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Canada - China Agreement to Promote and Protect Reciprocal Investment Coming into Force


Lawyer Neill May
Area Asia Practice


In a major step to facilitate and grow trade and investment between Canada and the People's Republic of China, the two countries signed a Foreign Investment Promotion and Protection Agreement (FIPA) in September 2012.  The FIPA has now been ratified by both countries, after a significant delay in Canada, and will come into force on October 1, 2014.  The agreement is the product of negotiations that commenced in 1994.  The FIPA, which is broad in scope, is primarily intended to protect investors against discriminatory treatment (primarily through each country’s commitment to accord to investors of the other country treatment no less favourable than it accords to its own investors), supported by an effective and meaningful dispute resolution mechanism.  The agreement, which features other reciprocal protections such as most-favoured-nation status and minimum standards of investor treatment, is subject to exceptions, including exceptions relating to investments in cultural industries, the regulation of financial institutions and the protection of essential security interests.

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