Friday, November 2, 2012

Compensating bad decisions with worse solutions

I have to question the motives of those who are proponents of the FIPA deal. Is it just a misunderstanding? An underestimation of the risks? I've noticed numerous articles claiming the incredible number of legitimate concerns over this deal are simply hype, or fear-mongering. Proponents insist deals like this are needed to adapt to the market, often leaving out it is previous bad decisions which have set the stage for the worse decisions now being made.

It's not just about China, either, although the fact it is China certainly adds many concerns, specifically in the national security areas. The idea that corporations (not countries) can challenge and sue for laws passed by those people has been a part of free trade deals since their inception. People seem so focused on the fact we might be paying fines, everyone seems to be overlooking the mechanics of how such fines are paid and arbitrated as that aspect is truly the worse part. People must understand that 'China' is being used as an umbrella term only because these current concerns involve state-owned companies.

Typically, free trade deals give corporations the ability to challenge a country's laws, a province's laws, or even a city's laws if they feel it interferes with their profit. They take these complaints to unelected bodies which can then go ahead and decide what actions to take to force a country's hand. The fact the Chinese companies are state owned simply adds an additional layer to this affront to democracy in Canada which is that the Chinese state will have direct access to an unelected body which overrides all of the citizens and all of the governments in Canada. This isn't about China-phobia, it's about the fact that China, like us, can be expected to act in their own interest - just as we would, or want to but won't be able to.

Canadian Trends: There is no Canada, only Zuul

The national security issues bring a whole new extreme. CSIS has warned about security risks from China, do you think it's because they are China-phobic? Chinese espionage is rampant. China is not expanding it's assets simply to grow, China is growing it's assets to be self-sufficient for when the plug is finally pulled on the USD. Max Keiser reported yesterday that it's now been confirmed that despite China's massive number of gold mines: not a single bar has been put into the market! They are keeping all of it. China is only playing the capitalist game because strategically it services them to do so.

Another national security consideration is the fact that we are going to have to balance a tense relationship between China and the U.S. which is only going to become more-so as the Japan-China relationship also intensifies. Does it seem intelligent to essentially put our revenue dependence on the shoulders of two opposing massive economies? Both which require huge amounts of energy to keep their massive economies away from the verge of collapse they currently sit on?

Let's sit back and ask ourselves, again, why exactly we are pushing so fast for this new relationship? Well because the resources to extract the oilsands outweighs the resources Canadians have. We need China to counter-balance lost business from the U.S as we never actually did have the resources to extract them to scale. Trade like this with China is simply a worse solution to a bad decision in the first place.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

6 comments:

  1. "They take these complaints to unelected bodies which can then go ahead and decide what actions to take to force a country's hand."

    That is true of our civil and criminal justice system, too. For example, the unelected Supreme Court has overturned acts of parliament many times in the past and can be expected to do so again.

    The fundamental failure of trade agreements such as FIPA is that they establish a privileged class known as investors. These so-called trade agreements do not protect human rights, labour rights, environmental rights, indigenous people's rights, nor any other rights other than investor rights. Investor rights expressed exclusively in terms of monetary value, are also exclusively protected.

    Further, these are not trade agreements in the sense of establishing rules of trade and exchange. Instead, they are corporate agreements which protects, again, the investor class from democratic control that could impede an investor's ability to extract a profit from their investment. For example, today, a nation such as South Africa could be subject to litigation by global mining interests over abolishing Apartheid.

    "... because the resources to extract the oilsands outweighs the resources Canadians have."

    That's not at all true. What the Harper government is attempting to do is secure markets for Canada's dirty oil in order to further ramp up production. We clearly have the resources to strip mine an ancient and incredibly important forest at an industrial scale.

    I don't accept the national security argument at all. The true threat to Canada's and the world's well being is burning that carbon irrespective of where and by whom.

