KIN CHEUNG / THE CANADIAN PRESS
Last month, Prime Minister Stephen Harper led a delegation on a four-day trade mission to China. Above, Harper delivers a speech at a business dinner in Guangzhou on February 10, 2012.
In February, Prime Minister Stephen Harper led a delegation of
Canadian government officials and business leaders on a four-day trade
mission to China. It signalled a renewed focus by the Canadian government
on China. Below we assess what we believe to be four of the most significant
developments of the trip in the area of international trade and investment.
Foreign investment 1.
While in Beijing, Harper announced the conclusion of
negotiations of the Canada-China Foreign Investment
Promotion and Protection Agreement (FIPA). The deal
has been more than 18 years in the making. While
details on the provisions have not been made public, the
FIPA may contain disciplines regarding national treatment, most-favoured-nation treatment, minimum
standards of treatment, transparency, funds transfers,
expropriation protection, and an investor-state dispute
settlement mechanism. The announcement comes at a
time when investment flows between the countries
have reached record highs. Most notable have been the
recent series of acquisitions by state-connected Chinese
oil companies into Alberta’s oil sands. However, investment flows between the countries still remain low relative to the parties’ other main trading partners and,
therefore, we may see FIPA leading to significant
growth in investment in the coming years. Moreover,
FIPA may address some concerns regarding increasing
Chinese presence in the Canadian oil sands by demonstrating the Chinese government’s commitment to
opening access to its market to Canadian firms, including oil and gas exploration and services companies.
Uranium mining 2.
The countries announced a protocol to give Canadian
uranium producers greater access to China’s nuclear
industry. The protocol supplements their 1994 agreement for Co-operation in the Peaceful Uses of Nuclear
Energy, and will govern the export of Canadian uranium to China. Details have not been provided. However,
according to the Canadian government, it fully accords
with Canada’s longstanding nuclear non-proliferation
policies. Canadian companies such as Cameco Corp. are
likely to benefit by supplying Chinese requirements
for uranium concentrate.
The countries announced a protocol to
give Canadian uranium producers greater
access to China’s nuclear industry.
Andrew Thompson and Prakash Narayanan,
Blake, Cassels & Graydon LLP
Pipelines and oil exports 3.
Although not subject of any official announcement, while in China, Harper commented that he
is serious about his government facilitating the
diversification of Canada’s export markets for oil.
The recent rejection by the U.S. government of the
Alberta-Texas Keystone XL pipeline has increased
the urgency for Canadian producers to look to
other foreign markets, particularly China. Given
the stalled Keystone pipeline, the proposed construction of twin pipelines between Burderheim,
Alta., to Kitimat, B.C., through Enbridge’s Northern Gateway pipelines project has become the new
focus of attention. The westbound pipeline will
facilitate the transport of Canada’s crude oil to
Asian markets. However, the project faces regulatory hurdles and potential legal challenges from
environmental and aboriginal groups. Regardless
of the outcome, Harper’s public support of the project while visiting China suggests that the Canadian government is placing increasing emphasis
on facilitating trade with China.
See China Page 15