For a trading nation such as Canada, access to foreign markets has long been a key concern. In 2012, the Canadian government concluded a bilateral investment treaty (BIT) with China, so as to better protect Canada’s investments in this big expanding market. China’s communist regime, coupled with the importance of the country, has seemingly caused the Canada-China BIT to differ from the Canadian BIT model, both in terms of substantive provisions and the investor-state dispute settlement mechanism. Drawing on a legal-political analytical approach, the article: 1) looks at some key provisions on investment protection in the Canada-China BIT and 2) discusses the ways in which this BIT marks a departure in Canadian foreign investment policy. It also considers disagreements among legal scholars and commentators as to the implications of these differences, particularly with respect to the non-reciprocal character of the BIT to China’s advantage.
FIPA Model (2004). Agreement between Canada and for the Promotion and Protection of Investments. https://www.italaw.com/documents/Canadian2004-FIPA-model-en.pdf
Canada-China BIT (2012). Agreement between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments. (Canada-China BIT). Signed 9 September 2012, Effective 1 October 2014. https://international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/ china-chine/fipa-apie/index.aspx?lang=eng&_ga=2.147378805.313717083.1555069783- 2088686874.1538764564
American Journal of International Law (AJIL) (2018). Symposium on Simon Batifort and J. Benton Heath, “The New Debate on the Interpretation of MFN Clauses in Investment Treaties: Putting the Brakes on Multilateralization”. AJIL Unbound, 112. https://doi.org/10.1017/ajil.2017.77 https://www.cambridge.org/core/journals/american-journal-of-international-law/ajil-unbound- by-symposium/simon-batifort-and-j-benton-heath-the-new-debate-on-the-interpretation-of- mfn-clauses-in-investment-treaties-putting-the-brakes-on-multilateralization
Batifort, S., & Heath, J. B. (2017). The New Debate on the Interpretation of MFN Clauses in Investment Treaties: Putting the Breaks on Multilateralization. American Journal of International Law, 111, 873-913.
Berger, A. (2015). Hesitant Embrace: China’s Recent Approach to International Investment Rule-Making. Journal of World Investment & Trade, 16, 843-868. https://doi.org/10.1163/22119000-01606003
Bonnitcha, J., Poulsen, L. N. S., & Waibel, M. (2017). The Political Economy of the Investment Treaty Regime. Oxford: Oxford University Press.
Boscariol, J. W., & Potter, S. V. (2012). A Primer on the New China-Canada Bilateral Investment Treaty. McCarthy Tetrault, 3 October. https://www.mccarthy.ca/en/insights/articles/primer-new-china-canada-bilateral-investment-treaty
Buckley, P. J. (2010). Foreign Direct Investment, China and the World Economy. Basingstoke: Palgrave Macmillan. https://doi.org/10.1057/9780230248328
Cao, H., & Poy, V. (2011). The China Challenge: Sino-Canadian Relations in the 21st Century. Ottawa: University of Ottawa Press.
Carter, J. (2009). The Protracted Bargain: Negotiating the Canada-China Foreign Investment Promotion and Protection Agreement. Canadian Yearbook of International Law, 47, 197-260.
Cole, T. (2012). The Boundaries of Most Favored Nation Treatment in International Investment Law. Michigan Journal of International Law, 33, 537-586.
Collins, D. (2016). An Introduction to International Investment Law. Cambridge: Cambridge University Press. https://doi.org/10.1017/CBO9781316675687
Comprehensive Economic and Trade Agreement (CETA). Signed 30 October 2016, Effective (Provisionally) 21 September 2017. https://international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/ agr-acc/ceta-aecg/text-texte/toc-tdm.aspx?lang=eng
Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention). Signed 18 March 1965, Effective 14 October 1966. https://icsid.worldbank.org/en/Documents/icsiddocs/ICSID%20Convention%20English.pdf
Copper, J. F. (2016). China’s Foreign Aid and Investment Diplomacy (Vols. 1-3). Basingstoke & New York: Palgrave Macmillan.
Côté, C.-E. (2006). Digest of International Economic Law in 2004: III. Investissement. Canadian Yearbook of International Law, 43, 486-503.
Côté, C.-E. (2012). Le Canada et l’investissement direct étranger: Entre ouverture et inquiétude. In M. Arès, & E. Boulanger (Eds.), L’investissement et la nouvelle économie mondiale: Trajectoires nationales, réseaux mondiaux et normes internationales (pp. 241-313). Brussels: Bruylant.
