Some uncomfortable truths emerge in the U.S.-China power struggle

In his open letter to Canadians, I thought China’s ambassador to Canada was being obtuse by wilfully ignoring Canada’s legal obligations. Now I realize that legalities are not a concern of China’s.

image: China Daily

Under our extradition treaty with the U.S., Canada had an obligation to arrest the CFO of Hauwei Technologies, Wanzhou Meng, because the U.S. Department of Justice alleged that her company violating American trade sanctions on Iran.

Chinese ambassador Lu Shaye says that we should worry about our independence:

”While Canada has continued to stress its judicial independence, did it insist on that independence when facing the United State’s unreasonable request (Globe and Mail, December 13, 2018)?”

He doesn’t seem to understand the rule of law. International extradition treaties are not about independence, they are about legal obligations.

On re-reading the ambassador’s letter, I realize that I have been naive. While Mr. Shaye overlooks what’s inconvenient to his argument (who hasn’t done that on occasion?), he grasps the raw politics involved. Ambassador Shaye continues:

“The detention of Ms. Meng is not a mere judicial case, but a premeditated political action in which the United States wields its regime power to witch-hunt a Chinese high-tech company out of political consideration.”

The use of the term “witch-hunt” in reference to Ms. Meng is unfortunate but his characterization of the politics is spot-on. U.S. President Trump admitted as much in an interview with Reuters. In reference to using Ms. Meng as a bargaining chip in his trade deal with China, he said:

“If I think it’s good for the country, if I think it’s good for what will be certainly the largest trade deal ever made – which is a very important thing – what’s good for national security – I would certainly intervene if I thought it was necessary.”

President Trump has just handed Ms. Meng a gift. Her lawyers will convincingly argue that the motives of the U.S. are political, not legal. Prof. Rob Currie of Dalhousie University, an expert in extradition law, agrees. “Oh yes,” he said, “He [Trump] has given her arguments, for sure (Globe and Mail, December 12, 2018).”

Trump wants to destroy Hauwei because it threatens U.S. global dominance. Canada does not extradite anyone when the motivations are political.

Now I realize that the failure of the Chinese ambassador to mention the legality of extradition is more than an oversight. It demonstrates that China is a lawless country. China has demonstrated that uncomfortable fact by the arbitrary and unwarranted arrest of Canadians Michael Korvig and Michael Spavor.

It’s uncomfortable because it demonstrates that China would not hesitate to violate any trade agreement it had with Canada that it found inconvenient.

It’s uncomfortable, as well, to awaken to the reality that our neighbour and largest trading partner is no longer our friend; whose president would use us as a bargaining chip as well.

It’s entirely possible that Trump ordered the arrest Ms. Meng to punish Canada for our failure to prohibit Huawei from entering Canada’s construction of our new 5G network.

It’s not beyond Trump’s machinations to betray anyone on a whim -as his widening circle of former advisors and friends would surely attest.

 

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Redefining pro-life

The hardening of abortion into the pillars of political parties is showing fractures.

image: Heidi Will

Whether abortion is a human right belonging to a woman or a human right that belongs to the foetus used to be a philosophical and religious debate. Now it’s about politics. Republicans in the U.S. and a majority of conservatives in Canada are against abortion. Democrats and progressives in Canada support justifiable abortions.

The abortion issue moved into political camps decades ago. The landmark decision of the U.S. Supreme Court in Roe v. Wade in 1973 declared that women had the right to choose an abortion. In response, anti-abortion groups began to rapidly mobilize and the “Human Life Amendment” was proposed.

Because it’s better to be seen as for something rather than against it, anti-abortion groups decided to call themselves “pro-life.”

Abortion supporters argue that the when life is at stake, it’s the life of the mother which matters. In a reaction to the pro-life branding, abortion supporters had to come up with a strong brand of their own. “Pro-abortion” doesn’t quite do it because women don’t necessarily want to have an abortion –they just want to shed the yoke of paternalism that dictates what’s best for them.

In response to the pro-life movement, supporters of abortion-as-an-option branded themselves as “pro-choice.” It’s a clever label in an age of commercialism because what consumer doesn’t want a choice? It also fits nicely into to the evolving image of women, and citizens in general, as individual agents rather than servants of the church and state.

Women as free-thinking-citizens is a relatively new phenomena. Only a hundred years ago, women and children were considered the property of men and property doesn’t have an opinion worth considering.

Thanks to U.S. President Trump, the tribalism of pro-life is beginning to fracture. Pro-life Republicans are conflicted by support of this misogynist president.

Tess Clark grew up in Texas and always considered support for the Republican party her “Christian duty (Globe and Mail, December 7, 2018).” All of her life the issues of abortion and immigration made voting Republican her “Christian duty.” Clark recently told The New York Times that the pro-life movement should oppose hard-line treatment of border crossers.

