* Canada, China sign deal on investment after 18 years
* Canada wants to boost relatively modest trade with China
* Beef deal should allow resumption of beef, tallow exports
By David Ljunggren
BEIJING, Feb 8 China and Canada on
Wednesday signed a series of deals to boost modest levels of
bilateral trade and finished negotiations on a foreign
investment protection pact after 18 years of talks.
Canadian Prime Minister Stephen Harper, keen to boost oil
exports to China and thereby reduce reliance on the U.S. market,
said the investment agreement would help increase trade.
"This is an historic step forward ... it will provide
greater predictability and protection for Canadians seeking to
do business in China," he told a news conference after talks
with Chinese Premier Wen Jiabao.
Both nations will need to conduct a legal review of the deal
and then sign and ratify it before it can take effect.
The relatively small amount of bilateral trade -- which
amounted to less than C$60 billion ($59.4 billion) in 2010 --
shows how much potential there is for growth.
Harper said Canadian investment in China rose by 39 percent
in 2010 from 2009 to hit nearly C$5 billion. Chinese investment
in Canada the same year totalled $14 billion, an increase of 9
percent from 2009.
Harper wants to ramp up exports and reduce Canada's reliance
on the huge U.S. market. He is particularly keen to increase
exports of oil.
Ottawa intensified its calls to diversify exports last month
after Washington vetoed a pipeline that would have carried crude
from the western province of Alberta to Texas.
China does not import any Canadian oil, but says it is
interested in doing so. The two nations also signed an extension
of a memorandum of understanding on energy issues covering oil,
gas and nuclear energy as well as trade and investment.
Harper said the investment deal would not override existing
Canadian laws, which say the government can reject foreign
takeover bids it deems not to be in the national interest.
Chinese firms have spent more than C$5.5 billion ($5.4
billion) on Canadian energy assets in the last seven months
alone, a trend which could eventually challenge the government.
A major poll last year showed 76 percent of Canadians
opposed the idea of a state-owned Chinese firm trying to buy a
controlling stake in a Canadian company.
"We have, I think, a pretty open regime when it comes to
Chinese investment in Canada and I've obviously raised ... with
the Chinese certain cases where we're concerned about
non-approval of existing investments by Canadians in China and
we expect to see even-handedness on this going forward," he
Officials said Harper was referring to problems suffered by
Bank of Nova Scotia and Manulife.
A Chinese Foreign Ministry statement paraphrased Wen as
telling Harper that China was willing to increase its imports of
Canadian energy and natural resources.
China wants to establish a "long-term, stable and
multi-faceted cooperative partnership relationship in the field
of energy resources", Wen said, without elaborating.
Both countries should look at the possibility too of signing
a free trade agreement, Wen added, in the brief statement
carried on the Foreign Ministry's website(www.mfa.gov.cn).
The two sides also signed a deal which Canadian officials
said should allow the immediate resumption of Canadian beef and
tallow exports after a nine-year pause.
Canadian officials said the deal on beef should allow the
immediate resumption of beef and tallow exports, which Beijing
halted in 2003 after Canada found a case of mad cow disease.
China committed itself in 2010 to resuming trade in Canadian
beef and tallow. However, commercial trade has not resumed
because of Beijing's standing restrictions on beef containing
the growth enhancer ractopamine.