The proposed takeover of Noranda Inc. by China Minmetals Corp., a Chinese state-owned enterprise, is, I submit, not about human rights practices and labour codes in the Peoples' Republic of China.

While I respect the concerns of others on this theme, the reality is that if the developed countries of the world applied this

benchmark to all of our trade and investment relationships, I am afraid we would fall short in many other instances. By way of contrast, I am a supporter of engagement because I believe that a strong economy in countries like the Peoples' Republic of China will be the fertile ground for the development of more progressive social policies in those countries.

So why shouldn't our government approve this takeover?
The somewhat unique characteristic of this takeover is that China Minmetals Corp. is a state-owned enterprise. For me that raises a whole new set of questions.

Is it appropriate for a government to take control of any operating company -- in particular one outside its own jurisdiction? Is this one of its core businesses? What does it know about mining? What does it bring to the table? How can any synergies be realized?
This acquisition is designed to meet a policy objective of the national government in the Peoples' Republic of China. One can only presume that, given the current high cost of commodities like minerals and metals, its desire is to "backward integrate" and acquire control and ownership of this element of its raw material supply chain. To its credit, the economy in the Peoples' Republic of China is growing at an incredible rate. A consequence of this is the current upward price pressures on oil and other commodities (good news for Canada!).

If Noranda is acquired by China Minmetals Corp., will the company be managed in an environmentally sustainable way and in interest of all Noranda stakeholders (e.g. Noranda workers, communities where Noranda operates, the citizens of Canada, other Noranda shareholders, etc.)? I believe it is naive to think that the government in China and China Minmetals Corp. will be "hands-off" in the management of Noranda. That is not their style.

If China owns and controls Noranda, won't it be tempted, within the bounds of international trade laws and Canada's own transfer pricing tax policies, to offer differential pricing for the sale of metals and minerals to strategically important operations in China? Who knows what its game plan is? Count on it, though, to be very well thought out and very shrewd.

My concern is that while this acquisition might be in the public interest in China, it is less clear to me what the benefit is for Canada.

Interestingly, in the 1980s, the Japanese government orchestrated an oversupply of metallurgical coal to feed Japan's struggling steel mills, by partnering and investing in the northeast coal project in British Columbia. Guess what -- an oversupply puts downward pressure on prices! Is that the goal of the Peoples' Republic of China for metals and minerals? If so, how does that align with Canada's interests? Industry Canada's Investment Review Division will allow a takeover to proceed if it provides a significant benefit to Canada. It has yet to veto a major takeover of a Canadian company. Perhaps that is because every takeover has been in Canada's best interest. I am not so sure, and even less sure about this one. Industry Canada should have a very close look at this proposed acquisition.

Like most Canadians, I am a strong nationalist in that I take great pride in our national culture and heritage and in our national institutions. I understand the need, however, to be pragmatic in recognizing that we live in a global economy and, in general terms, we need to encourage the flow of international trade and investment. It is also clear to me that Canada's relationship with the Peoples' Republic of China is a very important one.

These facts, however, shouldn't blur our pursuit of Canada's over-arching public policy interests. Unless other facts come to light, this takeover should be rejected on that basis.