Clark was so sickened by Trump and his crackdown on Honduran families trying to enter the U.S. that she has redefined what it means to be pro-life. She now equates the separation of Honduran families with “a baby in its mother’s womb.” “I feel that being pro-life is being pro all life,” she said.

Chelsey Yeaton, a student at a Christian college in Illinois and a member of Young Evangelicals for Climate Action, has also redefined what pro-life means to her in environmental terms.

“If we say we’re pro-life, we have to care for people who are experiencing incredible environmental degradation …,” Yeaton said in a recent interview. “If we’re pro-life, that’s a bigger issue to me than abortion.”

Whether to have an abortion or not is obviously not a trivial matter but the decision shouldn’t be based on politics. The expansion of the pro-life movement into other aspects of a healthy life is a welcome approach.

 

Blueberries without borders

Blueberries have arrived from Peru in my local store. Next they’ll be coming from Chile, then Mexico. As spring moves north, they will arrive from Florida.  Then in late spring they’ll be ripening in Georgia, after that California and Oregon. Washington will start shipping in early July.

image: Investment Agriculture Foundation of British Columbia

The northward march of the blueberries ends in British Columbia, where the largest crops in Canada are grown and the season is long says Corey Mintz:

“Because of the warm, sunny weather blueberries need to thrive; many regions have a growing season of only four to six weeks. But the climate of BC allows for a longer season: nearly three months, from early July to late September (Walrus magazine October, 2018).”

B.C. returns the blueberry favour by sending them south -all over North America. Blueberry production in BC has grown from 4.3 million kilograms in 1980 to 61 million kilograms in 2017.

The fact Canada exports any produce at all may come as a surprise. We can’t compete with American growers for many other crops says James Vercammen, professor of food and resource economics at the University of British Columbia. Economies of scale, higher labour and land costs, give U.S. producers an edge.

But as the sun lingers over Canada in the summer, we have an advantage that Americans lack. Vercammen says that British Columbia is “now growing raspberries and blueberries like crazy.”

Things didn’t look so good at the start of the 2018 growing season. Blueberries, like one-third of the foods we eat, depend on pollination by bees.

Bees prefer a balanced diet. In recent years, honey producers have expressed concerns over the nutritional value of a blueberry diet alone. “It’s a single fruit,” said Kerry Clark, president of the B.C. Honey Producers’ Association, “It’s like going to a buffet and the only thing there is salsa. It doesn’t give you a balanced diet.”

Monoculture crops that cover vast areas aren’t very nutritious for bees. Weakened bees are more susceptible to disease and the wet spring this year meant that growers were applying more fungicides –also not good for bees.

That meant that owners were reluctant to send their colonies to blueberry fields. “It’s become less and less attractive, to the point where the beekeepers have decided not to bring thousands of colonies into the blueberries this year,” said Clark.

While blueberry production has increased, the number of bee hives has not kept up. One beekeeper predicted a loss because he couldn’t supply enough hives:

“There’s definitely going to be a shortage of bees in blueberries this year. It will be worse this year. The plants will be there, but the bees won’t be there to pollinate them, so they won’t get the berries.”

But all the worry turned out to be for nothing. As the damp spring turned into a sunny summer, blueberries thrived and by the end of the year there was a glut of the crop. The lower prices were good news for berry lovers but disastrous for farmers.

John Gibeau of the Honeybee Centre in Surrey was philosophical: “If it’s nice weather we do well. If it’s poor weather we do poorly. That’s farming.

Big Food vs. Canada’s Food Guide

The interests of the food industry don’t always coincide with healthy eating. What’s at stake is Canada’s new Food Guide. It’s a big deal.

image: Globe and Mail

Canada’s Food Guide is widely respected. Seventy-five years after its first launch, it’s the second most requested government document after income-tax forms. It’s distributed to dieticians and doctors for patient advice and to schools and hospitals for creating meal plans. The new guide will be around for a long time, so it’s important to get it right.

Understandably, big food lobbies want the new guide to endorse their products. Even intergovernmental departments disagree on what should be recommended. One agency, Health Canada, wants the new food guide to “shift towards more plant-based foods,” less red meats, and to limit “some meats and many cheeses” high in saturated fats.

Another agency, Agri-food Canada, disagrees. They are in the business of promoting the sale of red meat and dairy industries. Last year, AAFC officials wrote a memo marked “secret” in which they worried:

“Messages that encourage a shift toward plant-based sources of protein would have negative implications for the meat and dairy industries.”

The pressure on Health Canada comes from other food manufacturers as well. Recently, the “Canadian Juice Council” surfaced. Nutritionists had never heard of them before their bright orange booth appeared at the annual conference of the Canadian Nutrition Society. Nutritional biochemist Dylan MacKay said: “I’d never seen or heard of them before and I’ve been going to CNS conferences for years (Globe and Mail, November 23, 2018).”

