Chinese President Hu Jintao and Canadian Prime Minister Stephen Harper signed an agreement today to protect foreign investors in their respective countries.
The signing, at the Asia-Pacific Economic Cooperation summit in Vladivostok, Russia, comes as Harper’s government reviews Cnooc Ltd.’s $15.1 billion takeover of Nexen Inc., a Calgary-based oil and gas producer. Harper said yesterday Canada will be open to investment from China as long as the Asian country is willing to reciprocate.
“This agreement with China -- the world’s second largest economy -- will provide stronger protection for Canadians investing in China, and create jobs and economic growth in Canada,” Harper said in an e-mailed statement.
Both countries must still ratify the agreement. Canada will introduce the pact in the country’s legislature to be ratified, Harper said.
“We want to see this economic relationship continue to expand, but we want to see it expand in a way where it’s a clear two-way flow and clear benefits for both sides,” Harper, 53, said in an interview in Vancouver with Bloomberg Television before departing for the APEC summit.
The pact will protect investors against “discriminatory” and “arbitrary” practices and create a process to settle disputes with either government, according to a summary of the agreement posted by the Canadian government after the two countries concluded negotiations in February.
Harper’s Cabinet approved the signing of the investor protection agreement, according to a government order dated Aug. 29.
Investment between the two countries has been tilted toward China. Canadian direct investment in China was C$4.5 billion ($4.6 billion) in 2011, less than 1 percent of Canadian total investment in all countries, and less than half the level of investment in Canada by Chinese firms, Statistics Canada data show.
Canadian and Chinese officials completed a study on the potential benefits of a free-trade agreement between the two countries, which was released Aug. 15.
While the study urges the two countries to “continue to deepen and strengthen our bilateral trade and investment ties,” it calls for “increased regulatory clarity, efficiency and predictability in the context of direct investments in each other’s countries.”