Prime Minister Stephen Harper says Canada’s new and improved relationship with China allows him to have it both ways: he was able to bolster economic links with Canada’s second-largest trading partner on the same day that he nudged Beijing about its human-rights record.
Mr. Harper and Premier Wen Jiabao on Wednesday oversaw the signing of a statement of intent to bolster protection for Canadians investing in China. The two sides now have a draft Foreign Investment Promotion and Protection Agreement – after 18 years of negotiations – that Mr. Harper says will make a “practical difference” to Canadians doing business in this often-capricious market.
“We have for the first time a comprehensive economic agreement with China,” Mr. Harper told a news conference here. Details of the deal won’t be made public until legal reviews are carried out in both countries, but Trade Minister Ed Fast said it would include a dispute-resolution mechanism that would provide third-party judgments in cases where an investor from one country feels unfairly treated in the other.
Mr. Harper, according to Bloomberg News, also urged his Chinese counterpart to approve proposed investments by Manulife Financial Corp. and Bank of Nova Scotia.
The tentative investment deal was signed at the end of an hour-long meeting in the Great Hall of the People, during which Canadian officials say Mr. Harper spoke to Mr. Wen about Beijing’s problematic human-rights record. He also raised Canada’s disappointment over China’s move to support Russia in vetoing a proposed UN Security Council resolution censuring the Syrian government over its bloody crackdown of an uprising there.
“I raised in very clear and strong terms Canada’s position on this issue,” Mr. Harper said. “We would hope to see in the future action from the Security Council on this matter.”
Critics say Mr. Harper – who once promised to put “Canadian values” ahead of the “almighty dollar” in relations with China – has since quieted his condemnations of Beijing as the economic relationship has expanded.
The Prime Minister said Wednesday that rather than a change in the Canadian approach, it’s the Chinese side that has “gotten more comfortable” with him and his government. The two sides are now able to hold “pretty frank discussions on issues where we do not agree,” he said.
If the body language was any indication, Mr. Harper and his entourage thought they were having a good day. The Prime Minister chatted and joked with Foreign Affairs Minister John Baird throughout the signing ceremony held on the edge of Tiananmen Square, while Mr. Wen – standing to Mr. Harper’s immediate left – silently stared straight ahead.
Those inside the room when Mr. Harper and Mr. Wen had their tête-à-tête said the mood was warmer than during Mr. Harper’s only previous trip to Beijing, in December, 2009. Then, Mr. Wen rebuked Mr. Harper for not having visited during his first three years in office, a time when relations between Ottawa and Beijing fell to their coldest point in more than a decade as a newly elected Mr. Harper irked the Communist Party leadership by making the Dalai Lama an honorary Canadian citizen and staying away from the 2008 Olympics in Beijing.
A Canadian official who attended the meeting said that Mr. Harper spent only half of the session with Mr. Wen discussing trade-related issues. The other half, the official said, broached China’s human-rights record and the case of Husseyin Celil, a Canadian of Uighur descent who was arrested while travelling in Uzbekistan six years ago and deported to China where he was wanted on charges of “terrorism.” Despite his dual Chinese and Canadian citizenship, Canadian consular officials have never been granted access to him.
Mr. Harper said the investment agreement will seek to open Chinese industries to Canadian investment while China seeks a growing foothold in Canada’s natural-resource sectors. “My sense is that the willingness of the Chinese to conclude this agreement indicates to me that they do put increasing strategic importance on two-way investment between our countries,” he said.
“The devil can be in the details, and with [legal reviews required in]three languages, all equally valid, the text would have to be very carefully reviewed. Billions of dollars, at least in theory, could be in play,” said Gordon Houlden, director of the China Institute at the University of Alberta.
Mr. Wen was blunt about China's desire to buy Canadian oil. According to the official Xinhua news wire, the Chinese Premier told Mr. Harper that “China is ready to expand imports of energy and resource products from Canada.” Canadian officials described the Chinese delegation as very well informed about the debate in the United States over the frozen Keystone XL pipeline project, as well as Canada’s own desire to diversify the markets for its energy exports.
China currently doesn’t import any oil from Canada, although one of the smaller agreements signed Wednesday was the extension of an existing memorandum of understanding on energy co-operation that the Prime Minister’s Office said would “improve access to markets for Canada’s energy resources, technology and related services.” Mr. Wen also called for studies into the feasibility of a free-trade agreement between China and Canada.
Mr. Harper held up the tentative investment deal as further proof that his revamped China policy is paying dividends, following on the “approved destination status” Beijing granted Canada during his 2009 trip, a move that opened the door for an influx of Chinese tourists. “These are major things that previous [Canadian]governments were seeking and never able to achieve,” Mr. Harper said.
However, implementation of the investment agreement may be some ways off. The legal reviews could take months – or longer – and the process could foreseeably lead to a reopening of negotiations on key points. Once the reviews are complete, the deal also needs to be approved by the House of Commons.
Charles Burton, a China expert at Brock University, said he was concerned the Canadian delegation might have signed a weak investment deal in order to show dividends from Mr. Harper’s trip. “A [Foreign Investment Promotion and Protection Agreement]whose provisions are more rhetorical than concrete and subject to arbitrary interpretation by local authorities and weakened by carve-outs and escape clauses gets us nowhere,” he said.
The investment deal is the first major agreement Mr. Harper has struck with Beijing, but the unreleased details will create a political test for Mr. Harper's China policy when it eventually faces a ratification vote in Parliament.
NDP trade critic Brian Masse said he backs the principle of the agreement, but it’s the details that will tell whether Mr. Harper made real gains or accepted a weak deal just to get one. China is making major investments in Canadian energy and may want guarantees Canadians will want to examine closely, and Mr. Harper must have gained protections with teeth for Canadian firms, he said. A key test, Mr. Masse said, is whether it helps Canadian firms protect their intellectual property, like their proprietary technology, from being illegally copied and used in China. “It better,” he said.
Mr. Harper meets Thursday with President Hu Jintao and Vice-Premier Li Keqiang. The Canadian delegation, which includes five cabinet ministers and three dozen business leaders, then heads to the southern Chinese cities of Guangzhou and Chongqing.
With a file from Campbell Clark