EDITORIAL: A chance
to learn from others
The deal, signed on Sept. 9 and quietly tabled late last month, is to be
ratified, behind closed doors, within just 21 sitting days and without any
public hearings. Legislators on the trade committee were briefed for just one
hour by government officials last week, with no independent witnesses present.
To any Taiwanese who has tracked the style of negotiations between President Ma
Ying-jeou¡¦s (°¨^¤E) administration and China in the past four years, the situation
described above will sound eerily familiar.
However, the deal in question is not the Economic Cooperation Framework
Agreement (ECFA) signed in 2010 after six months of negotiations, or the
investment protection agreement inked on Aug. 9. It is the Foreign Investment
and Protection Agreement (FIPA) between China and Canada, which critics say
requires public scrutiny and risks putting Canada at a disadvantage.
However, the Conservative government of Canadian Prime Minister Stephen Harper
refuses to hold public hearings and seems intent on forging ahead with an
agreement that even its supporters admit contains flaws.
Among the most alarming aspects of the deal are its 31-year lifespan, in
contrast with the six months¡¦ warning necessary for Ottawa to pull out of the
North American Free Trade Agreement (NAFTA), and the failure by Canadian
negotiators to ensure that investors receive ¡§national treatment¡¨ in China,
which means that, at best, Canadian investors in China can expect treatment
similar to that enjoyed by domestic Chinese firms. Moreover, Canada would be
barred from imposing conditions favoring Canadian workers or resources for
projects within Canada and it would be forced to restrict domestic access to
fossil fuels, uranium, forests, fish and all other exhaustible resources in
equal measure to any restrictions placed on exports to China, as Green Party
Leader Elizabeth May said in an Oct. 1 press release.
Needless to say, such clauses are cause for concern when one deals with a
resource-hungry rising power like China, whose state-owned firms are in the
process of acquiring a large segment of Canada¡¦s oil companies and fields, such
as the proposed US$15 billion Nexen deal.
Then there is the clause that allows Chinese state-owned enterprises to sue the
Canadian government for laws, regulations and court decisions that could
¡§interfere with or prevent present or future profits.¡¨ While NAFTA contains
similar provisions, FIPA goes further, as litigation could be done in secret
with special tribunals, in which only the federal government can participate,
leaving local governments and firms out in the cold.
The problem with all this is that investment between Canada and China is likely
to be mostly one-way, with Chinese investment vastly outgunning that from
Canada. This means that the risks are mostly Canada¡¦s.
The Taiwanese government should pay close attention to what transpires between
Canada and China in the coming months and years, as Beijing¡¦s behavior and that
of Chinese companies could provide important clues as to how they might behave
in Taiwan. There are many instances of overlap, in which ¡§unjust¡¨ clauses tend
to favor China, and those could gain in importance as Taipei further opens up
the country to Chinese investment.
It has often been said that Taiwan¡¦s engagement with China can serve as a model
for the international community and as a means to ¡§predict¡¨ Beijing¡¦s behavior.
It is now apparent that Taiwan is not the only country that is facing skewed
agreements. It may not have Canada¡¦s natural resources, but intellectual
property rights and company secrets in key high-tech sectors are just as likely
to be targeted by Chinese investors. Most assuredly, Taiwan can learn a few
things from Canada¡¦s FIPA experience with China.
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