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China and Canada set for free trade talks as Harper pens multibillion-dollar dealsMonday, February 13, 2012 > 09:56:58
National Post, Canada
By Jason Fekete
BEIJING — China and Canada declared Thursday that bilateral relations have reached “a new level” following a series of multibillion-dollar trade and business agreements to ship additional Canadian petroleum, uranium and other products to the Asian superpower.
Prime Minister Stephen Harper and the Chinese leadership said Thursday the economic co-operation agreements — and billions of dollars in new private-sector deals — signed by the two countries over the past few days are unprecedented and will open the door to additional trade and investment.
The new deals further solidify a “strategic” partnership between the countries, particularly in terms of natural resources, with China’s top political leaders calling for “more large-scale co-operation” with Canada on oil and gas to feed China’s seemingly insatiable energy appetite.
Harper announced Thursday, following meetings with Chinese President Hu Jintao and Vice-Premier Li Keqiang, that the countries have struck an agreement that will allow Canadian uranium companies to “substantially increase exports to China.”
The new uranium protocol is a legally binding agreement that supplements a 1994 pact between Canada and China for peaceful uses of nuclear energy.
The agreement to ship additional uranium to China meets Canada’s nuclear non-proliferation policies and obligations, the federal government said, and “will ensure that Canadian supplied uranium is being used in China’s nuclear program strictly for peaceful, civilian purposes.”
China’s political leaders, meanwhile, say they’re interested in exploring the feasibility of a full free-trade agreement.
The two countries have agreed that a joint economic study being conducted will be completed by May 2012, “after which Canada and China will proceed to exploratory discussions on deepening trade and economic relations.”
That news follows up their announcement Wednesday that negotiations have concluded on a foreign-investment-protection agreement nearly 20 years in the making, but which still faces a legal review and ratification before it becomes law.
“The cumulative impact of these accords truly takes Canada-China relations to a new level,” Harper told corporate leaders from both countries gathered in Beijing for the fifth Canada-China Business Forum.
The prime minister will continue his four-day China trade mission with a stop in Guangzhou on Friday for a keynote speech to another business audience.
On Saturday, he’ll head to the southwestern metropolis of Chongqing, where he’ll provide more details on China preparing to loan a pair of giant pandas to zoos in Calgary and Toronto for a period of five years each.
The two governments on Thursday also announced an expansion of an air-transport agreement they hope will help increase the flow of people and goods between Canada and China, while also providing additional flight options and lower fares.
Harper also announced during his speech to the business forum that more than 20 commercial agreements — valued at close to $3 billion and involving nearly 50 Canadian and Chinese companies — have been signed during the trade mission to the Middle Kingdom.
“Canada has the resources, technological sophistication, and geo-strategic positioning to complement China’s economic growth strategy. And China’s growth, in turn, complements our determination to diversify our export markets,” Harper told corporate leaders.
“We expect to see similar success stories in Canadian energy exports to China, once infrastructure is in place.”
Harper has said building pipelines to the West Coast — such as the proposed Northern Gateway oilsands pipeline and a separate one for liquefied natural gas — is a national priority as Canada looks to ship its vast resources to Asia.
Some of the major trade deals signed Thursday feature Canadian corporate titans, such as commuter train manufacturer Bombardier Inc., which has won contracts to supply rail cars and other technological expertise to Chinese public transit systems.
Telus and Bell, two of Canada’s telecommunications giants, signed deals to upgrade their networks with equipment purchased from a major Chinese manufacturer.
Also, Canaccord Financial and the Export-Import Bank of China announced their plans to establish a $1-billion US fund dedicated to investing in Canadian natural resources.
China is looking for more oil and gas from Canada, with Chinese Vice-Premier Li saying Thursday his country wants to increase imports of energy and natural resources from Canada.
State-owned Chinese oil and gas firms have invested more than $10 billion into Alberta’s oilsands and B.C. shale gas plays over the past couple of years alone, and the two partners expect the trend will continue.
“Canada is one of the countries with a deep energy and resource reserve. China, meanwhile, is a large and stable market,” Li, through a translator, told the business forum. He called for “more large-scale co-operation” on petroleum and minerals.
“Never before has Canada-China business co-operation been so deep-based and wide ranging,” Li added.
The Chinese leadership is also pushing for the early signing and ratification of the Foreign Investment Promotion and Protection Agreement (FIPA), with Premier Wen Jiabao encouraging the two sides to further explore the feasibility of a full free-trade agreement.
While the FIPA could be ratified within months, it has taken 18 years to conclude negotiations, and observers have expressed doubt that a full free-trade deal is anywhere on the horizon.