Côté, C.-E. (2013). Digest of International Economic Law in 2012: III. Investissement. Canadian Yearbook of International Law, 50, 363-382.
De Mestral, A. (2014). The Canada-China BIT 2012: Perspectives and Implications. Columbia FDI Perspectives No. 129, 2 September. http://ccsi.columbia.edu/files/2013/10/Perspective-de-Mestral-Sep-2-2014-Publication-.pdf
Deng, P. (2007). Investing for Strategic Resources and its Rationale: The Case of Outward FDI from Chinese Companies. Business Horizons, 50, 71-81. https://doi.org/10.1016/j.bushor.2006.07.001
Deng, P., Yang, X., Wang, L., & Doyle, B. (2017). Chinese Investment in Advanced Economies: Opportunities and Challenges. Thunderbird International Business Review, 59, 461-471. https://doi.org/10.1002/tie.21903
Dolzer, R., & Schreuer, C. (2012). Principles of International Investment Law (2nd ed.). Oxford: Oxford University Press. https://doi.org/10.1093/law/9780199651795.001.0001
Dugan, C. F., Rubins, N. D., Wallace Jr., D., & Sabahi, B. (2008). Investor-State Arbitration. Oxford: Oxford University Press. https://doi.org/10.1093/law:iic/9780379215441.book.1
Fortier, L. Y. (2009). The Canadian Approach to Investment Protection: How Far We Have Come! In C. Binder, U. Kriebaum, A. Reinisch, & S. Wittich (Eds.), International Investment Law for the 21st Century: Essays in Honour of Christoph Schreuer (pp. 525-543). New York: Oxford University Press.
Fuchs, P. (2013). Open for Business. National, Canadian Bar Association, January-February. http://nationalmagazine.ca/Articles/January_-_February_2013/Open_for_business.aspx
Gazzini, T. (2016). Interpretation of International Investment Treaties. Oxford & Portland, OR: Hart Publishing.
Government of Canada (a). Trade and Investment Agreements. https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/index.aspx?lang=eng
Government of Canada (b). Factsheet: China. https://www.canadainternational.gc.ca/china-chine/bilateral_relations_bilaterales/China-FS-Chine-FD.aspx?lang=eng
Government of Canada (c). Exploratory Discussions on a Possible Canada-China Free Trade Agreement. https://international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/ agr-acc/china-chine/fta-ale/background-contexte.aspx?lang=eng&_ga=2.114699207.1946135890. 1549559098-2088686874.1538764564
International Law Commission (ILC) (2015). Study Group on the Most-Favoured-Nation Clause: Final Report. UN Doc. A/CN.4/L.852. United Nations, General Assembly, International Law Commission, 67th Session. http://legal.un.org/docs/?symbol=A/CN.4/L.852
Knigge, M. (2013). China Investment Deal Raises Red Flags in Canada. DW Made for Minds, 26 April. http://www.dw.com/en/china-investment-deal-raises-red-flags-in-canada/a-16775194
Leblond, P. (2017). Toward a Free Trade Agreement with China: Opportunities, Challenges and Building Blocks for Canada. Waterloo, ON: Centre for International Governance Innovation. https://www.cigionline.org/sites/default/files/documents/China%20Canada%20Trade.pdf
Lim, C. L., Ho, J., & Paparinskis, M. (2018). International Investment Law and Arbitration: Commentary, Awards and Other Materials. Cambridge: Cambridge University Press.
Mann, H. (2013). The Canada-China Investment Treaty Sleight of Hand. Embassy News, 8 January. https://www.hilltimes.com/global/2013/01/08/the-canada-china-investment-treaty- sleight-of-hand/33048
McIlroy, J. (2004). Canada’s New Foreign Investment Protection and Promotion Agreement: Two Steps Forward, One Step Back? Journal of World Investment & Trade, 5, 621-646.
McLachlan, C., Shore, L., & Weiniger, M. (2017). International Investment Arbitration: Substantive Principles (2nd ed.). Oxford: Oxford University Press.
Newcombe, A. (2004). Canada’s New Model Foreign Investment Protection Agreement. Victoria: Faculty of Law, University of Victoria. https://www.italaw.com/documents/CanadianFIPA.pdf
Newcombe, A. (2017). Canadian Investment Treaty Policy: Stay the Course on Progressive Developments. In S. Tapp, A. Van Assche, & R. Wolfe (Eds.), Redesigning Canadian Trade Policies for New Global Realities (pp. 411-444). Montreal: Institute for Research on Public Policy. http://irpp.org/research-studies/canadian-investment-treaty-policy
Newcombe, A., & Paradell, L. (2009). Law and Practice of Investment Treaties: Standards of Treatment. Alphen aan den Rijn: Kluwer Law International.
