WHY FEDERAL GOVERNMENT SHOULD HAVE RED-FLAGGED CHINA’S BID FOR NORSAT
To protect U.S. relations, takeover should not proceed, writes Diane Francis.
The federal government signed the takeover by the People’s Republic of China of a tech company called Norsat International Inc. in Vancouver. The company sells satellite-communication systems to the U.S. military and agencies, and now a Washington, D.C. commission has red-flagged this deal as a threat to U.S. national security.
This permission should never have been granted to Chinabased Hytera Communications Co. There is a strategic reason why the Chinese would buy this company and Canada must, on behalf of our trading partner, not allow itself to become a backdoor entry into the U.S. Pentagon or other sensitive sectors and entities. This displays the same naivete that afflicted former prime minister Stephen Harper who pursued a “free trade” deal with unfair trader China.
(Hytera, which has been competing with U.S.fund manager Privet to buy the company, raised its offer Friday to US$11.50 per share and amended the break fees, but Norsat says there’s no assurance that the transaction will get all necessary approvals and be completed.)
This week, Prime Minister Justin Trudeau answered critics by stating that the deal was run by American authorities. But, given China’s avowed goal of snapping up important technology, a full detailed analysis with the Americans of what this company does — and why the Chinese want to buy it — should have been undertaken.
Now there’s a U.S. political backlash. This is not a matter of sovereignty, but alliance. The federal government cannot ignore or bypass military, and national security concerns, and certainly never to please China.
What would Canada think if the U.S. signed a bilateral with a country whose corporations threatened Canada’s national security?
Besides scrapping this deal, the federal government must stop pursuing a bilateral “free trade” deal with China, given its past negotiations, behaviour, and continuing damage to the West, through cyberattacks and counterfeiting.
We are the two most symbiotic and synergistic economies in the world, good friends, cultural cousins, and inter-dependent in terms of security and business.
U.S. President Donald Trump doesn’t make the relationship any easier, but it’s never been totally smooth sailing.
Canada’s best course in trade policy is to double down on its biggest asset, which is this economic relationship with the United States. A replacement for NAFTA should be a bilateral deal that is more far-reaching and includes free movement of workers across the border.
This makes sense — whoever is president — because the United States is where the capital, expertise, and opportunities are and will be for Canadians, individually and corporately.
Except for this China misstep, the Trudeau government has handled the volatile U.S. situation quite well. It announced more spending on military and defence. This has been a request that was not only Trump’s but Obama’s too, who said elegantly that the “world needs more Canada and NATO needs more Canada” in his address to Parliament before leaving office. Finally, this month the federal government announced increases of $70 billion over a decade.
But the federal government must drop the myth, once and for all, that China is a desirable bilateral trade partner. Here’s why:
China’s corporations are stateowned enterprises, or client corporations, and accede to the wishes of the Politburo.
China will never grant reciprocity in terms of market access or the rule of law.
China is a known trade cheat who conducts cyber warfare against governments and corporations, and indulges in largescale counterfeiting by ignoring copyright and patents.
Deborah Wince- Smith, president of the United States Council on Competitiveness in Washington, D.C., said at a tech conference last month in Boston: “China is the epicentre of digital theft. If nothing had been stolen by China, the U.S. would have another US$1.7 trillion in GDP.”
China’s track record in Canada is abysmal and includes a request to the Supreme Court of Canada, by a Chinese engineering giant a handful of years ago, to exempt it from our laws after it breached safety violations and ignored our courts following workers’ deaths. The Court refused to hear the case. Fines were never paid.
China is on a tear to snap up strategic assets — telecom, satellite, defence, aerospace, artificial intelligence — around the world. It’s also snapping up farmland, resources and infrastructure deals (through their Silk Road initiative) wherever it can.
Norsat is small potatoes, but obviously of importance or wouldn’t be sought. If it’s for sale, an American or European bidder would be acceptable because we have trade deals which grant Canadians market access and legal rights in those jurisdictions.
China wants one-way trade — its way — and nobody will ever be able to buy their technology or resource companies or be granted reciprocal access privileges.
The Canada and the U.S. economic union is the envy of the world and must be safeguarded and enhanced.
The best advice, when navigating among superpowers, is that Canada must remember that the enemy of my friend does not have to be my enemy, but it certainly cannot be my friend.