FIPA - borderline treason

[Keepitsimple]

Many, many times and I find academics to be some of the most open-minded people as a whole. Sure there's some stubborn closed-minded one, but I would argue there's far less closed-minded academics than the general public. It is their job, after all, to learn and be open to new ideas and information. Typically they're stubborn and closed-minded when it comes to people who argue nonsense.

That's good to hear. It hasn't been my experience - but maybe I've just been unlucky.

[na85]

Please take your straw man arguments about the open- or closed-mindedness of academics to a different thread.

[PrimeNumber]

I wonder if Canada could now be sued in secret courts if we prevented the Northern Gateway pipeline.

This is exactly the type of thing the FIPA with China supports. PetroChina, China's second biggest oil company and owned exclusively by their government, has huge investments in the billions of dollars in the Northern Gateway. With FIPA they can essentialy sue, in private, any level of government that was involved in the process of the Northern Gateway not going through from federal governments, and provincial governments to municipal government on potential loses. Instead of this hogwash with China we should be focusing on a FTA with Japan which has a lot more benefits for Canadian companies and Canadian buyers by lowering the prices on superior Japanese products like vehicles.

[-1=e^ipi]

Instead of this hogwash with China we should be focusing on a FTA with Japan which has a lot more benefits for Canadian companies and Canadian buyers by lowering the prices on superior Japanese products like vehicles.

Or you could do both...

Both sounds better to me.

[Bonam]

Or you could do both...

Both sounds better to me.

What are the benefits of FIPA for Canadians? You mentioned it might make Chinese companies more likely to invest in Canada... how does this benefit Canadians? Do companies with significant stake controlled by China provide better service to Canadians? Lower prices? More jobs for Canadians? What are the risks and downsides of having major Canadian companies bought up by the Chinese government through its corporate arms? Is the presumed benefit of access to slightly more capital worth all these downsides?

I think free trade deals, and perhaps "investment agreements" as you put it, are generally beneficial when signed between relatively equal partners. On the other hand, deals between radically different countries, such as an advanced Western democracy and a communist developing nation, tend to carry more problems than benefits.

[dre]

What are the benefits of FIPA for Canadians? You mentioned it might make Chinese companies more likely to invest in Canada... how does this benefit Canadians? Do companies with significant stake controlled by China provide better service to Canadians? Lower prices? More jobs for Canadians? What are the risks and downsides of having major Canadian companies bought up by the Chinese government through its corporate arms? Is the presumed benefit of access to slightly more capital worth all these downsides?

I think free trade deals, and perhaps "investment agreements" as you put it, are generally beneficial when signed between relatively equal partners. On the other hand, deals between radically different countries, such as an advanced Western democracy and a communist developing nation, tend to carry more problems than benefits.

I agree. I would rather see a phased approach. The problem with any sort of general FT with China is that we have a lot of upward pressure on the value of our currency as a result of being an oil exporter, and they put a lot of artificial downward pressure on their currency value by printing tons of yuan and using it to buy western treasuries. We are basically rewarding them for a currency manipulation scheme not only designed to put our own producers at a disadvantage but to keep their own people as poor as possible as well.

[PrimeNumber]

Or you could do both...

Both sounds better to me.

One has direct benefits to Canadians and Camadian companies, the other benefits China.

What people fail to see is that Canada's economy will see investment regardless of FIPA. FIPA just gives China an upperhand over all other countries looking to invest, especially because all other FIPA's our government has signed has been with developing economy's, not superpowers. This deal is a slippery slope that could see taxpayer's getting gouged the most.

[-1=e^ipi]

What are the benefits of FIPA for Canadians? You mentioned it might make Chinese companies more likely to invest in Canada... how does this benefit Canadians?

More foreign investment means more physical capital per worker. More physical capital per worker means that workers will produce more goods and services. More goods and services means we are richer and have more money to spend on health care, education, military, or whatever we want.

Lower prices?

Maybe. Idk, depends on the price of what.

More jobs for Canadians?

Most likely.

What are the risks and downsides of having major Canadian companies bought up by the Chinese government through its corporate arms?

