Canada-China deals keep coming: 20 new agreements

Here are a few details of the major investment deal coming soon between Canada and China, as well as a list of what CBC chief political correspondent Terry Milewski calls a "small blizzard of incremental agreements," signed in Beijing on Wednesday and Thursday.

Beyond the government agreements, more than 20 commercial business deals valued at $3 billion were signed in Beijing on Thursday.

The big one: FIPA

Prime Minister Stephen Harper called the foreign investment promotion and protection agreement (FIPA) between Canada and China the first "comprehensive economic agreement" between the two countries.

In fact, what was signed by Harper and Chinese Premier Wen Jaibao in Beijing is not the final deal, but a declaration of intent: Now it must be legally reviewed and ratified by both governments, which for Canada will mean a debate in the House of Commons. Once both countries complete this process, it will need to be formally signed to take effect.

This deal will protect Canadians investing in China, as well as Chinese investors in Canada, from "discriminatory and arbitrary practices." Once in place, investors can have more confidence that rules will be enforced and valuable business deals will be subject to predictable legal practices.

Harper told reporters in Beijing he "absolutely" expected that it will make a "practical difference."  

"The agreement does not override existing Canadian law in regard to foreign investment and foreign investment review," Harper said. "Those laws remain in place."

Negotiations for this agreement took 18 years, and key players in manufacturing, mining and the financial sectors were consulted to get to this stage.

It's not unusual for Canada to have this kind of an agreement with a trading partner. FIPAs are in force with 24 other countries that trade with Canada, and active negotiations are underway with 10 other countries, according to the government's announcement.

New areas of government co-operation:

Consular affairs:

• An upgrade of Canada’s Consulate in Chongqing to Consulate-General.

• China welcomed the availability of multiple-entry Canadian visas for Chinese citizens, valid for a period of up to 10 years. Bilateral consultations on further simplifying visa procedures will follow.

Law enforcement:

• A "reaffirmation of their intention" to "strengthen co-operation in combatting transnational crime and repatriating fugitives in accordance with their respective laws" and "enhance judicial and law enforcement co-operation." Canada and China also agreed to launch negotiations on an agreement on the sharing of the proceeds of crime.

Taxation:

• An intent to conclude negotiations for an updated Canada-China income tax treaty, to avoid double taxation and reduce the rates of withholding taxes that apply on certain cross-border payments.

The 'blizzard' (by sector):

Agriculture:

• A new protocol, building on a 2010 agreement to restore Canada's market access to the Chinese market for Canadian beef following the 2003 BSE outbreak and resulting border closures, to allow industrial beef tallow (fat) to be imported for the first time in almost a decade. China used to be Canada's top export market for tallow ($31 million in 2002), and now Canada has a shot at a share of the $400 million in tallow China imports from around the world.
• A "co-operative arrangement on inspection and quarantine access issues" between the Canadian Food Inspection Agency and the general administration of quality supervision, inspection and quarantine of China
• A memorandum of understanding (MOU) on canola research, to address a recent fungal disease in canola and rapeseed that threatens Canada's valuable trading relationship with China in canola.  On Tuesday, Chinese aquaculture feed company Tongwei announced it will increase its purchase of Canadian canola by up to $240 million per year by 2015.
• A deal to resume of trade between Canada and China in fresh cherries.

Culture:

• A series of cultural activities in each other’s countries in 2013 and 2014.

• An agreement by the Chinese association of zoological gardens with the Toronto and Calgary zoos to provide a pair of giant pandas for 10 years of collaborative research on conservation.

Education:

• A renewed MOU extending and modifying the Canada-China scholars' exchange program, which has seen 900 students travel between Canada and China since 1973. New eligibility rules and scholarships will be in place for the next round of competitions in 2012, including eight to 12 Canadian scholarships for Chinese professionals and 20 awards for Canadian university students.

Energy:

• A continuation of the MOU, first signed in 2001 and renewed in 2006, on energy co-operation to "engage China on energy issues" through a Canada-China joint working group on energy co-operation, chaired by Natural Resources Canada and China's national energy administration, which is responsible for Chinese energy policy. The working group oversees joint research projects, exchange of expertise, and co-operation between energy companies in both countries, including the promotion of energy efficiency and renewables. It aims to both attract capital investment and improve market access for Canadian energy resources and technology.
• An agreement in principle on a legal instrument for the previously announced nuclear co-operation agreement, which will facilitate exports of Canadian uranium to China for civilian purposes (exports worth up to $3 billion for Saskatchewan uranium producers).

Fisheries:

• A MOU between the Department of Fisheries and Oceans and the Ministry of Agriculture of China on fisheries co-operation "at an early date."

Natural Resources:

• A MOU between Natural Resources Canada and the Chinese Academy of Sciences to collaborate on scientific research on sustainable development of natural resources. The government release touts benefits including new technologies for resource firms, carbon emissions reduction strategies, reduced environmental impacts and natural hazards from resource development, and new opportunities for Canadian suppliers of equipment and services.
• A MOU spelling out a "framework" for Parks Canada and China's state forestry administration to collaborate and share scientific expertise in the management of national parks, natural reserves and other protected areas. The agreement includes language around ecological restoration, conservation measures for endangered wildlife, wetlands development, and the preservation of forests and wetlands.

Science and Technology:

• Approval of seven projects, valued at $10 million, under the Canada-China framework for co-operation on science and technology and innovation, including: a diagnostic kit for acute kidney injuries, a wind energy seawater desalination system, a waste heat-recovery system to help oil refineries consume less fuel, new solar cells for renewable energy panels, a real-time multi-sensor navigational tracking device for hand-held devices, a blue-green algae bloom warning system and "next generation" large-scale geographic information systems.
• Two more calls for proposals, valued at $18 million ($9 million from each country) for joint research under the same framework. These proposals are for the development of "innovations with high commercial potential" in the areas of human vaccines and clean automotive transportation. The Canada-China joint committee on science and technology, made up of individuals from industry, academia and government, sets the priorities and oversees these projects. (To date, 21 projects ranging from nuclear power to AIDS drugs, to clean technologies for pulp and paper have received some $28 million in funding.).

Transportation:

• An announcement of the "intent to conclude" negotiations on an amendment to the Canada-China air transport agreement, to facilitate code-sharing and reduce restrictions related to the use of flights from third-country airlines, offer more flexibility in pricing and allow China Southern Airlines to carry freight between Vancouver and Los Angeles.