Canada-China Investment Treaty To Come into Force October 1

Two years after signing a bilateral investment treaty (BIT) with China, Canada has now ratified it and announced that it will come into force on October 1. Canada has similar treaties, known domestically as foreign investment promotion and protection agreements (FIPPAs), with over two dozen other countries. China has more than 70 such treaties in force. Nevertheless, the Canada-China FIPPA aroused particular controversy on this side of the Pacific when it was signed, both because it became enmeshed in a concurrent debate over Chinese state-owned investment in Canada's energy sector and because of fears “  wildly overblown “ about a feature common to most modern BITs, the  investor-state dispute settlement mechanism.

The Canada-China FIPPA does not aim to further open the Canadian market to investments from China, or vice versa. In that sense it is less ambitious than recent FIPPAs and investment provisions in trade agreements that Canada has concluded with other trading partners. However, it does provide substantive and procedural protections to each Party's investors with the aim of ensuring a stable and predictable legal and regulatory framework for their investments. That should be of particular benefit to Canadian investors in China. Moreover, relative to what China has provided under its other BITs to date, the Canada-China FIPPA is cutting-edge; it will offer Canadian investors protections against concerns like discrimination, arbitrary treatment and expropriation that are equal to or better than those available to other foreign investors in China.

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