought up by her at these occassions.
Though the Canada-China FIPA might seem like a sudden development, it has been planned since 1994, when the first negotiations about the agreement started. Negotiations were postponed until after China entered the World Trade Organization (WTO) in 2001. In 2004, negotiations between Canada and China concerning the FIPA continued and were concluded this year in February. However, since the signing in September, this investment deal, which is considered to be the most important agreement since NAFTA, has not been debated in Parliament.
“Normally, a treaty of this type would come before the House for a vote even though a vote is technically legally not required. Previous prime ministers submitted treaties of this type to the House and the Senate for votes after a debate,” said May.
A Foreign Investment Promotion and Protection Agreement is a binding treaty that regulates how a host government treats foreign investors and investments. So, in this case, Canadian investors in China should theoretically be more protected and provided with a clear legal framework on which they can rely when doing business in China. The same applies to Chinese investors in Canada.
In his October Maclean’s interview, Minister Fast said, “For businesses looking to set up in China, ‘most-favoured nation’ status will apply. In other words, China cannot treat us less favorably than they would any other outside companies looking to set up in China.”
“I’m very much opposed to this agreement,” said May when asked if her fight is mainly for a debate or also against the treaty itself. She referred to specific articles in the Canada-China FIPA to which she is particularly opposed: article three, which states that contracting parties (Canada and China) should encourage foreign investment; article 10, which regulates expropriation; and article 33, a list of general exceptions.
May is also concerned about the long duration of the treaty and its exit regulations. “This is a very hard treaty to exit, because you have to give one year of written notice to exit, and then any existing Chinese investments are protected for a further 15 years, even after you leave the treaty. And the first term of the treaty before you can ask to exit is 15 years.” In total, Chinese investments in Canada and Canadian investments in China would be protected by the Canada-China FIPA for 31 years at a minimum.
“The Canada-Panama trade deal went to a vote just this week, and I find it extraordinary that we’re debating a deal with Panama, where we have a net volume of trade of less than $100 million, and not debating the Canada-China treaty, where we have a volume of trade in the billions, $34 billion at this point,” said May.
The Martlet contacted Foreign Affairs and International Trade Canada for comment, but no comment was given as of press time.
You can read the Canada-China FIPA here.