The chinese government will act primarily in the best interests of China. Where as a Canadian company will tend to act in the interests of either Canada or Canadian individuals. This means that even if a purchase of a Canadian Company by China is beneficial to the Chinese that want to perform the investment and the Canadian individuals that wish to sell the company overall, it does not mean that the purchase is necessarily beneficial to Canada overall.

This is why the Investment Canada Act has the net benefit test:

http://www.ic.gc.ca/eic/site/cprp-gepmc.nsf/eng/00014.html

Unless the FIPA somehow allows China to circumvent the net benefit test, I have no reason to be significantly concerned.

Is the presumed benefit of access to slightly more capital worth all these downsides?

Probably.

Is the presumed benefit of access to slightly more capital worth all these downsides?

Yes.

I think free trade deals, and perhaps "investment agreements" as you put it, are generally beneficial when signed between relatively equal partners. On the other hand, deals between radically different countries, such as an advanced Western democracy and a communist developing nation, tend to carry more problems than benefits.

They are generally mutually beneficial regardless of if the countries are 'equal' or 'radically different'. The concept of comparative advantage still applies.

http://en.wikipedia.org/wiki/Comparative_advantage

[WWWTT]

I remember when Bush was in power in the US, Harper would always parrot him about the BIG BAD CHINESE COMMUNIST DICTATORSHIP!

What happened Harper?

What happened to all those alleged political prisoners?

What happened to Tibet and the Dali Lama?

Why are you bending your ass over backwards now to kiss theirs?

I guess NATO won't be doing much military exercises anywhere near China anytime in the near future.

These are the golden days of being a conservative in Canada!

I imagine Harper felt like he was drinking his own urine when he signed that deal!!!!

Or maybe he felt nothing? Is that what conservatives feel? Nothing?

WWWTT

[cybercoma]

More foreign investment means more physical capital per worker. More physical capital per worker means that workers will produce more goods and services. More goods and services means we are richer and have more money to spend on health care, education, military, or whatever we want.

You're forgetting the part where more goods and services are only produced when there's more people who have money to buy them.

[PrimeNumber]

You're forgetting the part where more goods and services are only produced when there's more people who have money to buy them.

And in this case the goods are mostly petroleum products which are just going to be shipped back to China to be refined, where they stand to make even more money off if it. This whole deal is a big win-win for a China. We make a little bit of money, no more jobs are created as the jobs and investment would be there regardless of FIPA. Let's think about this for a minute, its raw bitumen, we don't need FIPA deals for raw bitumen people and countries will invest in it without any help from the government..

Edited September 18, 2014 by PrimeNumber

[overthere]

And in this case the goods are mostly petroleum products which are just going to be shipped back to China to be refined, where they stand to make even more money off if it. This whole deal is a big win-win for a China. We make a little bit of money, no more jobs are created as the jobs and investment would be there regardless of FIPA. Let's think about this for a minute, its raw bitumen, we don't need FIPA deals for raw bitumen people and countries will invest in it without any help from the government..

You are dead wrong there.

Two examples: TOTAL pulled out of a massive investment in the oil sands this year, 2014, because their capital earned more investing in oil elsewhere. That cost Canada and Canadians a lot of jobs, very well paid jobs. There is no shortage of oil on the planet waiting for somebody to spend a few billion extracting it..

Longer term, the industrial Heartland area of Alberta had seven upgraders planned as recently as 2007. Now there is exactly one being built, mostly with investment from the AB govt and feedstock coming from the payment-in-kind program. Without that govt involvement (oh don't worry it does not involve CDN taxpayer $) there would be none. Reason for going elsewhere? return on investment.

Capital is transient. You have to provide a secure investment environment or companies won't risk anything. A case in point is Venezuela, which has massive heavy oil deposits and nobody willing to spend a nickel on them, far too risky.

[PrimeNumber]

You are dead wrong there.

Two examples: TOTAL pulled out of a massive investment in the oil sands this year, 2014, because their capital earned more investing in oil elsewhere. That cost Canada and Canadians a lot of jobs, very well paid jobs. There is no shortage of oil on the planet waiting for somebody to spend a few billion extracting it..

