Liberal position on NDP motion regarding Canada-China FIPA
Update: have a look at this article published September 17, 2014
The NDP Opposition Day motion of Thursday, April 18, is worded as follows:
“That, in the opinion of this House, the government should inform the Government of the People’s Republic of China, that it will not ratify the Canada-China Foreign Investment Promotion and Protection Agreement.”
This motion is, unfortunately, an outright rejection of the Canada-China FIPA and as such is opposed by the Liberal Party of Canada.
The Liberal Party does acknowledge concerns with the Canada-China FIPA. Among these concerns are the long length of the agreement with limited opportunities for termination if it turns out to have an unforeseen deficiency, transparency during the dispute arbitration process, and how to deal with federal responsibility for provincial decisions.
But we also see benefits. For example, Canadian companies will be able to resolve disputes outside of the Chinese courts, in independent arbitration tribunals, and beyond that, China commits to treating fairly any Canadian companies investing in China. These company level benefits reduce business uncertainty and encourage the economy level benefits that can come from mutual foreign investment.
The only way for the Canadian people to properly weigh the pros and cons is to have public scrutiny and debate, and the right place to have that is in a House of Commons committee.
This is the reasoning behind the Liberal Party position on Canada-China FIPA, and that is why we do not support the outright rejection of FIPA embodied in the NDP Opposition motion.
While the Liberal Party has concerns with FIPA, its long-standing position is that the agreement should be studied and debated by Parliament before ratification is considered. The Liberal Party has already acted on this belief in the past, obtaining a one-hour hearing in the International Trade Committee on Canada-China FIPA, but this is nowhere near sufficient.
Foreign investment is expected to be crucial to the future of Canada’s economy. Not only is it a source of capital, but it is also a source of expertise, and access to overseas markets. Canadian investment abroad is also important to our economy. Many people share ownership of these Canadian investments in China through mutual funds or pension funds.
In Kingston and the Islands, the commercialization of technology developed here means job creation and a strong local economy. For some technologies, the knowledgeable and interested investors are to be found in China and not so much in Canada. One example of a company with potential investors in China is Performance Plants, a local bio-technology company that develops plant characteristics such as resistance to drought and heat.
So the importance of foreign investment to our economy should not be taken lightly. A company looking to develop a new technology or resource, if it does not receive financing at the right time and in the right amount, can lose out to better financed rivals, even if it has everything else going for it.
The Canada-China FIPA is the result of talks that began nearly a decade ago. It is the norm for trade and investment agreements to take many years to finalize, and this FIPA is no exception. It is also necessary for these state-to-state negotiations to be conducted with discretion and therefore away from the public square. But it is essential that, before FIPA is ratified, there be public scrutiny and comment about the agreement.
The NDP motion removes the possibility of doing that.