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Economy Saskatchewan Premier presses Ottawa for Asian free-trade deals

Saskatchewan Premier Brad Wall looks at a map during a meeting with The Globe and Mail's editorial board.

Fernando Morales/The Globe and Mail

In late September, a Shanghai-bound cargo ship left the port of Seattle bearing containers stuffed with drums of uranium concentrate dug from a Saskatchewan mine, the first ever shipment of Canadian-sourced uranium concentrate to China.

For Cameco Corp., the Saskatoon-based mining giant behind the shipment, the demand from China, the world's fastest-growing nuclear energy market, has translated into two agreements struck in 2010. Those deals, combined with subsequent accords, are worth about $3-billion.

Increasing shipments to Asia, such as Cameco's, helped push the prairie province's exports to $32.6-billion earlier this year, surpassing British Columbia for the first time, according to Statistics Canada. That made Saskatchewan Canada's fourth-largest provincial exporter.

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Premier Brad Wall, who was in Toronto on Monday to speak to a business lunch at the Shangri-La hotel, used Cameco as an example and said much of the province's success is a result of seeking out emerging markets and cultivating ties with countries such as China, Indonesia, Malaysia and the Philippines.

Mr. Wall said he's now taking that message to the federal government, which he pointed out has not concluded any free-trade agreements in Asia.

"If you like the EU deal, you're really gonna like a deal with Asia," Mr. Wall said of the recent deal Ottawa signed in Brussels, adding: "We need to do better."

Mr. Wall, pointing out that Asia's economic and population growth exceeds Europe's, said it is crucial to get high-level politicians out to the faster-growing markets to help Canada's companies compete. For Cameco, October's shipment of uranium concentrate was only made possible under a newly negotiated additional protocol to the Canada-China Nuclear Co-operation Agreement, which was announced last year.

"We're ramping up production," said Cameco spokesman Rob Gereghty, who added that China has 28 nuclear reactors under construction and plans to build more than 100 reactors over the next 20 years. "We're seeing a demand for that production."

And the demand in Asia is not just for uranium. Population growth from Jakarta to Mumbai has stoked demand in the region for lentils, wheat, canola oil and other Saskatchewan products. In 2012, according to the Saskatchewan Trade & Export Partnership (STEP), the province exported roughly $11-billion of oil and gas; $11-billion of food-related products, such as cattle and various grains; and about $6-billion worth of potash, a fertilizer. Lionel LaBelle, STEP's president and chief executive officer, explains that the group – which represents more than 500 companies – champions Saskatchewan's exporters with more than 40 international trade missions each year.

"We are the only jurisdiction in Canada talking about doubling our exports," Mr. LaBelle said. "Asia makes sense for us because of the West Coast and because of access to ports. But we have a lot of work ahead of us. It's a competitive world."

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While countries such as Australia and the European Union negotiate free-trade deals in Southeast Asia, Canada's negotiations have dragged on, according to Yuen Pau Woo, the president and CEO of the Asia Pacific Foundation of Canada, which organized Mr. Wall's lunch event. In a recent interview, Mr. Woo said "the failure to close some of these deals is symptomatic of the on-again, off-again attention that's given to Asia."

Of course, negotiating free-trade deals in these markets can be tricky, Mr. Wall said. Many, such as Malaysia and China, are home to massive, well-capitalized state-owned enterprises (SOEs). A recent report in The Globe and Mail revealed that Petronas, the Malaysia state-owned oil firm that has $36-billion of investments planned in Canada, was violating a United Nations embargo by supplying fuel to military – and humanitarian – aircraft in Darfur.

Mr. Wall said state-owned firms present "a bit of a challenge," but that it is best to deal with these problems in formal trade frameworks.

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