Tuesday, September 15, 2009

Why not China?

Every once in a while an otherwise fairly sensible journalist drops off the edge of the world and engages in drivel. Such was the case with Terence Corcoran writing a column in today’s National Post, entitled, “Warm, fuzzy dictatorship".

First, he engages in the Straw Man Fallacy, asking us to imagine a situation in which the Obama administration wants to invest in our oil patch through some U.S. government- controlled agency buying out Suncor Canada at a premium. Then, he knocks the straw man down by claiming there would be national outrage at Americans taking it over.

His main point is that the government of China is doing much the same thing and being welcomed with open arms. He attributes this imagined difference to Canadian knee-jerk anti-Americanism, because he thinks there is no good reason to be treating with a dictatorship and if we had our wits about us we would be able to separate the wheat from the chaff – the chaff being China.

It is certainly an argument, but, leaving aside the fantasy problem, it is not an especially persuasive one.

In the first place, Canada has already opened its resources arteries to American investment through NAFTA. If there was a horse in the barn to be protected, it long ago left the stable, never to return. Fortunately, we are rich enough, and America is apparently not hungry enough, so that we have excess capacity to sell to others. Why not China?

Secondly, we have traded resources with other dictatorships for years. Our foreign business dealings have never been based on other countries being mature democracies or being as pure as the driven snow on human rights. What compelling reason would there be during a major international economic meltdown to start drawing this Boy Scout line in the sand now?

Thirdly, it makes economic sense to have competitors for your resources. During Pierre Trudeau’s years the government tried to stimulate more trade with Europe, to no avail. Since then, it is the Pacific region that has become the greater economic zone, and China looks to be a good customer.

Fourthly, we are not discussing technology transfer here. We are talking about things that you dig out of the ground – Canadian ground. If there were an international crisis in which China was on the opposing side, we have physical control of the assets, so there is no national security issue.

Fifthly, it is not clear that the U.S. will remain our best customer for oil if all this global warming nonsense is translated into American-driven carbon penalties for shale oil. We need to diversify and China makes the most sense as an alternative customer.

Finally, I would not count on the outrage of Canadians. The majority of the citizens in this country are quite taken with the Obama mystique (not to their credit, in my opinion). They would not get worked up at such an Obama initiative any more than they thought the firing of the president of General Motors was anything extraordinary for him to do, and probably cheered him when he did it.

These are different times, Mr. Corcoran. Please try and keep up.

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