What does the finalization of the Canada-Hong Kong Foreign Investment Promotion and Protection Agreement mean for Canada?
Prime Minister Justin Trudeau recently concluded his first official visit to China. Among other highlights, Trudeau attended the 2016 G20 Hangzhou summit, spoke to many high-ranking leaders in the Chinese government, and solidified bilateral trade agreements between Canada and China.
The leaders of both countries were able to reach a consensus on a series of issues. The two sides signed 56 new contracts and agreements worth $1.2 billion. They also agreed to strengthen cooperation in the fields of energy, clean technology, infrastructure, agriculture, transportation, financial services, science and technology.
Another major highlight was the finalization of the Canada-Hong Kong Foreign Investment Promotion and Protection Agreement (FIPA). Trudeau and Leung Chun-ying, chief executive of the Hong Kong Special Administrative Region, jointly announced the agreement’s entry into force on Sept. 6.
FIPA establishes a clear framework that will govern foreign investments between Canada and Hong Kong. According to the official press release on Trudeau’s website, “The agreement will help further promote bilateral investments between Canada and Hong Kong, and demonstrates Canada’s commitment to deepening economic ties with Asia.”
The agreement also confirms Canada’s commitment to bolstering trading ties with key economies around the world, as well as creating the right conditions for Canadian businesses to compete internationally, which in turns strengthens the middle class back home.
“Hong Kong is a logical entry point for Canadian companies interested in getting a foothold into China and Asia because of its mature trade and services driven economy that plays a central role as a regional financing, trade, and investment hub,” the press release said.
Last year, the stock of Canadian direct investment in the SAR reached $7.3 billion, making Hong Kong Canada’s third most popular destination for investment in Asia. Canadians invest in numerous sectors, including finance, sustainable technologies, agri-food, transportation, professional services, education, as well as information and communication technologies.
Negotiations which led to FIPA began in September 2014 and concluded on May 23, 2015. FIPA was officially signed in Toronto on February 10, 2016.
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