Longer term, the industrial Heartland area of Alberta had seven upgraders planned as recently as 2007. Now there is exactly one being built, mostly with investment from the AB govt and feedstock coming from the payment-in-kind program. Without that govt involvement (oh don't worry it does not involve CDN taxpayer $) there would be none. Reason for going elsewhere? return on investment.

Capital is transient. You have to provide a secure investment environment or companies won't risk anything. A case in point is Venezuela, which has massive heavy oil deposits and nobody willing to spend a nickel on them, far too risky.

Not an even close comparison, Venezuela has a heavily currupted nationalized oil industry, that is why no one is investing. Without FIPA china would still be investing in the oil sands, they have beem for years before it and without it will continue to do so. Sure certain projects will be halted or even scraped but trust me the wheels will always be in motion to the pacific ocean.

[-1=e^ipi]

You're forgetting the part where more goods and services are only produced when there's more people who have money to buy them.

Your statement is incorrect. Ultimately, the goods and services available depends on people producing those goods and services. Money is merely a medium of exchange. You don't necessarily need 'more people' to have more goods and services. Japan has been decreasing in population, yet it has more goods and services available every year.

Also, if you increase physical capital per worker, then the marginal product of labour increases. This will increase wages.

[-1=e^ipi]

which are just going to be shipped back to China to be refined, where they stand to make even more money off if it.

Are you implying that this is bad? Economic trade and investment is not a zero-sum game. China benefiting does not mean Canada does not benefit.

no more jobs are created as the jobs and investment would be there regardless of FIPA.

False. Sounds like a lump of labour fallacy. If you make it more profitable for firms to hire people, then they will want to hire people.

TOTAL pulled out of a massive investment in the oil sands this year, 2014, because their capital earned more investing in oil elsewhere.

It doesn't help that the Keystone XL hasn't been built. Or that it is so difficult to build a pipeline in this country.

[PrimeNumber]

Are you implying that this is bad? Economic trade and investment is not a zero-sum game. China benefiting does not mean Canada does not benefit.

False. Sounds like a lump of labour fallacy. If you make it more profitable for firms to hire people, then they will want to hire people.

It doesn't help that the Keystone XL hasn't been built. Or that it is so difficult to build a pipeline in this country.

I'm simply stating it would be better to extract and refine it here. I guess it just depends on who your more comfortable with as a controlling interest in Canadian resources. The point still stands that without a FIPA with China, there would still be interest from China in Canadian resources as well as from numerous countries we don't have a FIPA with. An absence of a FIPA would without a doubt have no effect on the current situation. Whereas a FIPA makes public opinion liable to a company which is just wrong. Business is business, protected business is favoritism. No better than the government bailing out corporations which im sure all you conservative supercapitalists are all for.

[overthere]

Not an even close comparison, Venezuela has a heavily currupted nationalized oil industry, that is why no one is investing. Without FIPA china would still be investing in the oil sands, they have beem for years before it and without it will continue to do so. Sure certain projects will be halted or even scraped but trust me the wheels will always be in motion to the pacific ocean.

Thanks for helping me out and confirming that nations make trade agreements followed by fat investments when they have security under law.

Without FIPA, every medium to large deal China invests in here has a long and dragged out process for approval.

What wheels are those regarding the movement of hydrocarbons from Canada to China btw? Gateway looks dead, Kinder Morgan close to it and BC had missed the boat with LNG.

[overthere]

It doesn't help that the Keystone XL hasn't been built. Or that it is so difficult to build a pipeline in this country.

Expensive to build anything, the product is discounted by factors including lack of pipelines, external factors like Obama +Keystone, and so on.

Canada is rapidly earning a reputation internationally for being unable or unwilling to build infrastructure. Instead, we put oil on trains, ffs!

[cybercoma]

Your statement is incorrect. Ultimately, the goods and services available depends on people producing those goods and services. Money is merely a medium of exchange. You don't necessarily need 'more people' to have more goods and services. Japan has been decreasing in population, yet it has more goods and services available every year.

Also, if you increase physical capital per worker, then the marginal product of labour increases. This will increase wages.

There's only so many cellphones you need. There's only so much lawn care or snow removal you can use. There's only so many pairs of socks or slacks or underwear you're going to buy.

