John Ivison’s latest column is mostly about the
F-35 F-18 replacement F-35, but it includes a bit about the CNOOC-Nexen deal as well.
“The public seems to appreciate that the takeover of a relatively minor player, for a whopping premium, at a particularly ticklish time in the Canada-China trade relationship was a prudent move. The government will now use this as a bargaining chip in the attempt to strike a more reciprocal rapport with the Chinese, as we move toward exploratory talks on a broader free trade agreement.”
The notion that CNOOxen is a “bargaining chip” is one we’ve seen fairly frequently lately. From the Globe:
“Senior federal government officials told The Globe and Mail that Prime Minister Stephen Harper has been increasingly concerned with how Canada might gain more bargaining power to open up markets for Canadian companies in China. The Conservatives, they say, feel that the two-way investment relationship is overwhelmingly in Beijing’s favour right now.”
And from, well the Globe:
“People close to the federal government said the idea of gaining more leverage with foreign governments came to be a key factor in Mr. Harper’s thinking.”
It’s too bad the government had to use a Chinese takeover of a Canadian energy firm as the long-sought bargaining chip. It’s too bad the government didn’t have some sort of treaty that could protect Canadian investors in China hey waitaminnit —
For indeed the government has spent very nearly all of Calendar Year 2012 proclaiming it has just such a treaty in hand: the notorious Canada-China Foreign Investment Protection and Promotion Agreement, or FIPA.
“The Government of Canada is committed to creating the right conditions for Canadian businesses to compete internationally,” the above-linked news release says. “An important part of this equation is ensuring that two-way investment between Canada and other countries can take place in a stable, secure manner… By ensuring greater protection against discriminatory and arbitrary practices, and enhancing predictability of a market’s policy framework, a FIPA allows investors to invest with greater confidence.”
Well, why play chicken with Chinese takeovers if the FIPA gives what’s needed? Because, as some of us have pointed out, it probably doesn’t. Most of the criticism of the Canada-China FIPA, especially from Canadian nationalist groups, has been around the notion that it’s a Trojan-horse thingie designed to give the Chinese nefarious and irrevocable access to Canada’s precious bodily fluids. But what stood out to me was the very shaky market access protection it provides prospective Canadian investors in China. The government’s once-removed off-the-record rhetoric this week suggests that analysis was not mine alone.
There’s a little mystery that persists with the FIPA. It’s been subject to ratification by order-in-council decree since 21 sitting days after it was tabled in the Commons — so, for several weeks now. But the Harper government hasn’t ratified it. The government press release I linked above suggests a plausible and fairly innocent reason: it suggests Canada will ratify the FIPA once “the ratification process” in China has completed. So it’s possible that there’s no point ratifying FIPA now until the Chinese do.
But the notion that we are waiting on the Chinese authorities to ratify the treaty is a little embarrassing too, because it suggests we’re not the ones with leverage.
I want to be clear that I’m not endorsing most of the FIPA apocalypse chatter that’s coming from the Council of Canadians’ corner of the chessboard. I don’t see the FIPA as a serious surrender of Canadian sovereignty. But neither do I see it as an effective tool for forcing any surrender of Chinese sovereignty, even one of the sort that would force the Chinese to act like most of Canadian businesses’ other investment destinations. This treaty seems like half a loaf. And again, not only to me.