China-Canadian Trade Talks Open Doors for Uranium Producers

by Tom Essaye/Weiss
Wednesday, February 22, 2012 at 7:30am

While the world has been consumed watching the geo-political events unfolding in Europe and the Middle East, I think one of the most interesting events of the year quietly occurred this month between China and Canada.

You see, about two weeks ago officials from Canada travelled to China and held the largest trade meeting between the two countries in decades. The net result of those talks, the most material and fruitful in years: The signing of a declaration of intent to agree to a Foreign Investment Promotion and Protection Agreement (FIPA).

The lengthy name aside, it's an important step in further Canadian/Chinese trade, as it sets a broad framework for ensuring equitable treatment for foreign investors in both countries. Basically, it removes a large degree of risk for Chinese and Canadian firms investing with the other country by providing a legal framework and set of laws that protect foreign investors.

Now to be fair, there is tremendous legal review that has to occur before this becomes ratified between the two countries, so it's not like things are going to change tomorrow ...

But the trend of Canadian/Chinese trade is clearly improving (for context, they have been trying to get this FIPA done since 1994). While better Chinese/Canadian trade relations is a bad thing for us here in the U.S., it's a good thing for Canadian natural resource companies and transportation companies