Canada and China are to conclude a Foreign Investment Promotion and Protection Agreement (FIPA) in the near future as the two countries look to boost bilateral trade and investment.

Canada's Minister of International Trade and Minister for the Asia-Pacific Gateway, Ed Fast made the announcement after having participated in a round table with members of the Canada China Business Council (CCBC) in Toronto. There, he underscored the government's commitment to boosting trade and investment with China.

Fast said: “Our government’s focus is to create jobs and increase prosperity for hardworking Canadians. One in five Canadian jobs is linked to trade. China is now the world’s second-largest economy after the United States. Therefore, it is important that we further strengthen our commercial trading relationship with this powerhouse market in order to create opportunities for Canadian workers, businesses and their families.”

Negotiations on an FIPA began in 1994, but were put on hold while China completed its accession to the World Trade Organization. Talks resumed in 2004, with twelve rounds completed since then. Canada is seeking an agreement containing obligations pertaining to national treatment, most-favoured-nation treatment, minimum standard of treatment, transparency, transfers and expropriation. The government also wants the FIPA to grant investors access to investor-state dispute settlement procedures governed by detailed rules on standing, procedural requirement and enforcement.

When concluded, Fast believes the pact will set the stage for a significant increase in two-way investment. He said: “Canadian companies doing business in China will benefit from rules that create a predictable investment environment and effective dispute settlement measures”.

China is Canada’s second-largest merchandise trading partner. Bilateral merchandise trade reached CAD57.7bn (58.25bn) in 2010, while overall trade between the two countries more than tripled between 2001 and 2010.

August 22, 2011

Source: Tax News

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