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  2. From my post "There is no Canada, only Zuul" (http://canadiantrends.blogspot.ca/2012/06/there-is-no-canada-only-zuul.html)

    A panel of international arbitrators ruled 2-1, with the Canadian appointee dissenting, that research-spending rules imposed by Newfoundland’s oil regulator in 2004 were “performance requirements” forbidden by NAFTA.
    The decision, which was first reported on the New York-based website Investment Arbitration Reporter, has not been publicly released. The results were confirmed by an Exxon source.
    The case is a win for oil companies in their tug-of-war over revenues with the government of Newfoundland and Labrador, which reached a high point under combative former premier Danny Williams.
    But it also illustrates how Ottawa always ends up with the bill when provinces violate the terms of trade agreements that they didn’t sign. In 2010, the federal government paid out $130-million to AbitibiBowater Inc. after Newfoundland expropriated the company’s timber and water rights. Several other current NAFTA challenges involve provincial policies.


    "A Panel of international arbitators" <- Unelected non-governmental body. This differs from the judicial branch.

    Second point: "Further, these are not trade agreements in the sense of establishing rules of trade and exchange. Instead, they are corporate agreements which protects, again, the investor class from democratic control that could impede an investor's ability to extract a profit from their investment. For example, today, a nation such as South Africa could be subject to litigation by global mining interests over abolishing Apartheid."

    This is exactly what I say:

    "Typically, free trade deals give corporations the ability to challenge a country's laws, a province's laws, or even a city's laws if they feel it interferes with their profit"

    As for point 3: No, Canada does not have the resources to mine the oilsands, and we never have. They have not been, nor ever will be economically viable. The 3:1 EROEI ratio determines that no matter what the price of oil we will always need a higher price and now that the exponential rise in prices is over the real costs of extraction are becoming apparent. I've writen extensively on this concept on this blog, the latest of which is linked in my post which links to a report about an internal memo in which the government itself is worried about the costs of extraction.

    Point 4: I don't think you understand why what I claim is a national security threat is a national security threat. I'm not talking about emissions here. I'm talking about the sorts of trade deals and tensions that have historically lead to war. The currency devaluation wars in progress right now speak to this situation.

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  3. So we agree it is not a trade agreement but an investment treaty. Much of the rest is semantics.

    Our judicial system is independent of government and unelected. The problem with the arbitration system is the narrow terms of reference and the lack of an appeals process to judicial review.

    That fact that the tar sands in uneconomical doesn't mean that Canada does not have the resources, capital and labour, to exploit the resources. The intelligence in doing so is another matter.

    I do understand what you mean by a national security threat. I just don't think it matters. I don't believe China is any more a threat to Canada than the US and if those two global powers decide to go to war, Canada will be firmly on the side of the Empire as it has been historically and will do what it is told.

    But war with China is more a matter of hyper-speculation than reality. Neither the US nor China can afford it. However, climate change is a sure thing. So we can worry about the US and China facing off over the Pacific while the pot boils, or we can say a pox on both their houses and do the right thing by keeping the bitumen in the ground where mother nature captured and stored it for free.

    Have a great day and appreciate the chat.

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  4. These arbitration panels are not "independant" of our government, they are independant of our country. Understand the difference here is essential, this panel consists of people who have no vested interest in Canada at all. "International" panel. The judicial system is a part of our governmental system - international trade arbitrators who rule by fiat are not. This means people from *OTHER* countries have more say on our laws than we do.

    I am not at all positive that we would side with the U.S. shoudl the trade situation escalate. -> http://canadiantrends.blogspot.ca/2012/05/canada-may-be-secretly-preparing-to.html


    Its not just about war, either. We depend both on the U.S. and China for goods. Now, lets say the U.S. severely sanctions China, but Canada has commited to a trade deal and protection with them. Who's side do we chose? Do we respect the U.S. sanctions? Or do we risk our own sanctions? There are many considerations here, it's fine to say we can just write them all off because of emissions etc, but no.. the reality is these decisions all matter, in progression. Ever action has a reaction, and understanding the results of these reactions is imperative for Canadians.

