Historic Canada-China trade agreements benefit both mining sectors

After 20 years of negotiations, Canada and China are closer to ratification of a Foreign Investment Promotion and Protection Agreement that may benefit mining and mining services in both nations.

Author: Dorothy Kosich
Posted: Thursday , 09 Feb 2012

RENO -

The Canada Mining Innovation Council applauded Wednesday's announcement by Prime Minister Stephen Harper that Canada and China completed negotiations on a historic Foreign Investment Promotion and Protection Agreement (FIPA).

Negotiations for this agreement took 18 years and major players in mining, manufacturing, and the financial sectors were consulted to get to this stage. Harper and Chinese Premier Wen Jaibao Wednesday signed a declaration of intent which must be legally reviewed and ratified by both governments.

If ratified, Canadian mining companies would enjoy more protection and promotion of their Chinese investments through legally-binding rights and obligation.

Wen also called for studies into the feasibility of a free-trade agreement between China and Canada.

Jiang Shan, minister counselor from China's Ministry of Commerce, told China Daily, "Chinese enterprises could make forays into or add investment in the categories of coal, iron ore and potash manure."

Harper's trip was part of a strategic push by Canada to more closely align itself with China and reduce Canada's reliance on the U.S. in the wake of the Obama Administration's decision to reject the TransCanada Keystone XL pipeline, which would have shipped Canadian oil sands from Alberta to the U.S. Gulf Coast.

China is Canada's second-largest trading partner, after the United States, and a major customer for Canadian natural resources and agricultural products.

Wen, a former geologist, said, "China is ready to expand imports of energy and resource products from Canada and enhance cooperation in clean and renewable energy, energy-saving, environmental protection, and the peaceful use of nuclear energy."

During his five day trip to China, which began late Tuesday, Harper is leading a delegation of more than 40 Canadian executives.

The new Foreign Investment Promotion and Protection Agreement aims to protect Canadian companies from discriminatory regulations to make investing in China easier and more stable for Canadian companies. Harper noted Canadian governments have sought such an agreement for almost 20 years.

"This agreement is a historic step forward," Harper observed. "We also have signed agreements dealing with air transportation, agriculture, double taxation, energy, and science and technology."

Harper and Wen also witnessed the signing of a Memorandum of Understanding on Sustainable Development of Natural Resources. The MOU between Natural Resources Canada and the Chinese Academy of Sciences calls for cooperation on scientific research on sustainable development of natural resources.

Canadian Mining Innovation Council (CMIC) President Engin Ӧzberk said, "We are happy to collaborate internationally on advancing R&D in the mining sector, and particularly for environment and safety. ...In particular, the new MOU on Sustainable Development of Natural Resources may focus mutual interest on innovation in this area."

CMIC is an industry-led partnership of companies, governments and academia aimed at increasing the amount and focus of research and innovation in the Canadian exploration and mining industries. The group plans to engage researchers across Canada "to help put in place the research needed for a sustainable Canadian mining sector."

In an Aug. 10, 2011, news release, the Mining Association of Canada said, "Completing a FIPA with China and making strong progress on the FTA with India would be significant achievements over the coming months."

MAC encouraged the Canadian federal government "to continue with its active trade agenda through negotiation and where possible finalizing foreign trade agreements and foreign investment protection agreements."

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