A China-Canada trade agreement the Harper government signed earlier this month amounts to a “corporate rights pact” that will make it harder for Canada to enforce environmental, energy and financial policies, the Council of Canadians says.

The left-leaning citizens’ group has issued a statement saying the Canada-China Foreign Investment Promotion and Protection Agreement (FIPA) would lead to lawsuits against the government of Canada that would inevitably force it to weaken environmental protections, and urged the government to follow Australia’s lead and stop negotiating these types of deals.

The Council also said the pact would have little impact on trade with China.

There is very little evidence that these corporate rights pacts actually encourage investment into or out of Canada, or any other country for that matter,” Stuart Trew, a trade campaigner with the Council of Canadians, said in a statement.

“They are very useful, on the other hand, for extorting governments when things don’t go their way. That could be delays or cancellations to energy and mining projects, environmental policies that eat into profits, even financial rules designed to create stability or avoid crises can be challenged."

The council’s criticisms come shortly after Trade Minister Ed Fast and his Chinese counterpart signed the agreement, which came after some 18 years of stop-and-go negotiations that finally concluded last February.

It also comes as the federal government reviews the proposed $15.1-billion takeover of Alberta energy firm Nexen by CNOOC, China’s state-owned oil giant.

The Nexen-CNOOC deal appears to have the backing of the Harper government, but cabinet members have acknowledged Canadians are split on the issue.

CSIS, Canada’s intelligence service, has warned about deals with state-owned corporations, saying some of them could pose national security hazards.

The proposed takeover fuelled controversy last week when it emerged the company is developing a large offshore natural gas field in Iran and its chief executive has described CNOOC assets as a “strategic weapon.”

But the Harper government has been intent on expanding Canada’s trade relations with Asia, particularly China, in the wake of the weakening of the U.S. economy in recent years, and especially after the U.S. government’s temporary rejection of the Keystone XL pipeline last year.

The deal with China is designed to create a level playing field for Chinese companies operating in Canada, and vice versa, by eliminating barriers to foreign businesses in both countries.

The Harper government has said the deal will spur Chinese-Canadian trade by removing uncertainty for foreign investors.

But the Council argues the deal will simply be used to weaken Canadian regulations until they are more in line with what exists in China. It offers examples of other trade agreements that have had similar ramifications:

Chinese financial services firm Ping An, formerly the largest shareholder in Belgian-Dutch financial giant Fortis, has just taken Belgium to investor-state arbitration for the government’s post-financial crisis measures. Cigarette maker Philip Morris is using a Hong Kong-Australia investment treaty to challenge Australian plain packaging rules on cigarette boxes. Canada is the sixth most sued country under the investor-state dispute settlement regime, according to a recent UN Conference on Trade and Development report. Over the years, the federal government has paid out or is on the hook for more than $200 million in awards or settlements to corporations because of NAFTA investment lawsuits.

The Council is urging Canada to follow the example of Australian Prime Minister Julia Gillard, whose government has stopped negotiating what are known as “investor-state dispute resolution clauses” into its trade agreements.

“Canadians need a chance to review the risks in this treaty before it’s ratified by Parliament,” Maude Barlow, chair of the Council of Canadians, said in a statement. “This should not be a rush job, especially as Canada considers opening up its energy sector to Chinese investment.”

Related on HuffPost:

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  • Here are a few details of the major investment deal coming soon between Canada and China, as well as a list of what CBC chief political correspondent Terry Milewski calls a "small blizzard of incremental agreements," signed in Beijing. <em>With files from CBC</em>. (Diego Azubel-PoolGetty Images)

  • The Big One: FIPA

    Prime Minister Stephen Harper called the foreign investment promotion and protection agreement (FIPA) between Canada and China the first "comprehensive economic agreement" between the two countries. In fact, what was signed by Harper and Chinese Premier Wen Jaibao in Beijing is not the final deal, but a declaration of intent: Now it must be legally reviewed and ratified by both governments, which for Canada will mean a debate in the House of Commons. Once both countries complete this process, it will need to be formally signed to take effect. This deal will protect Canadians investing in China, as well as Chinese investors in Canada, from "discriminatory and arbitrary practices." Once in place, investors can have more confidence that rules will be enforced and valuable business deals will be subject to predictable legal practices. Harper told reporters in Beijing he "absolutely" expected that it will make a "practical difference." "The agreement does not override existing Canadian law in regard to foreign investment and foreign investment review," Harper said. "Those laws remain in place." Negotiations for this agreement took 18 years, and key players in manufacturing, mining and the financial sectors were consulted to get to this stage. It's not unusual for Canada to have this kind of an agreement with a trading partner. FIPAs are in force with 24 other countries that trade with Canada, and active negotiations are underway with 10 other countries, according to the government's announcement. (Diego Azubel-PoolGetty Images)

