Canada-China Promotion and Reciprocal Protection of Investments Agreement

Last updated

Canada China FIPA
Canada-China Promotion and Reciprocal Protection of Investments Agreement
Signed2012
Effective2014

The Canada-China Promotion and Reciprocal Protection of Investments Agreement or Canada China FIPA is a bilateral investment treaty between Canada and China which came into force on 1 October 2014. [1] [2] The Foreign Investment Protection Agreement (FIPA) or Foreign Investment Protection and Promotion Agreement (FIPPA) are Canadian names for BITs.

Contents

Nomenclature

The short name of the Agreement Between the Government of Canada and the Government of the People's Republic of China for the Promotion and Reciprocal Protection of Investments used by Global Affairs Canada is the Canada-China Promotion and Reciprocal Protection of Investments Agreement. [2] McCarthy Tétrault referred to the agreement as the China-Canada BIT. [3] In Canada, the name for Bilateral Investment Treaties is Foreign Investment Protection Agreement (FIPA) or Foreign Investment Protection and Promotion Agreement (FIPA). [Notes 1] Corporations that engage in bilateral trade can use FIPAs to protect against public policies that interfere with their operation's revenue. [4] [Notes 2]

The Council of Canadians referred to the agreement as the Canada-China FIPA. [4] Hupacasath First Nation and other First Nations organizations referred to it as the Canada China FIPPA. [4]

Notable obligations and clauses

The Canada China FIPA ties Canada "to the terms of the agreement for a minimum of 31 years." [5]

The three core Canada China FIPA substantive obligations include "non-discriminatory treatment", "fair and equitable treatment", [6] and "compensation for expropriation". [3] According to a 2012 Foreign Investment Law Journal article, Canada's 2012 FIPPA model, links "fair and equitable treatment" to "The Minimum Standard of Treatment" customary in international law. This ensures "fair and equitable treatment and full protection and security in accordance with the principles of customary international law." [7]

Concerns were raised regarding the provision for national treatment in Article 6 because the CCPRPIA did not provide for pre-establishment national treatment (a right of entry into the Canadian or Chinese markets for investors of the other country). This could disproportionately favour Chinese investors in Canada because China places more onerous requirements on foreign investors for the registration and approval of new enterprises than does Canada, [8] and because government screening in China involves numerous levels of bureaucracy for new companies. [9] : 12 and 48 

Investor-State Dispute Settlement

Article 15 provides that investors of one country are permitted to sue the government of the other country through an international tribunal. [9] : 23  [10] Corporations from either country can sue if the country in which they have their operations has public policies, even those intended on protecting the environment, health, or safety, that the corporation says "interferes with the corporation’s profitability". [9] : 23  [5] Canada's risk of such lawsuits is much greater than China's, since "China's foreign direct investment in Canada is much higher than Canada's in China." [5] By 2015, Chinese foreign direct investment in Canada was roughly three times the amount of Canadian investment in China. [9] : 23 

According to a 2014 article published by Osler, the Agreement provides safeguards to Canadian investors in the Chinese economy. The article also said that the agreement was one of China's first investment treaties with such comprehensive dispute settlement provisions. [11] [Notes 3] [Notes 4] [Notes 5]

Background

The Harper government concluded negotiations on the treaty in 2012, amid concerns surrounding human rights abuses in China. [12]

FIPA was signed by Harper in Vladivostok, Russia in 2012. [1]

On 18 January 2013, the Hupacasath First Nation of British Columbia filed a court application to stop the Harper administration from ratifying the Canada China FIPA until consultations with First Nations on potential impacts of the FIPA took place. First Nations were concerned about the FIPA's Investor State Arbitration (ISA) clause. [4]

While Canadian trade officials said in 2014 that FIPA was "unremarkable" and that it was a continuation of "Canada's past foreign investment promotion and protection practice, a 2014 Canadian Yearbook of International Law article described FIPPA as "novel" as it was "non-reciprocal in favour of China". [13] The Yearbook article said that FIPPA provides a "general right of market access by Chinese investors to Canada but not by Canadian investors to China." [13] China was given a "wider scope for investment screening" than Canada. [13] The agreement did not include a "long-standing Canadian reservation for performance requirements that favour Aboriginal peoples". [13] It diluted "Canada's established position on transparency in investor-state arbitration". [13] These and other textual aspects of the China FIPPA are highlighted in comparison to other trade and investment treaties, especially those to which Canada is a party, that provide for investor state arbitration. [13]

