On 12 September 2014, the Government of Canada announced it had
ratified its Foreign Investment Promotion and Protection Agreement
(FIPA) with China. The ratification occurred against a backdrop of
continuing rapid growth in China's economy and Canadian's
increasing interest in investing there. Canadian direct investment
in China was valued at CDN$4.9 billion for 2013, with China's
investment into Canada valued at about CDN$16.6 billion. China is
currently Canada's second-largest trading partner (second only
to the United States), with two-way bilateral trade of
approximately CDN$73.2 billion for 2013.
Canada and China began negotiating the FIPA over twenty years
ago in 1994. These slowed as China prepared for accession to the
World Trade Organization. Negotiations resumed in earnest in 2004.
On 9 September 2012, Canada's Minister of International Trade
and Minister for the Asia-Pacific Gateway, Ed Fast, and China's
Minister of Commerce, Chen Deming, signed the FIPA. China ratified
the deal almost immediately, but the Canadian Government did not,
due to political opposition and a Court challenge by a First
Nations group. Two years later, however, Canada has now ratified
In short, FIPAs are bilateral agreements entered into to protect
and promote foreign investments by nationals of the country
parties. They set out the respective rights and obligations of the
signatory countries with respect to the treatment of foreign
investment. FIPAs aim to ensure foreign investors are afforded
treatment not worse than similarly situated domestic investors. In
general, FIPA's provide that foreign investors: (i) cannot have
their investments expropriated without prompt and adequate
compensation; and (ii) will be treated equitably and fairly in
accordance with the minimum standard set by customary international
law. FIPA's set out a clear set of rules under which
investments are made and investment disputes will be resolved.
Like the majority of Canada's other FIPAs, the FIPA with
China includes core rights, obligations and protections (which are
essentially those found in the NAFTA, Chapter Eleven). Those
include rights, obligations and protections relating to national
treatment (post-establishment), most-favoured nation treatment
(pre-and post-establishment), minimum standard treatment,
transparency, performance requirements, transfers and expropriation
obligations and direct access to investor-state dispute settlement
for foreign investors. Canada now has more than thirty FIPAs and
Free Trade Agreements, like the NAFTA, in force. Canada's FIPA
with China will enter into force on 1 October 2014.
While that agreement mandated export measures on Canadian softwood lumber exports destined for the United States, it also protected those lumber exports from the potential imposition of onerous import measures by the U.S.
On September 29, 2016, the Supreme Court of Canada issued its first tariff classification decision since Canada signed the International Convention on the Harmonized Commodity Description and Coding System in 1998.
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