Page 107 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.71, # 1, 2014, pp. 99-119

Francis comments use poorly chosen words, such as that “*the Conservative party] demonstrated

the worst negotiating skills since Neville Chamberlain” in crafting the deal where “Ottawa

capitulated on everything.”[http://opinion.financialpost.com/2012/11/02/canada‐china‐trade‐deal‐is‐

too‐one‐sided] The credibility gap widens when one considers that the deal is the product of 18

years of negotiations.

Ultimately, the Chinese FIPA is positive for Sino-Canadian trade relations. This is because

it establishes rules and trade frameworks which are understood by both nations. Ian Lee remarks

that Canada actually has more to gain than China, as “with the rule of law prevailing in Canada

FIPA protections are less valuable for Chinese investors in Canada than for Canadian investors

in China.”

Taking steps toward creating a legal baseline to govern trade relations with China is a positive

step. Edy Wong comments on the balance between “economic realism and libertarian idealism.”

This is very apt. Objections driven by Idealism or ideology about the “onesidedness” of the deal

ought to be questioned from the vantage of realism: Canada’s ability to approach a nation forty-

times more populous that holds a $32 billion dollar trade deficit [http://ca.reuters.com/ article/

businessNews/idCABRE88P16D20120926] as a purely equal partner is uncertain. Economic realism

suggests that until Canada can leverage its tactical strengths, such as using the Nexen deal as a

bargaining chip, it will be difficult to press for a fully level playing field at this point in time.

Economic Considerations

Misconceptions drive much of the negative perception of Chinese SOE FDI. Perceptual

issues notwithstanding, the most powerful question that must be asked is “how does the FDI

benefit the recipient country?” As such it is worth exploring examples where Chinese FDI has

made a positive impact on society and the economy, especially in countries with cultures and

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