PM ANNOUNCES AGREEMENT THAT WILL FACILITATE INVESTMENT FLOWS BETWEEN CANADA AND CHINA

More stable investment environment will contribute to jobs and growth

BEIJING, CHINA – Prime Minister Stephen Harper today announced the conclusion of negotiations toward a Foreign Investment Promotion and Protection Agreement (FIPA) between Canada and China, and witnessed the signing of a Declaration of Intent by Canada’s Minister of International Trade and Minister for the Asia-Pacific Gateway, Ed Fast, and China’s Minister of Commerce, Chen Deming.

“Investment flows between Canada and China are at an all-time high contributing significantly to jobs and economic growth in both countries,” said Prime Minister Harper. “Today’s landmark agreement will further facilitate these flows by providing a more stable and secure environment for investors on both sides of the Pacific.”

As part of the process, Canada consulted with a variety of stakeholders including those in mining, manufacturing and financial sectors.

Now that negotiations have been concluded on a FIPA between Canada and China, both countries will need to conduct a legal review of the agreement and then sign and ratify it.

The potential for increased Canadian investment in China is significant given the country is expected to become the world’s largest economy by 2020.

Standing at a record high of almost $5 billion at the end of 2010, Canadian investment in China increased by 38 percent over 2009 levels. Chinese investment in Canada the same year totalled $14 billion, an increase of 9 percent from 2009.

Canada currently has FIPAs in force with 24 countries and is engaged in active negotiations with 10 others.

This document is also available at http://pm.gc.ca

Backgrounder

CANADA-CHINA FOREIGN INVESTMENT PROMOTION AND PROTECTION AGREEMENT (FIPA)

The Government of Canada is committed to strengthening its strategic partnership with the Peoples’ Republic of China and to creating the right conditions for Canadian businesses to compete internationally. An important part of this equation is ensuring that two-way investment between Canada and other countries can take place in a stable, secure manner.

In keeping with this commitment, while in Beijing on February 8, 2012, Prime Minister Harper announced the conclusion of negotiations toward the Canada-China Foreign Investment Promotion and Protection Agreement (FIPA), and witnessed the signing of a Declaration of Intent by Canada’s Minister of International Trade and Minister for the Asia-Pacific Gateway, Ed Fast, and China’s Minister of Commerce, Chen Deming.

As part of the process, Canada consulted with a variety of stakeholders including those in mining, manufacturing and financial sectors.

A FIPA is a treaty designed to protect and promote Canadian investment abroad through legally binding provisions as well as to promote foreign investment in Canada. By ensuring greater protection against discriminatory and arbitrary practices, and enhancing predictability of a market’s policy framework, a FIPA allows investors to invest with greater confidence. Canada has consistently supported strong, rules-based investment through the negotiation of FIPAs.

Once implemented, the Canada-China FIPA will facilitate investment flows, contributing to job creation and economic growth in Canada.

In order for the FIPA to be ratified, the negotiated text must undergo a thorough legal review in English, French, and Mandarin. After the legal review is complete, the FIPA can be signed by both parties, made public, and then proceed through each country’s respective ratification process.

In Canada, the FIPA will be tabled in the House of Commons for 21 sitting-days following signature for Members of Parliament to review and debate. It will then come into force once the Governor General has given it royal assent and the Chinese ratification process has been completed.

Canadian investment in China, which surged to record levels in 2010, was valued at approximately $5 billion – an increase of 38 per cent over 2009 levels.  Investment took place in a broad range of sectors including financial services, transportation and technology.

Chinese investment in Canada reached $14 billion in 2010, an increase of 9 percent from 2009. Chinese firms are actively investing abroad and have expressed a strong interest in investing in Canada. Sectors of interest include, among others, natural resources and renewable energy.

Canada currently has FIPAs in force with 24 countries and is engaged in active negotiations with 10 others.