This article originally appeared on the Dogwood Initiative blog.

With final arguments in the Kinder Morgan pipeline review underway in Burnaby, a top Chinese official is using the moment to offer Canadians a deal. During his visit to Ottawa last Friday, Han Jun, China’s Vice-Minister of Financial and Economic Affairs, said the world’s second-largest economy would be willing to sign a Free Trade Agreement with Canada — but only if we build a pipeline to the West Coast.

Signing an FTA, Han suggested, would give Canadian agriculture and energy producers greater access to China’s domestic market. In return, Beijing also wants restrictions lifted on takeovers of Canadian companies by Chinese state-owned enterprises (SOEs).

China has been working to gain access to Canadian oil reserves for more than a decade. As Enbridge’s first partner on Northern Gateway in 2005, state-owned PetroChina pledged to purchase up to half of the pipeline’s capacity, but became frustrated by delays and eventually pulled out of the project.

In the years following, China’s SOEs invested billions into the Canadian oil patch, culminating in the 2013 purchase of Nexen by the Chinese National Offshore Oil Corporation (CNOOC) for $15 billion. (In a tragic coincidence, hours after Han spoke in Ottawa, an explosion at Nexen’s Long Lake facility killed one worker and left another critically injured.)

After the Nexen takeover, which prompted concerns about China’s human rights record, labour practices and one-way approach to investment, Prime Minister Stephen Harper brought in restrictions on future purchases of Canadian firms by Chinese SOEs. Angered by the gesture, the Chinese administration shelved negotiations on a Canada-China trade deal.

Now Beijing is back, once again dangling the prospect of free trade. Right on cue, two friendly think tanks — the Canada-China Business Council and the Canadian Council of Chief Executives — released a report arguing that a trade deal with China would boost Canadian exports by $7.7-billion over the next fifteen years and create 25,000 additional jobs.

“During the term of Prime Minister Justin Trudeau there are rare, historical opportunities between China and Canada,” Han told the Globe and Mail. Here in Canada, influential members of the Liberal family are working hard to prove him right.

Having served as Jean Chretien’s former Deputy Prime Minister (as well as Minister of Finance, Foreign Affairs, and Industry), John Manley is perhaps the most visible former Liberal lobbying for closer economic ties to China. Manley is President and CEO of the Canadian Council of Chief Executives, which co-authored the Canada-China FTA report.

The CCCE’s Chairman is Paul Desmarais Jr., whose day job is Chairman and Co-CEO of Power Corporation of Canada. Having employed at different times Jean Chretien, Paul Martin, and Pierre Trudeau, the late Paul Desmarais Sr. was also the founding Chairman of the Canada-China Business Council, which is the other co-author of the above-cited FTA report.

The CCBC is stacked with Liberal heavyweights. Its current Chairman, Peter Kruyt, works for Desmarais at Power Corporation, while its Vice Chairman is former Liberal Justice Minister Martin Cauchon. The CCBC’s President is Peter Harder, a highly-respected former federal civil servant. When Justin Trudeau needed an experienced set of hands to oversee his transition into government, he called Harder.

None of this is to suggest that further trade with China is in itself a bad idea. But the terms on which we negotiate such a deal must be fair to Canadians, as well as uphold the country’s duties to First Nations. By cheerleading publicly for an FTA, old-guard Liberals like Manley and Desmarais increase the pressure on Trudeau to cut a quick deal on China’s terms.

Don’t forget, any new trade deal would take effect in addition to the Canada-China Foreign Investment Promotion and Protection Agreement ratified by the previous government. The FIPA, from which Canada cannot fully withdraw for the next 30 years, locked in more wide-ranging investment rights for Chinese companies than Canadian firms get in China. That’s why signing the FIPA before negotiating a Free Trade Agreement was a mistake by the federal government, according to one of the treaty’s most vocal critics.

“The sequencing works in China's favour,” says Osgoode Hall law professor Gus Van Harten. “China is the capital exporter in the relationship, so it has the greater interest in a FIPA that provides special rights and protections to each country's investors in the other country. I would say that, with the FIPA, the Harper government gave away one of Canada's bargaining chips to get a favourable trade deal. Now we should be going into trade negotiations with a view to repairing some of the flaws in the FIPA, which will not be straightforward or easy.”

Among the problems with the FIPA — at least for Canadians concerned about environmental laws or labour standards — is the right of Chinese corporations to sue Canada over decisions by courts or legislatures that are seen to interfere with their investments. These investor-state disputes are settled in secretive international tribunals overseen by for-profit arbitrators, and can force host countries to pay damages in the billions of dollars. (For more on the Canada-China FIPA, see Sold Down the Yangtze by Gus Van Harten).Add up the lopsided terms of the FIPA and the sudden pressure on Trudeau to conclude a Free Trade Agreement and the picture becomes clear. China intends to use this next round of trade talks to get what it has wanted for more than ten years: ownership of Canadian energy assets and secure access via pipelines and supertanker terminals on the West Coast.

Let’s curtail any accusations of Sinophobia, right here and now. My family was the victim of the same ‘yellow peril’ discourse that has simmered below the surface of B.C. politics for more than a century. This is not about racism toward Chinese people. This is about protecting our sovereignty — Canadian sovereignty, B.C. sovereignty and Indigenous sovereignty — from a powerful international trading partner.

