Harper test-drives new 'extractive industries' approach to aid in Peru - Macleans.ca

Harper test-drives new ‘extractive industries’ approach to aid in Peru


LIMA, Peru – Prime Minister Stephen Harper meets with mining executives and the Peruvian president this morning as he puts the new “extractive industries” focus of his aid and foreign policy into practice.

He is expected to take questions from the media in the early afternoon — his first since the Senate expenses scandal boiled over on the long weekend.

Until then, however, he will be talking up Canada’s mining companies and their role in developing countries such as Peru.

The new approach was rolled out last fall, and aims to align Canada’s aid spending more closely with its commercial interests — to much consternation from aid groups who fear Canadian business promotion will take precedence over poverty reduction.

At the same time, the policy is meant to encourage ensure Canadian investors uphold high standards when it comes to labour and environment in developing countries.

Peru is one of Canada’s key recipients of foreign aid, and Canadian mining companies have a large presence in parts of the country known for social unrest. So Peru — as well as Tanzania — is a key testing ground for the extractive industries orientation of foreign policy.

“It’s still very conceptual,” said Ottawa-based trade analyst Laura Dawson.

Canadian direct investment in Peru was $6.9 billion in 2012, much of it in the natural resources sector.

And while many Canadian aid activists want to see mining companies treat their foreign labour fairly, they are leery about how Harper will use the new approach.

“From my perspective, Harper is pursuing the wrong policy in Latin America,” said Jen Moore of MiningWatch Canada.

The Canadian government is now seen as a representative of Canadian mining companies in the region, she said, “aimed at maximizing profits and investor protections for mining companies at the expense of people and the environment.”

While in Peru, Harper hopes to also discuss whether Canada should be participating in the Pacific Alliance free-trade talks.

Peru has been a strong advocate to get Canada at the table, and Canada now has observer status. But neither the alliance — Mexico, Colombia, Chile and Peru — nor Canada is sure whether Canada should actually take the plunge.

Harper will spend all day Thursday in Colombia at a Pacific Alliance summit, checking out the talks to see what Canada would gain from joining them.

Canada already has free-trade agreements with all four Pacific Alliance countries, but the new pact aims to go beyond trade in goods to include free movement of labour, capital and investment as well.

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