Prime Minister Stephen Harper has spent a busy week deal-making in The Middle Kingdom. Warming relations with China has been a top diplomatic priority for the Harper government and if the list of agreements made during this trip is any indication it looks like things are heating up between the two countries.
Global News looks at the highlights of the trip so far and what impact they could have.
The game-changer
A free trade deal with China seems to be inching toward reality driven by agreements signed between Harper and the Chinese government.
Harper laid the groundwork for Canada’s first “comprehensive economic agreement” with China on his trip. It’s called a foreign investment promotion and protection agreement (FIPA), is meant to protect Canadian and Chinese investors operating in each other’s countries from “discriminatory and arbitrary practices.”
The deal comes as Canadian investment in China reached record levels in 2010 to $5 billion. Chinese investment in Canada was valued at $14 billion during the same period.
All that’s left is to sign the deal and pass it through Parliament. Both sides signed a declaration of intent to finalize the agreement and shepherd it through in their respective countries.
Along with the FIPA, Canada and China agreed to complete an economic study in May, which will be the foundation for new talks about deepening trade and economic relations.
The fuzzy one
China is expected to send two furry ambassadors to Canada as a sign of goodwill. Two giant pandas will soon immigrate from China to zoos in Calgary and Toronto, where they will spend five years in each city. Securing pandas is a highly symbolic gesture on behalf of the Chinese and has been a goal of prime ministers going back to Trudeau. Harper will be the first to seal such a deal, if it is indeed signed. Canada has had a pair of pandas in the past. Qun Qun and Xi Xi called Calgary home for a brief time in 1988 at a cost of $4 million to Canadians. The costs and other details of the deal won't be made public until it is announced later this week.
The one that won’t happen
Common ground on Syria won’t be found on this trip. Canada has called for Syrian forces to stop killing their own citizens and for President Bashar al-Assad to step down. The U.N. Security Council recently put forward a resolution called for the same, but China vetoed it. Harper said he raised the issue in “very clear and strong terms,” adding that he hopes to see future action from the Security Council on this matter. It is estimated that more than 5,000 people have died in the violence.
The others
Business deals: A productive part of Harper’s trip has been the trade mission, with Canadian companies signing 23 commercial agreements worth $3 billion. Bombardier won contracts to supply rail cars for China’s public transit systems. Telus and Bell will be upgrading their networks in China, and ClevrU Corporation will provide an e-learning program.
Agriculture deals:Canadian beef and its fat will be welcomed into China for the first time in almost a decade. The products were banned following the 2003 BSE outbreak in Canada. According to the Canadian Cattlemen’s Association, China used to be the top importer of industrial tallow (fat) prior to 2003, with Canadian exports valued at $31 million. The product is used in soaps, cosmetics, biodiesel and lubricants and since 2003 China’s global imports of tallow have grown to $400 million a year. The Canadian industry hopes to win back a $110 million market share.
The government also signed a research agreement in the hope of reopening the Chinese market to canola products, after Beijing restricted canola seed imports from Canada in 2009 due to concerns over the spread of a disease called blackleg. Canada will fund a joint research project to help prevent the risks posed to China’s canola crops from the disease. The Canadian canola industry currently exports $1.8 billion worth of products under the current restrictions.
Science and tech: Canada and China will jointly support seven projects valued at $10 million. The projects range from a diagnostic tool for acute kidney injury to a desalination system powered by wind energy to geographic information systems.
Air travel: Agreements on air travel are one of the lowest-hanging fruit on international trips and have been a priority of the Conservative government, which has signed or expanded such agreements with 60 countries. This new agreement with China will help Canadian and Chinese air carriers to expand services through code-sharing, will cut government red tape, and will allow China Southern Airlines to grow its freight services. The agreement will have to be passed through Parliament.
Double taxation: Agreements on double taxation are fairly standard between trading partners. Canada and China committed to finalize an update on their current deal and shepherd it through their domestic processes. Double taxation is something generally experienced by businesses or people working abroad and refers to being taxed by both countries on the same income.
Energy: Canada and China signed an agreement to cooperate on their energy interests. The Harper government is committed to diversifying Canada’s energy partners, a desire fueled by the U.S. government’s recent rejection of the Keystone XL pipeline. China is the largest energy consumer in the world and has growing investments in the Canadian oil and gas industries. The deal is meant to facilitate cooperation on energy policy, trade and investment, oil and gas, nuclear energy and renewable energy. The Canadian government marketed the deal as a way to attract investment in and market access for Canada’s energy resources.
As if to reinforce the pledge of cooperation, Harper and the Chinese government reached a deal to increase Canadian uranium exports to China, the fastest-growing market for the product. The text of the legally-binding document will be finalized over the next few months. Canada’s nuclear energy industry currently generates about $1.2 billion in exports every year.
Education: Canada and China renewed and expanded their scholars-exchange program. The program, first established in 1973, has enabled more than 900 scholars to travel between the two countries. The new program will come into effect in fall 2012 and expands the eligibility criteria for Canadians who wish to study in China. In 2010, 60,000 Chinese students studied in Canada and contributed almost $1.9 billion to the Canadian economy.
Crime: Harper took his tough-on-crime agenda overseas and, together with China, pledged to strengthen cooperation on combating transnational crime and repatriating fugitives. The two countries will also explore what to do with the proceeds of crimes committed by foreign nationals.
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