So yeah. The more people with money to buy these things, the more of these things we will need to produce. If you don't think there's a relationship between supply and demand, then I really don't know what to tell you.

[PrimeNumber]

Thanks for helping me out and confirming that nations make trade agreements followed by fat investments when they have security under law.

Without FIPA, every medium to large deal China invests in here has a long and dragged out process for approval.

What wheels are those regarding the movement of hydrocarbons from Canada to China btw? Gateway looks dead, Kinder Morgan close to it and BC had missed the boat with LNG.

What I'm saying is the security is already here through current legislation, FIPA just makes us, the taxpayers, accountable. The energy board already said China will get its oil by 2019, including ideas of re-export through the US. I'm confident a pipeline will happen to the coast, regardless of NG dying, where there is oil there is a way. And who cares if its not to china? Someone else will need it eventually, whats the rush?

[On Guard for Thee]

I suspect Harper is simply making sure he has a good corporate position to fall back on when the voters get done with him next election.

[overthere]

What I'm saying is the security is already here through current legislation, FIPA just makes us, the taxpayers, accountable. The energy board already said China will get its oil by 2019, including ideas of re-export through the US. I'm confident a pipeline will happen to the coast, regardless of NG dying, where there is oil there is a way. And who cares if its not to china? Someone else will need it eventually, whats the rush?

How many times do you need to be told the same thing before it penerates?

There is plenty of oil and gas for sale globally. We have serious compettion, that are not paralyzed in building infrastructure, who lock up customers long term. Anything that goes through the US is vulnerable to their whims. Have ypou ever heard of an enterprise called Keystone? Oil does not magically get out of the ground, levitate to Asia and into our bank accounts. How exactly will China get Canadian oil in any volume by 2019 in the abscence of any effective delivery mechanism?

[-1=e^ipi]

I'm simply stating it would be better to extract and refine it here.

Canada should do what it has a comparative advantage in. If Canada lacks refinery capacity, lacks to infrastructure to get it to market or lacks the capital & labour to make new refineries, then having the oil refined in other countries can make sense. Forcing all oil to be refined in Canada can greatly inhibit oil sands development.

I'm not saying that oil shouldn't be refined in Canada, just that having oil refined in Canada isn't necessarily the best option. If keystone XL were built, using the refineries in Texas to refine oil makes a lot of sense since these refineries have extra capacity and the infrastructure is already build to get the oil to the North American market and to other markets via the Gulf of Mexico.

If you can show that government intervention that encourages domestic building of refineries is in Canada's net benefit (passes the net benefit test) then I'm all for it.

The point still stands that without a FIPA with China, there would still be interest from China

Yeah, but there would be less of it.

Whereas a FIPA makes public opinion liable to a company which is just wrong.

It's morally wrong to implement policies that increase investment and make a country richer? Are you pro-poverty or something?

Expensive to build anything, the product is discounted by factors including lack of pipelines, external factors like Obama +Keystone, and so on.

Canada is rapidly earning a reputation internationally for being unable or unwilling to build infrastructure. Instead, we put oil on trains, ffs!

I know, Obama and the environmental radicals have significantly harmed the Canadian economy for decades. It is very sad.

There's only so many cellphones you need. There's only so much lawn care or snow removal you can use. There's only so many pairs of socks or slacks or underwear you're going to buy.

So yeah. The more people with money to buy these things, the more of these things we will need to produce. If you don't think there's a relationship between supply and demand, then I really don't know what to tell you.

Apparently, you do not understand what the word 'necessarily' means.

[dre]

If you can show that government intervention that encourages domestic building of refineries is in Canada's net benefit (passes the net benefit test) then I'm all for it.

I think it would at least make sense to be able to get our oil to the refining capacity we already have. A sensible proposal would have been to build a pipeline east. Right now Canada imports most of the oil we use from Venezuela, and its refined in Ontario. A pipeline to the east would allow us to stop ALL oil imports which would achieve energy independance. It would also reduce the ammount we export which would take some of the upward pressure off our currency which is making it harder other Canadian industries to survive.

[overthere]

I know, Obama and the environmental radicals have significantly harmed the Canadian economy for decades. It is very sad.

Obama?

No, we've done it to ourselves.