Canada-China "free trade" harms the public interest of all

February 26, 2016 

Shanghai, the largest Chinese city by population, depends on surface water from the heavily polluted Huangpu River.

The Council of Canadians opposes a "free trade" agreement between Canada and China.

Prime Minister Justin Trudeau will reportedly lead a trade mission to China this March. When then-prime minister Stephen Harper did the same in 2012, he brought with him corporate executives from Enbridge, Canadian Oil Sands Ltd, Cameco Corp, and thirty-seven other Canadian corporations.

The Canada-China Foreign Investment Promotion and Protection Agreement (FIPA) was ratified in September 2014 by the Harper Conservatives with the support of the Trudeau Liberals. At that time, Council of Canadians chairperson Maude Barlow stated, "This investment deal will give Canadian corporations operating in China a tool to fight any improvements in human rights, labour, or environmental standards in that country. Conversely, Chinese investors in the Alberta tar sands will use it to fight higher environmental standards in the Canadian energy sector."

The Canada-China Business Council describes itself as "the leading voice of Canadian businesses in China". Its founding members were Barrick Gold, BMO Financial Group, Bombardier, Power Corporation of Canada, Manulife Financial, and SNC-Lavalin. Its current Board of Directors includes representatives from Export Development Canada and the Canada Pension Plan Investment Board.

In April 2013, the Globe and Mail reported, "China’s Railways Ministry is to be broken... New rail spending – potentially good news for Canada’s Bombardier Inc. – has been promised... There are also promises of a strengthened focus on food safety and health care reform, both identified as opportunities for Canadian businesses by the Canada-China Business Council. ...Indications of a relaxing of limits on foreign investment would be good news for Canada’s financial sector..." The article notes the Bank of Montreal acquired a 19.99 per cent interest in the state-owned investment firm Cofco and that Scotiabank was seeking to purchase a stake in the Bank of Guangzhou.

In Nov. 2012, Mother Jones reported that transnational corporations were showing interest in China's plans to expand fracking. That report noted that Shell has signed agreements with three major Chinese oil companies, and that ExxonMobil, BP, Chevron, and Total were also working to establish partnerships with Chinese oil and gas companies. The article highlighted, "China is ratcheting up its fracking ambitions with virtually no regard for groundwater protection or other environmental safety measures..." Most major US corporations have offices in Canada and could theoretically use that to launch an investor-state challenge against China through FIPA should water protection measures ever be put into place.

The industrialization of China has also consumed massive amounts of water and has contributed to a terrible water crisis there. It has been estimated that 90 percent of groundwater in their cities and 75 percent of their rivers and lakes are polluted and as such some 700 million people drink contaminated water every day. It has also been forecast that by 2020 there could be 30 million environmental refugees in China due to water stress. In 2011, Canada imported about $48 billion in merchandise from China, including mechanical appliances, electrical equipment, washers/dryers, DVD players, and rare earth metals used in plasma screens and portable computers.

And as a net importer of Chinese investment, especially in energy and resources, investment protection provisions pose a real threat to the public interest. The existing investment pact with China notably allows Chinese energy companies to threaten the federal, provincial or territorial governments against imposing environmental rules on tar sands production, pipeline construction and other projects.

On Jan. 15, the Globe and Mail reported, "China wants to forge a historic free-trade deal with Canada, but a senior Chinese official said this will require Canadian concessions on investment restrictions and a commitment to build an energy pipeline to the coast." China's Vice-Minister of Financial and Economic Affairs Han Jun says a maritime energy corridor is still a priority for his government. TransCanada has calculated it could ship tar sands crude to China at competitive prices via the Energy East pipeline and on tankers through the Strait of Malacca and then north through the South China Sea.

We must stand for fairness for workers everywhere, in support of renewable energy, and in defence of the land, water and climate. As Barlow says, "Instead of promoting corporate friendly trade and investment deals that profit only the privileged, Canadians should be standing shoulder to shoulder with the Chinese people seeking better working conditions, improved human rights, and a clean environment in both our countries."

No more trade deals for the 1 per cent.