Elizabeth May said that the FIPA posed a threat to Canadian sovereignty. May described the negotiations as "secretive". The terms of the agreement were not released until after the Harper government fell. Critics said that some of the terms were considered unfavourable to Canadian investors and citizens. [14]

The Canada China FIPA has been in force since 1 October 2014. [1]

By 2017, the Canada China FIPA remained unfamiliar to most Canadians, even investors, according to the Canada China Business Council Rotman Institute for International Business. The Rotman Institute said that the agreement provided considerable certainty for those investors who are familiar with it. [15] : 6 

The CCPRPIA was mentioned by Elizabeth May in the second French leadership debate of the 2019 Canadian federal election on 10 October.

Notes

  1. ↑ According to McCarthy Tétrault, Canada entered into Foreign Investment Promotion and Protection agreements with Argentina on 29 April 1993, Ecuador on 6 June 1997, Venezuela on 28 January 1998, Uruguay on 2 June 1999, and Peru on 20 June 2007.
  2. ↑ Chapter 11 in North American Free Trade Agreement (NAFTA) represented Canada's first FIPA. according to the Council of Canadians.
  3. ↑ As per Article 22 of the CCPRPIA, investors may submit claims either to UNCITRAL or to ICSID.
  4. ↑ The CCPRPIA is the first of China's investment treaties to provide for full post-establishment National Treatment (subject to any regulations and practices which were already in place, as per Article 8.2(a)(i)).
  5. ↑ China's investment agreement with Seychelles included full post-establishment national treatment prior to the CCPRPIA, but it has not yet entered into force.

Related Research Articles

In international economic relations and international politics, most favoured nation (MFN) is a status or level of treatment accorded by one state to another in international trade. The term means the country which is the recipient of this treatment must nominally receive equal trade advantages as the "most favoured nation" by the country granting such treatment. In effect, a country that has been accorded MFN status may not be treated less advantageously than any other country with MFN status by the promising country.

Bilateralism is the conduct of political, economic, or cultural relations between two sovereign states. It is in contrast to unilateralism or multilateralism, which is activity by a single state or jointly by multiple states, respectively. When states recognize one another as sovereign states and agree to diplomatic relations, they create a bilateral relationship. States with bilateral ties will exchange diplomatic agents such as ambassadors to facilitate dialogues and cooperations.

<span class="mw-page-title-main">Dominican Republic–Central America Free Trade Agreement</span> Free trade agreement

The Dominican Republic–Central America–United States Free Trade Agreement is a free trade agreement. Originally, the agreement encompassed the United States and the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua, and was called CAFTA. In 2004, the Dominican Republic joined the negotiations, and the agreement was renamed CAFTA-DR.

A bilateral investment treaty (BIT) is an agreement establishing the terms and conditions for private investment by nationals and companies of one state in another state. This type of investment is called foreign direct investment (FDI). BITs are established through trade pacts. A nineteenth-century forerunner of the BIT is the "friendship, commerce and navigation treaty" (FCN). This kind of treaty came in to prominence after World Wars when the developed countries wanted to guard their investments in developing countries against expropriation.

Intellectual property rights (IPRs) have been acknowledged and protected in China since 1980. China has acceded to the major international conventions on protection of rights to intellectual property. Domestically, protection of intellectual property law has also been established by government legislation, administrative regulations, and decrees in the areas of trademark, copyright, and patent.

The Multilateral Agreement on Investment (MAI) was a draft agreement negotiated in secret between members of the Organisation for Economic Co-operation and Development (OECD) between 1995 and 1998. It sought to establish a new body of universal investment laws that would grant corporations unconditional rights to engage in financial operations around the world, without any regard to national laws and citizens' rights. The draft gave corporations a right to sue governments if national health, labor or environment legislation threatened their interests. When its draft became public in 1997, it drew widespread criticism from civil society groups and developing countries, particularly over the possibility that the agreement would make it difficult to regulate foreign investors. After an intense global campaign was waged against the MAI by the treaty's critics, the host nation France announced in October 1998 that it would not support the agreement, effectively preventing its adoption due to the OECD's consensus procedures.

