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Canada, Kuwait Sign FIPA

by Mike Godfrey, Tax-News.com, Washington

28 September 2011


Canada and Kuwait have inked a Foreign Investment Promotion and Protection Agreement (FIPA), designed to promote bilateral trade and investment.

The deal was signed by Canada's Minister of International Trade and Minister for the Asia-Pacific Gateway, Ed Fast, and Kuwait’s Minister of Foreign Affairs, Muhammad Al-Sabah al-Salim Al-Sabah. The ceremony took place on September 26, during an official visit to Canada by Kuwait's Prime Minister, Sheik Nasser Al-Mohammed Al-Ahmed Al-Jaber Al-Sabah, and was witnessed by the Prime Minister of Canada, Stephen Harper.

Exploratory talks toward a Canada-Kuwait FIPA began in 2006, and negotiations concluded in 2009. The agreement will enter into force once the ratification process has been completed in each country. According to Harper's office, once implemented the FIPA will provide greater predictability and certainty for Canadians investing in Kuwait, and offer comprehensive protection for investors in both countries through legally binding provisions.

The agreement will also help ensure foreign investors receive similar treatment to domestic investors, by guaranteeing that companies will not have their investments expropriated without prompt and adequate compensation, and that they will not be subject to treatment lower than the minimum standard established in customary international law.

The Canadian government has also said that Kuwait offers significant investment potential for Canadians, particularly in manufacturing and infrastructure. In recent years, Canada’s presence in Kuwait has grown, largely due to investment in services, including healthcare and education, engineering, oil and gas, as well as in a number of new retail franchises. In 2010, bilateral trade between Canada and Kuwait reached CAD129m (USD126m), with exports totalling CAD97m.

In addition to signing a FIPA with Kuwait, Canada has 24 others FIPAs in force, has concluded talks with Madagascar and Bahrain, and is negotiating or exploring discussions with 15 other countries.

Commenting on the deal, Harper said: “Our government is committed to promoting free trade and investment which create jobs, opportunities, and economic growth. This Agreement will encourage two-way trade and investment by providing greater predictability and certainty for investors in both countries.”

TAGS: investment | Kuwait | law | investment treaty | Bahrain | Madagascar | oil and gas | agreements | health care | education | manufacturing | Canada | retail | trade | services

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