This January, after little more than 6 months of negotiations, the Canadian Government announced the completion of negotiations of the Canada-Peru Free Trade Agreement at the World Economic Forum in Davos, Switzerland. Six months later, on June 7, 2008, Canada announced that negotiations for a controversial Free Trade Agreement (FTA) with Colombia were finalized.
This January, after little more than 6 months of negotiations, the Canadian Government announced the completion of negotiations of the Canada-Peru Free Trade Agreement at the World Economic Forum in Davos, Switzerland.
Six months later, on June 7, 2008, Canada announced that negotiations for a controversial Free Trade Agreement (FTA) with Colombia were finalized.
The negotiations with Colombia were controversial from the get go: the country has the worst human rights record in the hemisphere, and the government of Alvaro Uribe is riddled by ongoing scandals that have revealed proven links between Uribe’s allies in Congress and paramilitary death squads.
In a corruption scandal that would most certainly bring down a Canadian Prime Minister, Uribe himself is the subject of a recent Sentence by the Colombian Supreme Court. The justices condemned him for buying the key vote of Congresswoman Yidis Medina in exchange for political favours, a crime necessary for the constitutional changes that opened the door to Uribe’s re-election in 2006.
On June 26th, Medina was sentenced to 3 ½ years of house arrest for accepting bribes from the president. The president promptly responded that the justices were doing the bidding of terrorists and (illegally) called for a referendum for the repeat of the 2006 elections.
Compared to the deal with Colombia, which has begun to generate concern among Colombians and Canadians, Canada’s agreement with Peru slid in under the radar. It was ratified on May 29th, making it the country’s fourth with a Latin American country: first came the Canada-US FTA in 1988, which integrated Mexico with the implementation of NAFTA 1994, then an agreement with Chile signed in 1997, and another with Costa Rica ratified in 2002.
Signed, Sealed and Delivered?
On July 7, 2007, the Conservative government of Stephen Harper announced the beginning of FTA negotiations with Peru and Colombia, having identified the two countries as prime targets for the signing of Free Trade Agreements in accordance with the economic plan Advantage Canada.
Both of the agreements were negotiated rapidly and in behind closed doors. According to Mario Valencia from the Colombian Network in Response to Free Trade (RECALCA), "almost no one here knew that Colombia was negotiating with Canada."
The negotiations "were extraordinarily fast, and unlike the negotiations with the United States, which lasted 16 rounds, they were wrapped up in the fifth round of negotiations, out of the six rounds planned at the outset in July of 2007," according to a press release put out by RECALCA.
So fast, in fact, that the end of Canadian negotiations with Colombia was announced before the Standing Committee on International Trade had finished the report they were preparing to advise the government during negotiations.
"By making this announcement only days before the Standing Committee on International Trade report would have been completed, the government is clearly saying that it does not respect the work of Parliament," stated Liberal International Trade Critic Navdeep Bains. [1]
The report, meant to "guide negotiations," was released more than 2 weeks after they were concluded. It contains eight recommendations, of which the second "recommends that the Government of Canada maintain close ties with Colombia without signing a free trade agreement…" [2]
The Conservatives have not made a statement with respect to the Canada-Colombia Free Trade Agreement since Canadian Minister of Foreign Affairs and International Trade David Emerson announced the finalization of negotiations. In Canada, there is no need for a vote in parliament to ratify the agreement, unlike in the United States, where the Democrat led congress has thus far ‘frozen’ the ratification of the US-Colombia Free Trade Agreement partly due to concerns about human rights in Colombia.
According to Colombian activist and physician Manuel Rozental, "The Harper Government knows what it is doing and that even Parliament would not approve the process, content and impacts of the agreement, hence the ‘rush and hush’ strategy."
When asked what message he would like to send to the Conservatives, Rozental responded bluntly: "No deal with a criminal regime."
Canada’s Business Sector: Precious Interests
The mining sector, along with the financial and oil and gas sectors, is among the major Canadian business interests in Latin America.
"Mining is the single activity in which Latin America and the Caribbean is the most prominent region for Canadian Outward Foreign Direct Investment," reads a recent report from the UN’s Economic Commission for Latin America. [3]
Chile, the world’s largest producer of copper, was the first Latin American country to sign a bilateral Free Trade Agreement with Canada.
In a presentation to the International Trade Committee, Trade Minister David Emerson explained that after the Canada-Chile Free Trade Agreement was signed, "Canadian mining companies in particular invested massively in Chile, [and] brought the resource or semi-processed resource product out of Chile into Canada… creating a stronger mining sector and opportunities for value added in the Canadian economy." [4]
In Colombia and Peru, the majority of Canadian investment is in the extractive industries.
Peru is an extreme case. In 2006, the top five exports from Peru to Canada break down as follows: gold made up 57.5%, raw copper accounted for 10.8%, refined copper for 8.7%, zinc for 8.1%, and unleaded gasoline for 6.0%. [5]
A large part of the production of these raw materials exported from Peru to Canada is in the hands of Canadian companies, including Barrick Gold, Yamana Gold, Teck Cominco and Iberian Minerals Corporation.
More than two thirds of the estimated $3 billion invested by Canadian companies in Colombia is in the extractives sector. The Canadian companies with the largest estimated investments in Colombia in 2007 include Nexen Inc and Petrobank Energy and Resources, both based in Calgary, and Toronto’s Pacific Rubiales Energy.
The on-going armed conflict in Colombia, combined with a history of small-scale mining activity, has thus far prevented the country from being transformed into a metallic metal producer on par with Peru, but that trend is changing, and fast. South African gold giant Anglo Gold Ashanti and their partners have secured more than 10 million hectares in mineral concessions in Colombia since 2004.