  • The 'Blizzard' (By Sector):

    (AP Photo/Valentina Petrova)

  • Agriculture

    - A new protocol, building on a 2010 agreement to restore Canada's market access to the Chinese market for Canadian beef following the 2003 BSE outbreak and resulting border closures, to allow industrial beef tallow (fat) to be imported for the first time in almost a decade. China used to be Canada's top export market for tallow ($31 million in 2002), and now Canada has a shot at a share of the $400 million in tallow China imports from around the world. - A memorandum of understanding (MOU) on canola research, to address a recent fungal disease in canola and rapeseed that threatens Canada's valuable trading relationship with China in canola. - On Tuesday, Chinese aquaculture feed company Tongwei announced it will increase its purchase of Canadian canola by up to $240 million per year by 2015. (DAVID BUSTON/AFP/Getty Images)

  • Natural Resources:

    - A MOU between Natural Resources Canada and the Chinese Academy of Sciences to collaborate on scientific research on sustainable development of natural resources. The government release touts benefits including new technologies for resource firms, carbon emissions reduction strategies, reduced environmental impacts and natural hazards from resource development, and new opportunities for Canadian suppliers of equipment and services. - A MOU spelling out a "framework" for Parks Canada and China's state forestry administration to collaborate and share scientific expertise in the management of national parks, natural reserves and other protected areas. The agreement includes language around ecological restoration, conservation measures for endangered wildlife, wetlands development, and the preservation of forests and wetlands. (<a href="http://www.flickr.com/photos/47096398@N08/" target="_hplink">Flickr: eleephotography</a>)

  • Energy

    - A continuation of the MOU, first signed in 2001 and renewed in 2006, on energy co-operation to "engage China on energy issues" through a Canada-China joint working group on energy co-operation, chaired by Natural Resources Canada and China's national energy administration, which is responsible for Chinese energy policy. The working group oversees joint research projects, exchange of expertise, and co-operation between energy companies in both countries, including the promotion of energy efficiency and renewables. It aims to both attract capital investment and improve market access for Canadian energy resources and technology. (MARK RALSTON/AFP/Getty Images)

  • Science and Technology

    - Approval of seven projects, valued at $10 million, under the Canada-China framework for co-operation on science and technology and innovation, including: a diagnostic kit for acute kidney injuries, a wind energy seawater desalination system, a waste heat-recovery system to help oil refineries consume less fuel, new solar cells for renewable energy panels, a real-time multi-sensor navigational tracking device for hand-held devices, a blue-green algae bloom warning system and "next generation" large-scale geographic information systems. - Two more calls for proposals, valued at $18 million ($9 million from each country) for joint research under the same framework. These proposals are for the development of "innovations with high commercial potential" in the areas of human vaccines and clean automotive transportation. The Canada-China joint committee on science and technology, made up of individuals from industry, academia and government, sets the priorities and oversees these projects. (To date, 21 projects ranging from nuclear power to AIDS drugs, to clean technologies for pulp and paper have received some $28 million in funding.) (TOSHIFUMI KITAMURA/AFP/Getty Images)

  • Education

    - A renewed MOU extending and modifying the Canada-China scholars' exchange program, which has seen 900 students travel between Canada and China since 1973. New eligibility rules and scholarships will be in place for the next round of competitions in 2012, including eight to 12 Canadian scholarships for Chinese professionals and 20 awards for Canadian university students. (<a href="http://www.flickr.com/photos/plutor/" target="_hplink">Flickr: Plutor</a>)


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  • 20: Australia

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 19: South Korea

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 18: Saudi Arabia

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 17: Belgium

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 16: Austria

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 15: Norway

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 14: Canada

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 13: Taiwan

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 12: Denmark

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 11: Qatar

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 10: Japan

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 9: Hong Kong

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 8: United Kingdom

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 7: United States

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 6: Germany

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 5: Netherlands

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 4: Sweden

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 3: Finland

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 2: Singapore

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>

  • 1: Switzerland

    Source: <a href="http://www3.weforum.org/docs/CSI/2012-13/GCR_Rankings_2012-13.pdf" target="_hplink">World Economic Forum</a>