Analysis of McClearns Closed for Business - Essay Example

? Analysis of McClearn’s Closed for Business Introduction This essay is a summary and analysis of McClearn’s article, Closed for Business, which focuses on increased restrictions on foreign investors by the Canadian government especially after the recent financial crisis. The core argument or the thesis is that the Canadian government has been causing confusing amongst investors by blocking some bids from foreign investors without clear explanations. The author concludes that Canada could be closed for foreign business. The author has supported the argument using evidence of various companies that have been prevented from investing in Canada without any explanations from the government. Moreover, the author argues that Prime Minister Visit to china to encourage investors from china to invest in Canada has been received as a threat by American investors. Additionally, the Canadian government appears to be contradicting the prime ministers statement by rejecting bids from foreign companies wanting to invest in Canada. Another argument to support the thesis statement is that the Canadian government under Prime Minister Pierre Trudeau introduced Foreign Investment Review Act (FIRA) in 1973 and the Investment Canada Act (ICA) in 1985. The two acts were supposed to aid in setting up guidelines to be followed by foreign investors. However, there were no changes in the application and endorsement process. This has added to the confusion since the Canadian government is not clear on the requirements that foreign companies should meet in order to be allowed to invest in Canada. Although the author argues that Canada has been blocking investors, some parts of the article, arguments, and examples appear to contradict the main argument while others do not contribute to the argument. For example, the author argues that foreign investors are being blocked from investing but still claims that 90% of foreign applications for takeover were rubberstamped. This is considerably high and does not show presence of any obstacle. On the contrary, the argument depict that Canada is still open for foreign investments (McClearn 34-36) Summary According to McClearn Canada was built using money obtained through the foreign investors. British investors financed the building of railways, buildings, canals and most of the infrastructures while American Industrialist was responsible of building most industries and manufacturing plants. Over the past, Canada has always been open and allowed foreign companies to invest. Around February, the Canadian prime minister personally visited China to inform the Chinese government that Canada was open for foreign investment. However, things have changed rapidly, Canada has been vetting foreign company, and a considerable number of foreign companies have been prevented from Investing in Canada. Such companies include Malaysia Petroliam Nasional Berhad (Petronas) and Lowe’s. Furthermore, there is fear that the Canadian government will reject the offer for Nexen by China National Offshore Oil Corp. Moreover, the Canadian Government has been showing mixed signals. McClearn views such moves as a threat to foreign investors since it appears like the Prime minister, Stephen Harper is contradicting himself (McClearn 34-38). Although Canada argues that it is open for investors from various countries including the upcoming China and Malaysia, investors from the two countries have been treated coldly through rejection of their bids. Moreover, the Canadian government has not given any explanations for the rejections which has created a chill amongst the investors (McClearn 35-36) Analysis of the Arguments  The statements and the evidence are sufficient to persuade the reader that the argument is sound. Almost all the arguments and statements made are followed by examples. For example, the argument that Canadian government is not giving enough explanations for rejection of investments by most companies has been supported by examples of several companies. Such companies include the move to block Malaysia’s Petroliam Nasional Berhad from acquiring Progress energy resources for $ 15.1 billion was not explained. Lowe’s attempt to acquire Quebec was opposed by Canadian provincial officials without any explanations. Another example was CRTC move to reject Bell Canada’s bid for Astral Media. The above rejections were not explained and were against claims by Prime Minister Stephen Harper as well as his lieutenants who repeatedly declare that Canada is open for all foreign investors with the aim of diversifying (McClearn 34-36). Another unexplained action was by Industry Minister Tony Clement who blocked the deal by BHP Billiton to purchase Potash corp. Although it was clear that selling Potash Corp would lead to great losses in terms of Tax, there were no formal explanations given. This is a threat to investors who cannot understand the conditions that Canada wants them to meet for them to invest in Canada (McClearn 36). Another well-supported argument is the claim that the Canadian government has been creating confusion amongst its investors. This has been clearly explained with examples. For example, the Harpers visit to China and routine delegations to Asia to encourage investors to invest in Canada caused confusion amongst American investors. Although the argument that Canadian government has been discouraging investments from some investors is not fully supported. Some examples used by the author indicate that the Canadian government has recently changed its positive attitude toward investors. For example, the move by Jim Prentice to burn a transaction arguing that he was protecting MDA’s space technologies to ensure it remained under Canadian control depicted changed attitude (McClearn 35-36). Although most of the arguments are sound, there are some counter-arguments in the article that might make some arguments appear unsound. For example, the argument that Canada is closed for foreign investments is not convincing. This is because the author has provided evidence that most companies applying for takeovers in Canada are successful since the Canadian minister rubberstamp almost all applications (McClearn 35). The author’s arguments are at times contradictory. For example, McClearn (37) argues that Canada has been rejecting bids from Asian countries such as Malaysia and there is fear it might not endorse bids from China. However, the author later claims that “Canada has encountered buyers of less familiar variety: State-owned companies and sovereign wealth funds from emerging markets like China and Malaysia” ((McClearn 35). This does not indicate a closed Canada. It shows that other countries are realizing the willingness of Canada to do diversify and attempting to invest. In some areas, the article drifts off into irrelevant examples, which could distract the reader from potential weaknesses in the argument. For example, the argument that TransCanada Corp’s attempt to construct tarsands oil pipeline in the U.S. stumbled has been wrongly placed. This is because the company was investing in U.S. and not in Canada. The example has been used to distract the reader from recognizing the lack of evidence to support the argument that Canadian delegations to Asia have been pointless (McClearn 36) The author uses loaded rhetorical language to persuade the reader. For example, the statement “If nationalists hoped these measures presaged an era of keeping the Yankee barbarians at bay, they were to be sorely disappointed” (McClearn 35) has been used to emphasize the argument that the Investment Canada Act (ICA) did not serve its purpose. The act was aimed at regulating the endorsement of foreign investors by a federal agency by first identifying the benefits and hazards of particular transactions. Another example of rhetoric language is when the author uses examples of 1970’s Britain Labor government to discourage foreign investment. The example is meant to enable the leader relate to the Canadian issue under discussion. Moreover, the author compares the current situation in Canada to that in Argentina when it nationalized YFP Oil Company. Though the moves in Britain and Argentina were too radical, the author used the examples to imply that Canada could be heading there too (McClearn 38) Conclusively, the article Closed for Business by McClearn is believable since the author has used several credible examples. The article is convincing that the Canadian government has changed its ways of dealing with investors. Moreover, the author provides evidence to show that recent actions by Canadian government are contradicting their commitment to diversify investment. Moreover, the evidence given in the article shows that Canadian government has been confusing investors. However, some arguments are confusing and do not support the thesis statement. Such arguments include claims that most of the applications by foreign investors to invest in Canada have been rubberstamped. This does not indicated closure of Canada to foreign investors. Works Cited McClearn, Matthew. "Closed for Business." Canadian Business Nov 26 2012: 34-8. ABI/INFORM Complete. Web. 29 Jan. 2013 Read More