Colombia is already a major producer of coal, and new changes in the Mining Law as well as President Uribe’s policy of ‘Democratic Security’ and guarantees to trans-national companies, are being made to facilitate the start up of large-scale, metallic mining projects in Colombia.
Canadian junior mining companies are present in scores. Of note are B2Gold Corp, Bandera Gold Ltd., Blue Sky Uranium Corp, Colombia Goldfields, Greystar Resources, Latin American Minerals, and Mega Uranium Ltd, all of which are carrying out exploration for gold or uranium.
Mining Industry Pushes for Protection
The push for Free Trade Agreements has been strong from businesses and business lobbies representing the extractive industries. At a presentation on Canadian mining investment on March 6, 2005, Christian Côté from International Trade Canada pointed out to his audience that there exists "pressure from natural resource community for government to improve investment climate for target countries." [6]
Canadian companies stand to benefit from Free Trade Agreements because they remove the possibility that host governments will raise taxes, change their laws, or expropriate properties.
By way of example, the FTA with Peru eliminates the possibility that Peru would enact such a thing as the recent "Mining Mandate" passed in Ecuador by the Constituent Assembly, which suspends all large scale mining activity (exploration) in Ecuador for 180 days while a new Mining Law is written.
According to Foreign Affairs Canada "An investment chapter in the Canada-Peru FTA locks in market access for Canadian investors in Peru and provides greater stability, transparency and protection for their investments." [7]
These elements have little to do with popular conceptions of "Free Trade" as the lowering of tariffs and taxes. In the words of Colombian economist Héctor Mondragon, "these agreements should be known as ‘Agreements on the Rights of Trans-national Corporations’ instead of as ‘Free Trade Agreements.’"
The day that the negotiations of the Free Trade Agreement with Peru concluded, the Mining Association of Canada (MAC) sent out a press release stating "MAC strongly supported the commencement of these negotiations and is very pleased to see them concluded in such a timely manner." [8]
Lobbying by industry in favour of an agreement with Colombia continues. In mid-May, the Canadian Chamber of Commerce sent a letter to Lee Richardson, the Chair of the Standing Committee on International Trade, to "strongly encourage [the] committee to endorse these negotiations and the benefits that they will bring to Canadian companies and to Canadians." Eight companies signed on in support of the letter, including Barrick Gold Inc, Teck Cominco, Nexen Inc. and Talisman Energy. [9]
Where do Canadians Stand?
In Canada, the Harper government and the mainstream media bombard the population with the idea that Free Trade Agreements are about prosperity, economic growth, security, equitability, and democracy. A cursory look at the facts shows us that these agreements negotiated and signed in complete secrecy, actually best represent the wishes of large corporations, and lack even a token amount of democratic participation.
Will Canadians stand by and allow the Harper government to ratify a Free Trade agreement with Colombia, where 24 unionists were killed and four disappeared in the first 4 months of 2008, so that Canadian mining and oil companies can make more money? Or will Canadians stand up in defence of life and speak out against these agreements, negotiated with one of the most repressive regimes in the hemisphere and in their names but without their consent?
Together, perhaps, these are the key questions in determining the moral compass of Canadians as Parliament resumes again in September.
Notes:
[1]Liberal Party of Canada. (June 9. 2008). Colombian Deal Shows No Respect for Parliament. Retrieved June 28, 2008 from www.liberal.ca/story_14058_e.aspx
[2] Standing Committee on International Trade. (June, 2008). HUMAN RIGHTS, THE ENVIRONMENT AND FREE TRADE WITH COLOMBIA Report of the Standing Committee on International Trade Retrieved June 28, 2008 from http://cmte.parl.gc.ca/cmte/CommitteePublication.aspx?SourceId=245001
[3] Economic Commission for Latin America (May, 2008). Foreign Investment in Latin America and the Caribbean 2007, Chapter IV- Canadian FDI in Latin America and the Caribbean. Retrieved June 29, 2008 from this link.
[4] Standing Committee on International Trade. (December 4, 2007). EVIDENCE
Tuesday, December 4, 2007. Retrieved June 29, 2008 from http://tinyurl.com/5dqe42
[5] Ministerio de Comercio Exterior y Turismo. (May, 2007). Reporte de Comercio Bilateral: Perú-Canada. Retrieved June 29, 2008 from http://www.mincetur.gob.pe/newweb/Portals/0/comercio/tlc_canada/estudios.html
[6] Côté, Christian. (March 9. 2005.) Canadian Mining Investment in Russia and Central Asia. Retrieved June 29, 2008 from http://www.nrcan.gc.ca/mms/invest/2005/rus/pdf/cote.pdf
[7] Foreign Affairs Canada. (May, 2008). Fact Sheet: Investment. Retrieved June 29, 2008 from this link
[8] Mining Association of Canada. (January 26, 2008). MAC Applauds Canada-Peru Free Trade Agreement. Retrieved June 29, 2008 from http://www.mining.ca/www/media_lib/Press_Release/2008/01_29_08.pdf
[9] Beatty, Pearrin. (May 16, 2008). Re: Study of Status of the Free Trade Agreements and ongoing Negotiation between Canada and Colombia. Canadian Chamber of Commerce. Retrieved June 29, 2008 from http://www.chamber.ca/cmslib/general/RichardsonColombiaFTAsupportletter.pdf
Dawn Paley is a journalist based in Vancouver, BC. She is currently in Colombia.