(To read the full bulletin in Chinese, click here.)
On September 12, 2014 the Canadian government announced that the
foreign investment promotion and protection agreement (FIPA)
between Canada and China has been ratified and will come into force
on October 1, 2014.
The Foreign Investment Promotion and Protection Agreement
The FIPA, which was signed in 2012 and has been under
negotiation since 1994, is expected to facilitate bilateral
investment flows by providing a more stable and secure investment
environment. It is designed to protect and promote Chinese
investment in Canada as well as Canadian investment in China
through legally binding provisions. By ensuring greater protection
against discriminatory and arbitrary practices, and by enhancing
predictability of a market's policy framework, the FIPA will
allow investors to invest with greater confidence. The FIPA also
allows for international arbitration in cases of disputes.
Significance of the Agreement
The FIPA represents a culmination of an ongoing process of
economic engagement between Canada and China which has seen very
significant growth in bilateral trade and investment in recent
years. It provides Chinese and Canadian investors with the
confidence needed to further their investments in Canada and China,
respectively, by mandating increased transparency, stability and
nonpartisan dispute resolution. We note that the United States does
not yet have a bilateral investment treaty with China. The
ratification of the FIPA by the Canadian government, ahead of Prime
Minister Stephen Harper's expected state visit to China later
this fall, provides a clear signal of Canada's commitment to
its growing bilateral economic relationship with China.
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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.
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