Why is the Canada-China Investment Treaty worse than NAFTA Chapter 11??

originally published Friday, May 17th, 2013 in Householders

  1. NAFTA can be exited with six months written notice; the investment treaty with China is in force for 15 years, then Canada or China could give a one year written notice to exit, but all existing investments would be grandfathered for a further 15 years (31 year “lock-in”);
  2. Even though it is egregious that US (or theoretically Mexican) corporations can bring multi-million dollar claims against Canada for laws passed with no intent to discriminate in trade terms, the “investors” from China are not individual corporations.  State Owned Enterprises (SEOs) of the Peoples Republic of China are all branches of the government, with boards and CEOs appointed by the politburo of the Communist Party of China;
  3. Under the Canada-China FIPA all claims begin with six months of diplomatic efforts to resolve the dispute.  Under such a provision, the larger economic party, China, would be able to link all its investments in Canada into a serious threat for economic retaliation. This is not something a US-based firm would be capable of doing under NAFTA, and, in any event, a diplomatic process is not part of NAFTA


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