Canada is signing an investment protection agreement with Cameroon and launching negotiations with Kenya as it pushes to secure better rights for Canadian mining companies in Africa.
Trade Minister Ed Fast is slated to make the announcements at this week’s Prospectors and Developers Association of Canada convention in Toronto, an annual gathering of the global mining industry.
Ottawa has 26 investment treaties in force around the world. Last year, it signed 10 new ones, including seven in Africa.
But even as Mr. Fast strikes new deals, the most important Foreign Investment Promotion and Protection (FIPA) agreement that Canada has reached to date – with China – sits on a shelf in Ottawa, signed, but not ratified.
Ron MacIntosh, a former Canadian diplomat and now a research fellow at the University of Alberta’s China Institute, said Ottawa is sensitive to critics who worry the agreement would give China the right to sue the government “any time it’s not happy about something,” particularly in the wake of China-based CNOOC Ltd.’s takeover of Calgary-based oil producer Nexen Inc. in 2012.
He said all investment agreements are very similar, whether they are with Cameroon or China. But the impact of agreements in Africa tends to be more one-sided because most of the investment flow originates in Canada. Canadian investors, typically mining and other resource companies, want to protect their interests and get compensation when problems crop up, Mr. MacIntosh said.
A federal official said the agreement with Cameroon and the negotiations with Kenya are part of the government’s stated goal to “deepen our trade ties with Africa and emerging countries.”
A FIPA, the official pointed out, is an important “first agreement” to broaden relations with emerging countries. “Making sure there is the framework for investments is important,” the official added.
Cameroon and Kenya are relatively small prizes, unlike China, which already has extensive trade ties with Canada.
Canadian mining investments in Cameroon reached $61-million in 2012 and two-way trade is worth $53.5-million, according to the government. Canadian mining investments in Kenya were worth $19-million.