Canada edges closer to investor deal with China
Trade minister Ed Fast, on a week-long trip in China, said Thursday he believes “significant” progress has been made in negotiations for a foreign investment protection and promotion agreement, which is meant to create a level playing field for foreign and domestic investors and guard against expropriation of investments.
Mr. Fast, who met his Chinese counterpart, Commerce Minister Chen Deming, earlier this week said Thursday both sides recognize the importance of such a deal, which would lay out clear, legally binding rights and obligations for both sides.
“I believe we are making significant progress in bringing these negotiations to a conclusion and I hope to report further in the coming months,” Mr. Fast said, calling such an agreement “highly advantageous” to both sides. “China wants to see more Canadian investment, certainly we want to see more Chinese investment in Canada. Having a clear set of rules under which those investments take place serves both parties.”
A foreign investment protection agreement has been under negotiation with China since 1994, though talks were set aside until after China’s accession to the WTO in 2004. By January, 2010, some 12 rounds of talks had failed to produce an agreement.
However Chinese direct investment has skyrocketed in recent years, jumping 69 per cent from 2008 to 2009 alone, largely because of Chinese interest in Canadian energy and other natural resources. Last year Chinese direct investment in Canada reached $14.1-billion. Canadian direct investment in China is also growing, though not at such an impressive rate, hitting $4.8-billion in 2010.
“Given the significant new investment in Canada from China, investor protection is not just a story of how you protect Canadian investment in China, but the reverse as well,” said Peter Harder, president of the Canada-China Business Council, in a telephone interview from Ottawa. “This is a significant step forward in ensuring the economic relationship is secured.”