Canada Seeks Asia-Pac Trade Linkages

by Mike Godfrey, Tax-News.com, Washington

17 November 2011

Canada's Finance Minister Jim Flaherty has visited China in an effort to strengthen trading and economic ties, while his colleague the Minister of International Trade Ed Fast has wrapped up a productive trade ministerial meeting at the 2011 Asia-Pacific Economic Cooperation Forum.

Flaherty travelled to China to bolster the bilateral relationship, as part of the government's continuing commitment to create jobs and growth. He met with senior Chinese officials and business leaders in Beijing, and addressed the Canada China Business Council. There he said: “Canada places a very high priority on working closely with China to strengthen the trading relationship of our two countries, and to address both ongoing and emerging challenges that face the global economy.”

At present, China is Canada’s second largest merchandise trading partner and third largest export market. Since 2005, China’s foreign direct investment in Canada has increased fourteen fold, reaching CAD14.1bn in 2010. There has also been considerable progress in portfolio investment, notably under China’s Qualified Domestic Institutional Investor program. “This increased interest in building partnerships with Canadian banks and insurance companies is a vote of confidence in the soundness of Canada’s financial system,” Flaherty argued.

In addition, Flaherty attended the opening of the Toronto Stock Exchange office in Beijing, an event he said “demonstrates the opportunities that Canadian businesses see to further their relationship with China.” Flaherty stressed: “Our government is committed to continued growth in its relationship with China. Both of our countries emerged from the global financial crisis in a position of strength. Together, we can continue to build on those strengths and demonstrate the kind of leadership needed for a sustainable global recovery.”

Also seeking to bolster Canada's international standing was Ed Fast, who is also Minister for the Asia-Pacific Gateway, in his attendance of the APEC forum in Honolulu. At the meeting of 21 member economies bordering the Pacific, Fast supported free and open markets, green growth and efforts to reduce barriers to small and medium-sized enterprises. He also endorsed APEC’s goal of greater economic integration through enhanced regulatory cooperation and conveyed Canada's intent to enter into formal consultations with members of the Trans-Pacific Partnership (TPP) on Canada’s possible participation in negotiations. Since 1994, investment holdings in Canada by APEC economies have risen by an average of 7.2% per year, reaching CAD343.3bn (USD335bn) in 2010, while the member countries now account for over 80% of Canada's total merchandise trade.

In addition to pursuing key objectives in the group sessions for trade ministers, Fast held separate discussions with his counterparts from nine APEC member economies, including Australia, China and the United States. Canada has a number of initiatives already under way in the region, including a joint economic study with Japan on a possible economic partnership agreement and a working group with China to study areas where the two economies are complementary.

Fast commented: “Canada has strong and growing ties to the Asia-Pacific region. We recognize the TPP as a means to further strengthen those ties and contribute to what promises to become a broadly-based vehicle for economic integration in the region, a goal we all share as members of APEC...Our government’s top priority remains jobs and the economy. Canada supports strengthening economic cooperation in the Asia-Pacific region by working to address the issues that businesses confront today. We all have a collective interest in reducing the time, cost and uncertainty of moving goods and services through Asia-Pacific supply chains.”

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