Prime Minister’s Trip Fails to Pressure India to Ratify Canada-India FIPA

In the face of intense pressure and strong language during their trade mission to India, Prime Minister Stephen Harper and Trade Minister Ed Fast appear unable to convince the Indian Government to ratify the Canada-India Foreign Investment Protection and Promotion Agreement (FIPA). Signed in Ottawa on June 16, 2007, the Canada-India FIPA is of the same kind as the heavily criticized FIPA signed recently between Canada and China.

The Indian government’s resistance is understandable. Following an attempt by the Indian government to recover taxes from an Indian subsidiary of UK-based multinational Vodafone, Vodafone threatened to challenge the Indian government’s decision by initiating arbitration proceedings under a bilateral investment treaty such as the pending Canada-India or Canada-China FIPAs. In response to this threat by a multinational against a decision taken by a democratic government, the Indian Parliament is reviewing all such agreements and will not likely sign another, similar to the decisive stance taken against FIPAs by the Government of Australia.

“Despite signing this FIPA more than 5 years ago and despite Canadian pressure, the Indian Parliament has declined to ratify this treaty and instead decided to reconsider some aspects of the Agreement that it found troubling,” said Elizabeth May, Green Party Leader and MP for Saanich-Gulf Islands. “This is precisely what Canada should be doing now with the Canada-China FIPA”.

In an ironic twist, Prime Minister Stephen Harper calmly indicated his patience with the decision by the Indian Parliament to review such treaties, stating, “It’s hard to simply impose solutions and there are often a lot of barriers to getting things done at the governmental level. I’m one who happens to believe that democratic institutions, while they may slow things down, actually in the long term produce more robust outcomes with greater social buy-in and more secure long-term economic development.”

“What is truly shocking about the Prime Minister’s stated willingness to respect the democratic preferences and institutions of other countries while negotiating FIPAs”, observed May, “is his complete disdain for the will of Canadians and the role of our Parliament here at home. Will he take his own advice and submit the Canada-China FIPA to a Parliamentary review?”