The Energy Charter Treaty (ECT) is an international agreement which establishes a multilateral framework for cross-border cooperation in the energy industry, principally the fossil fuel industry. The treaty covers all aspects of commercial energy activities including trade, transit, investments and energy efficiency. The treaty contains dispute resolution procedures both for States Parties to the Treaty and as between States and the investors of other States, who have made investments in the territory of the former. Full versions of the treaty, both consolidated and official, are readily accessible.

<span class="mw-page-title-main">Hupacasath First Nation</span> Place in British Columbia, Canada

The Hupacasath First Nation is a First Nations government based in the Alberni Valley on the west coast of Vancouver Island in British Columbia, Canada. It is a member of the Nuu-chah-nulth Tribal Council. An alternate spelling of Hupacasath is Opetchesaht or Opitchesaht. Hupacasath First Nation consists of approximately 300 members across five reserves.

<span class="mw-page-title-main">Foreign direct investment in Iran</span> Investment in Iran

Foreign direct investment in Iran (FDI) has been hindered by unfavorable or complex operating requirements and by international sanctions, although in the early 2000s the Iranian government liberalized investment regulations. Iran ranks 62nd in the World Economic Forum's 2011 analysis of the global competitiveness of 142 countries. In 2010, Iran ranked sixth globally in attracting foreign investments.

An international investment agreement (IIA) is a type of treaty between countries that addresses issues relevant to cross-border investments, usually for the purpose of protection, promotion and liberalization of such investments. Most IIAs cover foreign direct investment (FDI) and portfolio investment, but some exclude the latter. Countries concluding IIAs commit themselves to adhere to specific standards on the treatment of foreign investments within their territory. IIAs further define procedures for the resolution of disputes should these commitments not be met. The most common types of IIAs are bilateral investment treaties (BITs) and preferential trade and investment agreements (PTIAs). International taxation agreements and double taxation treaties (DTTs) are also considered IIAs, as taxation commonly has an important impact on foreign investment.

<span class="mw-page-title-main">Comprehensive Economic and Trade Agreement</span> Canada–EU free trade agreement

The Comprehensive Economic and Trade Agreement is a free-trade agreement between Canada and the European Union and its member states. It has been provisionally applied, thus removing 98% of the preexisting tariffs between the two parts.

Investor–state dispute settlement (ISDS), or an investment court system (ICS), is a set of rules through which countries can be sued by foreign investors for certain state actions affecting the investments (FDI) of that investor by that state. This most often takes the form of international arbitration between the foreign investor and nation. For the rules to be effective, they must have been agreed upon between the states concerned.

Fipa or FIPA may refer to:

Canadian mining in Latin America and the Caribbean began in the 20th century. Latin America and the Caribbean's vast resources give the region great geopolitical importance, attracting foreign interest for centuries. From the colonial race of European empires, to the multinationals of today's neoliberal capitalist world, this region continues to draw interest. Canada's involvement in Latin America increased dramatically since 1989 with several landmark negotiations and agreements. By 2009, the Canadian larger-company mineral exploration market in this region was valued at US$1.7 billion.

<span class="mw-page-title-main">Free trade agreements of Canada</span> Canadas membership in multinational trade pacts

The free trade agreements of Canada represents Canada's cooperation in multinational trade pacts and plays a large role in the Canadian economy. Canada is regularly described as a trading nation, considering its total trade is worth more than two-thirds of its GDP. Of that total trade, roughly 75% is done with countries that are part of free trade agreements with Canada—primarily the United States through the Canada–United States–Mexico Agreement (CUSMA), and its predecessor the North American Free Trade Agreement (NAFTA). By the end of 2014, Canadas bilateral trade hit Can$1 trillion for the first time. Canada is a signatory to 15 free trade agreements with 51 different countries.

The Canadian Group of the Canada-China Legislative Association (CCLA) is a non-partisan forum for the discussion of bilateral and multilateral issues facing the two countries. The CCLA was established in 1998 and promotes the exchange of information between Canadian parliamentarians, and the National Peoples' Congress of the People's Republic of China in order to encourage better understanding and closer ties between the two countries. There are annual bilateral meetings every fall, between National People's Congress members and the Canadian federal parliamentarians.

