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CCCA_V7No1_CoverStory-FIN_CCCA 2/12/13 4:51 PM Page 28 Cover Martin Cauchon Partner, international business law group Heenan Blaikie Montreal China and Canada: What’s next? Is it time to negotiate a free-trade agreement? Shortly after signing the Canada-China Foreign Investment companies to diversify their client base, says Laura Dawson, Promotion and Protection Agreement (FIPA) in September, 2012, president of Dawson Strategic, an Ottawa-based consulting firm China’s ambassador to Canada stressed in a few high-profile specializing in international trade and investment: “Canada’s interviews that the two countries should move quickly toward a engagement with China is incredibly important. Our traditional free-trade agreement (FTA). From all indications, it appears that trading partners are either in stasis or they’re shrinking. The U.S. the Chinese enjoy doing business with Canadians and want to is a shrinking economy; the European Union is a shrinking econo- continue to formalize the relationship. my. They’re all in financial crisis. If we want to have a sustainable, And while there might be concerns about why China wants to viable economy, we have to be active in emerging markets — and move so expeditiously — access to Canada’s abundant natural China is the largest emerging market in town.” resources being front and centre — the question remains: What If Canada were to negotiate a FTA with China, market access, would an FTA with China deliver beyond the protections obtained which isn’t dealt with in the FIPA, would likely be a large part of in the FIPA? that equation. But it would introduce other rules that would likely Martin Cauchon, a partner in Heenan Blaikie LLP’s international open up business further. “The establishment of a formal FTA business law group in Montreal, says the government should begin would obviously be of greater benefit than this sort of investment negotiations as soon as possible because the Chinese market agreement because it would bring into play other rules t hat you holds a fortune of opportunities for Canadians. “In the good old would find in a FTA over and above just protections on investors. days, when people looked at China, they saw at it as a place to So, you would have cross-border trade; in particular, the removal establish a low-cost production plant,” he says. “Today, when peo- of tariffs,” says Greg Kanargelidis, a partner with Blake, Cassels ple look at China, they see it as a huge consumer market. So, now, & Graydon LLP in Toronto. “There would be other issues, such as what we’re starting to see is businesses going to China not only to intellectual property protections, cross-border trade in services, produce, but to have access to the consumer marketplace. And which would need to be covered. And so, a FTA would be far more having a border that’s more open and stable, with fewer duties, will comprehensive than this FIPA.” PIERRE CHARBONNEAU benefit our businesses.” According to Michael Hart, a professor of international affairs Furthermore, having access to that market will allow Canadian at Carleton University in Ottawa and a former official in Canada’s 28 CCCA Canadian Corporate Counsel Association SPRING 2013