International Trade Committee on Oct. 18th, 2012

[Devinder Shory, Conservative, Calgary Northeast, AB]

Thank you.

We understand that China will be the largest economy in 2020 or so. China has not signed similar FIPA agreements with anyone else. This is a great door opening for our investors and our businesses and, in turn, creates jobs here back home.

The primary benefit of an investment protection provision in a trade agreement is the creation of certainty and stability for the investors in foreign countries, in this case for Canadians in China.

Has DFAIT conducted any economic analysis of the costs and benefits of this agreement regarding the promotion and reciprocal protection of investments?

[Ian Burney]

The office of the chief economist at DFAIT does quite a lot of econometric work to try to quantify the value of trade agreements by measuring and estimating the impact of removing tariffs, but frankly, it's quite difficult to try to come up with a quantitative value on creating stability with respect to a regulatory regime, so there isn't a quantitative assessment of the value.

However, the fact that the obligations are meaningful, the fact that there's access to investor-state arbitration, and the fact that it's supported as strongly as it is by the business community all lead us to believe that the stakeholders that this measure is intended to benefit think that there is considerable advantage to having the agreement.

[Devinder Shory, Conservative, Calgary Northeast, AB]

I believe my colleague asked a question about input, but I don't know if he asked this question. What is the feedback from the investors or potential investors?

[Ian Burney]

There have been public expressions of support from the Canadian Manufacturers and Exporters, from the Canadian Chamber of Commerce, from the CCCE, from the Asia Pacific Foundation of Canada, from the Canada China Business Council, and the list goes on, including a number of the larger companies that have investments in China now.

I'm not aware of any negative commentary that's come from the business community in Canada.

[The Chair, Conservative, Rob Merrifield]

Okay. Thank you very much.

Go ahead, Mr. Davies.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

Following up on Mr. Shory's line of questioning, the Conservative government has 21 sitting days in which to call this matter before the House, if it so chooses, and have a debate and a vote in the House of Commons, for any Canadians who may want to read the record.

There was a motion put before this committee to have the matter brought before this committee. I'm not at liberty to tell anybody what happened there, but suffice it to say that this issue is not on the business of this committee after the meeting we conducted.

Do you consider this to be a major deal, Mr. Burney? Is this a major accomplishment, in your view?

[Ian Burney]

I think that the Canadian business community considers this to be a significant deal and an important one for business interests.

[Don Davies, NDP, Vancouver Kingsway, BC]

Do you agree with them? Do you agree that this is a significant deal to Canada?

[Ian Burney]

I think I said in my opening statement that this is an important milestone in the Canada-China relationship.

[Don Davies, NDP, Vancouver Kingsway, BC]

You've already pointed out that it took 18 years.

[Ian Burney]

Well, I should clarify that it wasn't 18 years of negotiation. We're not that slow.

[Don Davies, NDP, Vancouver Kingsway, BC]

No, it's been eight straight—

[Ian Burney]

Yes, it has been 18 years since we started, but there were large gaps when we were not actually negotiating because China was focused on its accession to the WTO.

[Don Davies, NDP, Vancouver Kingsway, BC]

But we first started raising this issue in 1994 with China. I'm led to believe there's been focus on this for the last eight years. Would you agree with that?

[Ian Burney]

It was picked up again in 2004, yes.

[Don Davies, NDP, Vancouver Kingsway, BC]

That's eight years by my math.

[Ian Burney]

I said yes.

[Don Davies, NDP, Vancouver Kingsway, BC]

Okay. Would you agree with me, then, that tabling a document in the House of Commons and leaving it there for 21 days is not a sufficient period of time to scrutinize, get official stakeholder input, and study the impact of what you've acknowledged as a significant deal that has taken years to negotiate?

You've commented that there have been public expressions. Would you not agree with me that it would be beneficial to the Canadian public to hear from all the stakeholders in an organized way and for Parliament to study the ramifications of this deal before we go ahead and sign it and make it binding for the next 31 years?

[Ian Burney]

Well, with all due respect, I think it's not appropriate for an official to respond to a question about what the appropriate—

[Don Davies, NDP, Vancouver Kingsway, BC]

I wouldn't respond to that question if I were you either, sir.

[Voices]

Oh, oh!

[Don Davies, NDP, Vancouver Kingsway, BC]

Now, you agree that this agreement will be in force and bind Canada for 31 years. Is that right?

[Ian Burney]

No, the agreement has an initial period of 15 years, at which point it could be terminated on one year's notice. It would thereafter continue to apply for a further 15 years only for those investments that were made during the initial period.

[Don Davies, NDP, Vancouver Kingsway, BC]

Right, so all investment in the next 15 years, under this deal, will be bound by this agreement for 31 years.

[Ian Burney]

Well, that's assuming it's made at the start of the period.