Prime Minister Trudeau’s job is to balance the pressure coming from the likes of Han Jun, John Manley and Paul Desmarais Jr. with the legal and political realities here in British Columbia. Just last Monday the B.C. government came out in opposition to Kinder Morgan because the company has no credible plan to clean up toxic, sinking bitumen. Municipalities and First Nations around the Salish Sea applauded the province’s move.

Then on Wednesday the B.C. Supreme Court delivered the game-changing Gitga’at ruling, concluding that B.C. erred in signing away its duties of consultation around Enbridge’s Northern Gateway proposal. That ruling has clear implications for theKinder Morgan review, which relies on the same “Equivalency Agreement” between B.C. and Ottawa. Pipelines, as it turns out, are not the exclusive domain of the federal government.

As Beijing ramps up its campaign for a West Coast pipeline approval, our job will be to support those Members of Parliament looking to do right by their constituents — and prevent another cave-in like what happened with the FIPA. Simply put, if the cost of a trade agreement involves dangerous bitumen-laden supertankers on our coast, then the people of B.C. aren’t going to accept the terms. We have just under two months to make that clear before Trudeau heads on his first trade mission to China.

Image: Prime Minister Photo Gallery

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This is a guest post by David Suzuki.

In 1997, Canada restricted import and transfer of the gasoline additive MMT because it was a suspected neurotoxin that had already been banned in Europe. Ethyl Corp., the U.S. multinational that supplied the chemical, sued the government for $350 million under the North American Free Trade Agreement and won! Canada was forced to repeal the ban, apologize to the company and pay an out-of-court settlement of US$13 million.

The free trade agreement between Canada, the U.S. and Mexico was never designed to raise labour and environmental standards to the highest level. In fact, NAFTA and other trade agreements Canada has signed — including the recent Foreign Investment Promotion and Protection Agreement with China — often take labour standards to the lowest denominator while increasing environmental risk. The agreements are more about facilitating corporate flexibility and profit than creating good working conditions and protecting the air, water, land and diverse ecosystems that keep us alive and healthy.

Canada’s environment appears to be taking the brunt of NAFTA-enabled corporate attacks. And when NAFTA environmental-protection provisions do kick in, the government often rejects them.

According to a study by the Canadian Centre for Policy Alternatives, more than 70 per cent of NAFTA claims since 2005 have been against Canada, with nine active cases totalling $6 billion outstanding. These challenge “a wide range of government measures that allegedly interfere with the expected profitability of foreign investments,” including the Quebec government’s moratorium on hydraulic fracturing, or fracking.

Quebec imposed the moratorium in 2011 pending an environmental review of the controversial gas-and-oil drilling practice. A U.S. company headquartered in Calgary, Lone Pine Resources Inc., is suing the federal government under NAFTA for $250 million. A preliminary assessment by Quebec’s Bureau d’audiences publiques sur l’environnement found fracking would have “major impacts,” including air and water pollution, acrid odours and increased traffic and noise. Fracking can also cause seismic activity.

According to the CCPA, Canada has been sued more often than any other developed nation through investor-state dispute settlement mechanisms in trade agreements. Under NAFTA, “Canada has already lost or settled six claims, paid out damages totaling over $170 million and incurred tens of millions more in legal costs. Mexico has lost five cases and paid damages of US$204 million. The U.S. has never lost a NAFTA investor-state case.”

NAFTA does, however, have a watchdog arm that’s supposed to address environmental disputes and public concerns, the Commission for Environmental Cooperation. But Canada is blocking the commission from investigating the impacts of tailings ponds at the Alberta oilsands.

Environmental Defence, the Natural Resources Defense Council and three people downstream from the oilsands asked the CEC to investigate whether tailings leaking into the Athabasca River and other waterways represent a violation of the federal Fisheries Act. According to the complaint, the tailings ponds, which are actually much larger than what most people would think of as ponds, are spilling millions of litres of toxic liquid every day. Environmental Defence says the CEC found “plenty of evidence that tar sands companies were breaking Canadian law and lots of evidence that the Canadian government was failing to do anything about it.”

It’s the third time in the past year that Canada has prevented the commission from examining environmental issues. Canada earlier blocked an investigation into the protection of polar bears from threats including climate change and one concerning the dangers posed to wild salmon from B.C. fish farms.

Trade agreements are negotiated in the best interests of corporations instead of citizens. On top of that, federal and provincial governments keep pinning our economic hopes on volatile oil and gas markets, with little thought about how those resources could provide long-term prosperity. Recent plummeting oil prices show where that leads.

These priorities are screwed up. We end up with a boom-and-bust economy and the erosion of social programs as budgets are slashed when oil prices drop. Skewed trade deals allow corporations to override environmental protections that haven’t already been gutted, and create a labour climate in which wages, benefits and working standards fall.

It’s time for Canada to recognize that a diversified economy and citizens’ right to live in a healthy environment are more important than facilitating short-term profits for foreign and multinational corporations.

Written with contributions from David Suzuki Foundation Senior Editor Ian Hanington.

Learn more at www.davidsuzuki.org.

Image Credit: Prime Minister Stephen Harper Photo Gallery

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