Canada and Taiwan on Tuesday agreed to start formal negotiations for a deal to encourage two-way foreign investments and deepen their Indo-Pacific partnership in talks that are likely to irk China.
Taiwan has been seeking greater diplomatic and moral support from major Western democracies, like Canada, as it faces growing military and political pressure from China to give in to Beijing’s sovereignty claims over the island. As part of that Taiwan has been seeking more trade deals with Western countries.
In a call with Taiwan’s top trade negotiator John Deng on Tuesday, Canadian Trade Minister Mary Ng discussed Taipei and Ottawa working together to secure new investment opportunities to support sustainable growth and ensure good jobs on both sides.
The talks about a so-called “Foreign Investment Promotion and Protection Arrangement” aligns with Ottawa’s plan to increase trade and influence in the fast-growing Indo-Pacific region.
The Taiwanese foreign ministry in a statement called it “positive progress” and said Taipei would work to complete the negotiations as soon as possible.
Late last year, Ottawa announced its long-awaited Indo-Pacific strategy that included C$2.3 billion spending to boost military and cyber security to deal with what it called a “disruptive” China.
Beijing views self-governing Taiwan as its own territory and has sour relations with Canada. Taiwan strongly rejects China’s sovereignty claims.
Taiwan, like China, has applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
It has been lobbying existing members such as Canada to back its application, saying that unlike Beijing, Taipei backs transparency and rule of law while running its own economy and doing business with other countries.
Trade between Canada and Taiwan totalled C$10.2 billion in 2021, up from C$7.4 billion in 2020, according to official figures.
Tensions between China and Canada soared in late 2018 when Canadian police detained a Huawei Technologies executive, followed by the arrest of two Canadians in China on spying charges. All three were freed in 2021 but relations remain strained.
The Chinese embassy in Ottawa did not immediately respond to a request for comment.