    Glad you enjoyed commenting, and please continue. Not nearly enough comment, and I always welcome debate.

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  5. I really appreciate the essay.. and the commenting (chat) really illuminates the tactical situation. Props to both of you. I'll throw in my 2 cents if you don't mind.. Which is, that fundamentally the process of the treaty really bothers me.. and obviously I'm not alone on that.

    There is so much previous evidence that this runaway government does not respect its task as Public Service.. to openly and honestly look after the wishes, the beliefs, the needs of its electorate, or of Canada. Its instead, simply moving on with its (or Stephen's) agenda.. Or both.

    How should we perceive such a treaty, strangely and stelathily signed in Russia, with the Chinese, by a Prime Minister, the Head Public Servant? He's that proud of it? I don't think so... The secrecy, obstruction and the jam it down the throat majority tone emanating from The Harper Government is alarming. Do they actually have our confidence? Worse.. do they care?

    We already know that losing the confidence of Parliament is irrelevant to them. Proroguing is like extra strength tylenol for a flailing government in pain. Or Etch a Sketch. What does this tell us? That Parliament does not reflect Canada or Canadians ? There is Legislation or theory to support this view?

    So many questions.. and not enough answers.. or evidence to base our considerations on. The entire cascade of policy, budget, economic experiment, treaties, masked by secrecy and obstruction.. suddenly comes out of the Conservative omnibus majority spillway... as Peter Kent fiction that fish habitat does not need protection and we should poison wolves. Haida elders are eco-radicals funded by foreigners says Joe Oliver, an investment banker. Fracking does not need regulation, F35's will cost.. well we don't know yet. John Baird rants on the UN or whatever Harper points him at. An election promise never to export dilbit to polluting nations strangely evolves into a declaration that the pipeline to China shall be built on Cabinet's say so.. Navigable Waters is only about a few bodies of water, many of them in Tony Clement's riding.

    The election itself.. its like an intentional radon gas poisoning perpetrated in over 200 electoral ridings and we're still trying to comprehend the reasons, the delivery mechanism, treat the victims.. and ideally, discover who is at fault. All this.. while saddled by a theocratic blustering majority government that emerged with a group sneer from the toxic election and denies there was ever a poisoning.

    Don't put the cart before the horse, gentlemen .. Before you weigh the pros and cons of far reaching, resource related treaties, with intense ecological, legal aspects that are far from understood.. weigh the ethics, intelligence, sanity, coherence and legitimacy of its promoters.

    This is a government who's Prime Minister says its does not support motions reopening abortion or pro-life discussion, yet a majority of its MP's and Minister voted in support of such motions.. Huh ?

    Perhaps Stephen Harper goes home after a hard day's work.. and tells his wife how he won some battles, lost others.. but he fleeced the Chinese.. really took them to the cleansers ....

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  6. This is changing into a discussion about what bodies are served by such deals and which are denied. The names of the supposed entrants to these deals change, but the beneficiaries do not. The only bodies or apparatus which possess the ability to transgress all lines of nationality across so-called treaties are the multi-national corporate behemoths that champion the cause.
    The houseguests are creating a system where they have residency without consequence in every house in town. The landlords are scrambling to prevent being left out of the accomodation market because they think they have to. All landlords are beholden to their guests. The Chinese landlord has simply established an agreement of sharing with their native traveling tenants. It is a hedge against complete subservience to all tenants.
    Left at the bottom of the pile, as usual, are the housekeeping staff. The live-in labour of every house being rented out. House management changes the working conditions of the staff, pointing to competition and rental-friendly conditions as the road to generating more rental income. It is a vague and baseless argument by them. The landlord has no clothes.
    In my view, only a complete and determined general strike by the house staff of multiple hosts will exacerbate the demands of the traveling guests.

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