<span class="mw-page-title-main">Australia–Korea Free Trade Agreement</span>

The Korea–Australia Free Trade Agreement (KAFTA) is a bilateral agreement seeking to reduce trade and investment barriers between Australia and South Korea. The agreement, which came into effect on the 12th of December 2014 provides Australian goods exporters, service providers and investors with significantly improved access to the South Korean market. The trade agreement stems from decades of bilateral relations, encompassing security, trade and diplomatic ties from 1962, when then President Park Chung-Hee introduced a series of five-year plans designed to spur globalisation efforts and industrial development in Korea following the end of the Korean War.

The Canada–Peru Free Trade Agreement (CPFTA) is a free trade agreement between Peru and Canada. It was signed on 29 May 2008 and entered into force on 1 August 2009.

<span class="mw-page-title-main">Kazakhstan–Netherlands relations</span> Bilateral relations

Kazakhstan–Netherlands relations refer to the bilateral relations between Kazakhstan and the Netherlands. The Netherlands has an embassy in Astana. Kazakhstan has an embassy in The Hague.

Gus Van Harten is a professor of Administrative Law at York University's Osgoode Hall. He is co-editor of the journal Administrative Law — Cases and Materials. He has particular focus on investor-state dispute settlement (ISDS).

References

  1. 1 2 3 Brown, Patrick (19 September 2014). "FIPA agreement with China: What's really in it for Canada?". CBC.
  2. 1 2 "Agreement Between the Government of Canada and the Government of the People's Republic of China for the Promotion and Reciprocal Protection of Investments". Foreign Affairs Canada. 24 November 2016. Retrieved 23 May 2020.
  3. 1 2 Boscariol, John W.; Potter, Simon V. (3 October 2012), "A Primer on the New China-Canada Bilateral Investment Treaty", McCarthy Tétrault, retrieved 23 May 2020
  4. 1 2 3 4 "Canada-China (FIPA) In Depth", The Council of Canadians, 2013, retrieved 23 May 2020
  5. 1 2 3 Bleyer, Gabe (30 April 2020). "Canadian Conservative Leadership Race: Frontrunners Target China". McGill Journal of Political Studies (MJPS). Retrieved 23 May 2020.
  6. ↑ OECD (6 September 2005). International Investment Law: A Changing Landscape: A Companion Volume to International Investment Perspectives. OECD. ISBN   978-92-64-01164-9 . Retrieved 23 May 2020.
  7. ↑ Zhang, Sheng; Gallagher, Norah; Shan, Wenhua (2012). "National Treatment for Foreign Investment in China: A Changing Landscape" (PDF). Foreign Investment Law Journal (FILJ). 27 (1): 136. Retrieved 23 May 2020.
  8. ↑ Huang, Jie (2015). "Challenges and Solutions for the China-US BIT Negotiations: Insights from the Recent Development of FTZs in China". Journal of International Economic Law. 18 (2): 307–339. doi:10.1093/jiel/jgv018.
  9. 1 2 3 4 van Harten, Gus (2015). Sold Down the Yangtze: Canada's Lopsided Investment Deal with China. Toronto: James Lorimer and Company, Ltd.
  10. ↑ Walker, Lauren (15 September 2014). "New Treaty Allows China to Sue Canada to Change its Laws". Newsweek. Retrieved 23 December 2017.
  11. ↑ Riyaz Dattu; Eric Morgan. "Landmark Canada-China Investment Treaty Comes into Force". Osler. Retrieved 23 December 2017.
  12. ↑ Fekete, Jason (8 February 2012). "Canada, China Tighten Trade Ties". Financial Post. Retrieved 23 December 2017.
  13. 1 2 3 4 5 6 Harten, Gus van (2014). "The Canada–China FIPPA: Its Uniqueness and Non-Reciprocity". Canadian Yearbook of International Law. 51: 3–55. doi:10.1017/S006900580001105X. ISSN   0069-0058. S2CID   219339872 . Retrieved 23 May 2020.
  14. ↑ May, Elizabeth. "Elizabeth May: Canada-China Agreement is a Threat to Canada's Sovereignty". Elizabeth May MP. Archived from the original on 12 November 2020. Retrieved 23 December 2018.
  15. ↑ Kutulakos, Sarah; Dobson, Wendy; Hejazi, Walid; Stratulativ, Daniela (25 April 2017). "Canada China Business Survey 2016". Canada China Business Council Rotman Institute for International Business. Retrieved 23 May 2020.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.