The origin of the Canadian Juice Council was obscure despite the presence of a web page and a Twitter account (with 2 followers). Food reporter Ann Hui isn’t surprised at the obscurity:

“And no wonder. The Juice Council doesn’t exist in the way you might expect: as an institution disseminating impartial facts and information about juice. Rather, it was created by the lobbying arm of the beverage industry – in a practice known as ‘astroturfing,’ used by lobbyists in all kinds of industries to create the appearance of a grassroots movement and a larger chorus of voices than actually exists.”

Ann Hui found that the Canadian Juice Council was an invention the Canadian Beverage Association whose members include Canada Dry Mott’s, Coca Cola Canada, and PepsiCo Canada. The industry supports 60,000 Canadians workers, 20,000 of those directly.

The Canadian Beverage Association is worried about changes in the Canada Food Guide that would remove the equivalency of whole fruit to juice. The old guide says that a half-cup of juice is a substitute for one portion of fruit.

The new guide, to be released soon, will advise Canadians to avoid drinks high in sugar. One 12-ounce bottle of orange juice contains about the same amount of sugar as 12 ounces of Coke – more sugar than the World Health Organization recommends for the average adult in a single day. Excess sugar consumption is linked with heart disease, obesity and diabetes.

The government is in a hard spot –do they support an industry that employs thousands of workers in the making of an unhealthy product or the health of Canadians who consume it?

When nature gives you tar sands, make carbon fibres

Oil sands crude prices have hit rock bottom. The future could be in the tar -the bitumen. The original name for the deposits, tar sands, should be restored because that’s where their potential value exists.

Image: Mining.com

Extracting oil from tar sands is done at great cost. Huge tracts of land are stripped and the tar sands are dug up or injecting with steam. Once it’s dug up, the thick goo has to be diluted just to get it through pipelines. To turn into useable petroleum, it has to be sent to refineries thousands of kilometres away. Because there aren’t enough pipelines to get it to refineries, and because convention oil is relatively cheap, the extraction of oil from tar sands is not profitable.

Beyond the cost of extracting oil from tar sands, there is the cost to the environment. Because extraction is so energy intensive, more greenhouse gases are produced than from conventional sources. Canada is the fifth largest producer of crude oil in the world but we produce 70 per cent more greenhouse gases per barrel than global averages according to Corporate Knight magazine (Fall, 2018). That higher average is because of the tar sands.

Then there are investment pressures that are moving away from fossil fuels. Europe’s largest asset manager is increasing its “decarbonized portfolios” and so is Canada’s second largest pension fund, Caisse of Québec.

Instead of burning the stuff as fuel, a better plan would be to extract the valuable byproducts of bitumen. An Alberta government agency, Alberta Innovates, is looking to producing derivatives of tar. In their report “Bitumen Beyond Combustion,” they suggest three possibilities.

The most obvious is asphalt for roads. The global market for asphalt is currently at $65 billion and is expected to grow. The tar sands now produce asphalt but the current method of transportation requires that the product be kept very hot for transport. A better way of moving asphalt to market is to turn it into pellets and ship it to markets. An engineer for Stantec engineering who worked on the report says:

“The infrastructure, the rail cars, are out there, the global pull, the pricing mechanisms – people are building roads all over the world everyday.”

Less obvious is the production of carbon fibres. Like any organic compound, bitumen is right for making carbon fibres. The fibres have a wide variety of applications including strong lightweight composite materials used in aircraft, aerospace, and wind industries. They strengthen cement and steel.

When used on their own, they can replace steel in automotive manufacture. If carbon fibres took just one per cent of the global steel market by 2030, that would require 3 million barrels of bitumen a day, one study found.

Another surprising component of tar sands is vanadium used in making batteries and high temperature metals. While one a barrel of bitumen contains only 30 millilitres of vanadium, millions of barrels would produce a lot of the metal.

At the current value of crude oil, it’s not worth mining the tar sands for petroleum. The bitumen, once regarded as a troublesome byproduct, may be the future of the tar sands.

 

Reboot Statscan

Statscan needs to update its operating system and reboot.

They now operate on a paper system in which only 40 per cent of surveys on spending habits are returned. Those that are returned are sometimes incomplete. Respondents sometime forget to include digital purchases such as orders from Amazon, Netflix and Uber.

Return of surveys is critical in determining strategies like benchmark interest rates which are used to calculate Old Age Security and child tax benefits. Spending habits also helps policy-makers. If Canadians are spending a large amount on drugs, for example, governments could decide to create better drug coverage.

