Exploring Economic “Diplomacy”

(By Heidi Monk, Queen’s University)


Despite much cynicism regarding the merger of the former Canadian International Development Agency (CIDA) and the Department of Foreign Affairs and International Trade (DFAIT) into Foreign Affairs, Trade and Development Canada (DFATD), the move did have the potential to bring about a more coherent development policy.

It is in fact quite logical to consider Official Development Assistance alongside trade, immigration and the environment, among other sectors. In 2012, the North South Institute documented that Canadian imports from Least Developed and Low Income Countries were valued at $5.1 billion, more than double the $2.1 billion of Canadian aid allocated to these same countries. Trade has the potential to affect people’s livelihoods, but does not do so automatically. An easy place to start integrating development with trade would be to dust off the unsuccessful 2009 private member’s bill, “Corporate Accountability of Mining, Oil and Gas Corporations in Developing Countries Act,” introduced by Mr John McKay or his more recent (2014) “Sunshine bill,” both of which aim to increase the transparency of Canadian mining, oil and gas companies. Holding Canadian industries to equally high labour and environmental standards at home and abroad would without doubt contribute to raising the standard of living in the regions where Canadian companies operate. Similarly, if Canada were to seriously engage in international discussions and agreements on taking action on climate change, this could contribute to protecting the poor and vulnerable.

Unfortunately, such optimistic thinking lies far from current Canadian policy, as expressed in the Global Markets Action Plan introduced by the DFATD. The plan states that Canada “must be more aggressive and effective than the intense competition we face. Under the plan, all diplomatic assets of the Government of Canada will be marshalled on behalf of the private sector in order to achieve the stated objectives within key foreign markets.”

As critics feared, development is an afterthought for the DFATD. Development does not orient trade or foreign policy decisions. On the contrary, resources allocated to “development” become subsumed by economic interests.

In addition to signalling the nature of the merger, the plan jeopardises the (already questionable) integrity of Canadian development assistance. It is in flagrant disregard for the Official Development Assistance Act which states that “Official development assistance may be provided only if the competent minister is of the opinion that it (a) contributes to poverty reduction; (b) takes into account the perspectives of the poor; and (c) is consistent with international human rights standards.”

The plan also flies in the face of the Paris Declaration that agreed to untie aid in 2005. “Tied aid” refers to when the aid recipient is obliged to spend a portion of the funds on goods and services from a particular geographic region – usually coinciding with the donor country. The agreement to untie aid recognised that tied aid was beneficial politically and economically for the donor rather than the recipient. The Paris Declaration states that for aid to be most effective, it must actually be aid, which is described by the Organisation for Economic Cooperation and Development as having “the promotion of the economic development and welfare of developing countries as its main objective.” Canada was amongst the countries who endorsed this policy, yet the Global Markets Action Plan proposes to tie aid quite explicitly, albeit differently.

From a development perspective, this prioritisation is highly problematic since using Canadian funds to support the private sector is unlikely to do much for those struggling to get by – for whom coping with climate change and land grabs, feeding their families and keeping them safe, or educating their children, are continued challenges.

Despite the campaigning by Canadian mining companies to depict their industry as ethical, it is anything but. There is a reason people protest outside Canadian embassies. The people of Greece and Romania struggle against the planned destruction by Canadian mining companies. In both countries there have been massive mobilisations in recent months. Eldorado Gold’s operations in Greece have been highly contested and confrontations between police and protesters led Amnesty International to call for an investigation into allegations of human rights violations. In Romania, Senators just rejected a bill to open a Gabriel Resources gold mine. One of the protests leading up to this decision assembled 20,000 people in the streets.

Furthermore, Costa Ricans know Canada for the billion-dollar lawsuit launched by Infinito Gold against their country for not allowing it to mine for gold. It is the free trade agreement between the two countries that allows the company to file such a law suit against the Government of Costa Rica. In Argentina, Silver Standard ignores complaints of toxic waste pollution to rivers in affected communities. In another case, environmental groups presented evidence of environmental damage caused by McEwen Mining. In Papua New Guinea women were raped by security guards at a Barrick Gold-owned mine, and the company has ignored the UN High Commissioner for Human Rights’ recommendation for an independent review of how victims were handled. The list of countries where Canadians are known by the highly contested operations of Canadian companies is growing.

The flurry of free trade agreements – seven agreements with thirty-seven countries, to be precise – leaves no room for doubt that this government is concerned with business interests. One cannot accuse the Government of Canada of concealing these actions behind purportedly good intentions.  “Economic diplomacy” is abundantly clear. But, is this diplomacy or plunder?

The unabashed tone of the policy is of almost equal concern as the policy itself.  It is shocking that the Canadian government is so supportive of the Global Markets Action Plan that it does not cloak it under terms that might provide less fodder to critics.

The plan should also raise questions for Canadians, irrespective of their ideas about global poverty reduction and development efforts. Why are for-profit private interests subsidised to the extent that they monopolise Canadian public funds used internationally?

Canadians may be interested in having environmental concerns and peace-making figure as part of our diplomatic policy. Does our withdrawal from the Kyoto Protocol, the only international agreement of its kind to address climate change, and our lack of cooperation in coming to a new agreement count as economic diplomacy? What about pulling out of the United Nations’ Convention to Combat Desertification? Or voting against the UN Declaration on the Rights of Indigenous Peoples in 2007?

In 2006, Prime Minister Harper said, “I don’t think Canadians want us to sell out important Canadian values […] They don’t want us to sell that out to the almighty dollar.” Canadian values are defined in the Official Development Assistance, and include global citizenship, equity and environmental sustainability. To date, economic diplomacy has not been expressed using these parameters.

Canada would benefit from another type of diplomacy that recognises that the bottom line is not the GDP or Foreign Direct Investment. The bottom line is our common wellbeing and our planet.

Work Cited:

  1. http://cidpnsi.ca/wp-content/uploads/2011/11/beyond_aid_final.png
  2. http://international.gc.ca/global-markets-marches-mondiaux/plan.aspx
  3. http://laws-lois.justice.gc.ca/eng/acts/O-2.8/page-1.html
  4. http://www.oecd.org/development/effectiveness/34428351.pdf
  5. http://www.amnesty.org/en/library/asset/EUR25/004/2013/en/c81397ca-0895-4f7a-92b5-82370134de8f/eur250042013en.html
  6. http://www.aljazeera.com/indepth/features/2013/11/stopping-europe-biggest-gold-mine-20131117102859516331.html
  7. http://www.wildlifeextra.com/do/ecco.py/view_item?listid=1&listcatid=2813&listitemid=18112#cr
  8. http://www.miningwatch.ca/news/third-mining-company-walks-out-canada-s-extractives-counsellor
  9. http://wp.cedha.net/?p=11594&lang=en
  10. http://www.miningwatch.ca/news/barrick-ignores-un-high-commissioner-human-rights-recommendation-regarding-papua-new-guinea-rap
  11. http://www.theglobeandmail.com/news/world/how-harpers-foreign-policy-focus-evolved-from-human-rights-to-the-almighty-dollar/article15631389/