Statscan wants to modernize the way in which they collect data through digital records held by banks. In the light of privacy breaches of Facebook and other accounts, Canadians are understandably nervous.

However, Statscan doesn’t want data that we don’t already share with banks. And unlike bank information, the data will be stripped of personal information such as your name, social insurance number, address and postal code.

We should worry more about the personal data that private companies collect. Economics reporter Barrie McKenna says:

“If you’re seriously concerned about letting others see your financial records, shopping habits and internet surfing behaviour, well, that horse left the barn a long time ago.

Just think for a minute what companies such as Toronto-Dominion Bank, Bell, Facebook, Google, Amazon or the operator of the Highway 407 toll road already know about what you did today, or in the past month. Stitch it all together, and it’s your life in bits and bytes (Globe and Mail, November 4, 2018).”

This hasn’t stopped the federal Conservatives from trying to make hay from Statscan’s plan. They have labelled it “Big Brother on steroids” and an “Orwellian intrusion into the lives of Canadians.”

Politicization of the gathering of statistics undermines the vital role Statscan plays.

There is nothing Orwellian about it and data is secure. Former assistant chief statistician at Statscan, Michael Wolfson, says:

“Under the legislation, neither the courts, the RCMP, Canada Revenue Agency nor Canadian Security Intelligence Service can access the data. Internally, Statscan has designed its computer systems with all kinds of safeguards, and it is a criminal offence to use the data for any purpose other than statistics.”

The mistake that Statscan made was to assume too much. Canadians need to be consulted about the modernization of data collection that Statscan proposes. The lobby group Openmedia is critical:

“Under our current laws, many important elements that could protect our privacy while still allowing StatCan to carry out its critical work are not in place. This includes transparency – notifying us – and meaningful consent.”

There’s a trade-off of my privacy and what I get in return. I regularly reveal details of my private life every time I use an ATM for cash, log on to Facebook to connect with friends, and buy stuff from Amazon. It’s an exchange that I accept.

All the more reason to reveal my spending habits for the public good: I want my data to be used for something other than trying to sell me something.

Ten years after the Great Recession, nothing’s changed

A decade later, the crisis that threatened to take down the global financial order seems like a bad dream. Now it’s business as usual.

image: Alt-M

In Great Recession, banking institutions creaked and groaned under the weight of flawed investments. Mohamed El-Erian, CEO of a large U.S. investment management firm phoned his wife and asked her to withdraw as much money as she could from an ATM because he feared the banks wouldn’t open the next day. A hedge fund manager sent an email to a journalist during the meltdown saying: “It feels a little like the end of the world.”

But the problems have been fixed, haven’t they?  Yohann Koshy, editor for New Internationalist magazine, is not so sure:

“The world almost did end. And everything stayed the same. Time was borrowed in the form of nationalizations, cash injections and money-printing: space for the financial sector to breathe. But the air is getting thin again (July/August, 2018).”

How we got here.

We went from a stable financial period -one of the longest in centuries- to one designed to fail. The post-war era from the mid-1940s to the early 1970s brought prosperity to everyone: workers and employers alike.

This stable economic period was engineered by the Bretton Woods agreement in 1944 in which a system of monetary rules were applied to the United States, Canada, Western Europe, Australia, and Japan. A key feature of the agreement was a stable U.S. dollar to which many global currencies were pegged. The value of the dollar was linked to a quantity of gold held at Fort Knox.

“This ‘gold standard’ forced discipline on the financial system: it was much harder for banks to create credit out of thin air,” says Koshy.

Under Bretton Woods, money was tied to the value of gold and economies were tied to the goods they manufactured. The U.S., already tooled to produce military equipment, switched to produce the world’s goods.

The U.S. dollar became so popular as a global currency that not enough dollars could be printed. President Nixon ended the gold standard in 1971.

This ushered in the era of financialization. With the dollar having no tangible value, economies also became more abstract. Wall Street made money from the production of goods in other countries.

A recession was avoided in the 2000s by the lowering of interest rates. Financial institutions were awash in money and they invested it in exotic and dubious things like derivatives, credit default swaps and collateralized debt obligations. And banks gave mortgages to people to buy houses that they couldn’t afford.

As the world staggered towards financial calamity in 2008, governments injected massive amounts of money into banks to cover their bad investments. Bailouts were given to the very perpetrators of the dubious investments. The chair of Goldman Saks announced that the biggest beneficiary was “Wall Street itself.”

Nothing has been fixed. What will happen the next time the system teeters towards calamity? “Whatever the answer,” says Koshy, “the blame must not be laid at the feet of the migrants, workers and the marginalized, but on those enabling, creating and profiting from a rapacious and crisis-prone financial system.”

As the air gets a little thin in the stratospheric world of finance, we can only hope that the wizards of exotic investments remember 2008.