Nicolas, F. (2012). Chine et investissements internationaux: Vers une normalisation. In M. Arès, & E. Boulanger (Eds.), L’investissement et la nouvelle économie mondiale: Trajectoires nationales, réseaux mondiaux et normes internationales (pp. 411-434). Brussels: Bruylant.
Nikièma, S. H. (2017). The Most-Favoured-Nation Clause in Investment Treaties. International Institute for Sustainable Development Best Practices Series. https://www.iisd.org/sites/default/files/publications/mfn-most-favoured-nation-clause- best-practices-en.pdf
Organization for Economic Cooperation and Development (OECD) (2018). FDI in Figures. http://www.oecd.org/investment/investment-policy/FDI-in-Figures-April-2018.pdf
Pérez-Aznar, F. (2017). The Use of Most-Favoured-Nation Clauses to Import Substantive Treaty Provisions in International Investment Agreements. Journal of International Economic Law, 20, 777-805. https://doi.org/10.1093/jiel/jgx034
Peterson, L. E. (2006). Evaluating Canada’s 2004 Model Foreign Investment Protection Agreement in Light of Civil Society Concerns. Canadian Council for International Co-Operation. http://archive.ccic.ca/_files/en/what_we_do/trade_2006-06_foreign_investment_memo_e.pdf
Salacuse, J. W. (2015). The Law of Investment Treaties (2nd ed.). Oxford: Oxford University Press.
Schill, S. W. (2017). MFN Clauses as Bilateral Commitments to Multilateralism: A Reply to Simon Batifort and J. Benton Heath. American Journal of International Law, 111, 914-935. https://doi.org/10.1017/ajil.2017.94
Schill, S. W., Tams, C. J., & Hofmann, R. (2018). International Investment Law and History. Cheltenham & Northampton: Edward Elgar. https://doi.org/10.4337/9781786439963
Sornarajah, M. (2017). The International Law on Foreign Investment (4th ed.). Cambridge: Cambridge University Press. https://doi.org/10.1017/9781316459959
Stephens, H. (2018). Canada’s Progressive Trade Agenda and a Free Trade Agreement with China: Are They Incompatible? SPP Policy Brief 11:27, Calgary: School of Public Policy, University of Calgary. https://d3n8a8pro7vhmx.cloudfront.net/cdfai/pages/4057/attachments/original/1539106260/ Canadas_Progressive_Trade_Agenda_and_a_Free_Trade_Agreement_with_China_Are_They_ Incompatible.pdf?1539106260
Tiagi, R., & Zhou, L. (2009). Canada’s Economic Relations with China. Vancouver: Fraser Institute.
Titi, C. (2013). The Evolving BIT: A Commentary on Canada’s Model Agreement. Investment Treaty News, International Institute for Sustainable Development. https://www.iisd.org/itn/2013/06/26/the-evolving-bit-a-commentary-on-canadas-model-agreement
United Nations Conference on Trade and Development (UNCTAD) (a). Investment Policy Hub, IIAs by Economy, China. https://investmentpolicyhub.unctad.org/IIA/CountryOtherIias/42#iiaInnerMenu
United Nations Conference on Trade and Development (UNCTAD) (2010). Most-Favoured-Nation Treatment. UNCTAD Series on Issues in International Investment Agreements II. New York & Geneva: United Nations. https://unctad.org/en/Docs/diaeia20101_en.pdf
United Nations Conference on Trade and Development (UNCTAD) (2018). World Investment Report 2018: Investment and New Industrial Policies. New York & Geneva: United Nations. https://unctad.org/en/PublicationsLibrary/wir2018_en.pdf
Van Harten, G. (2014a). Canada’s Non-Reciprocal BIT with China: Would the US or Europe Do the Same? Columbia FDI Perspectives No. 136, 8 December. http://ccsi.columbia.edu/files/2013/10/No-136-Van-Harten-FINAL.pdf
Van Harten, G. (2014b). The Canada-China FIPPA: Its Uniqueness and Non-Reciprocity. Canadian Yearbook of International Law, 51, 3-55.
Waibel, M., Kaushal, A., Chung, L., & Balchin, C. (2010). The Backlash against Investment Arbitration: Perceptions and Reality. Alphen aan den Rijn: Kluwer Law International.
Walsh, C., & Woods, M. G. (2012). The Canada-China Foreign Investment Protection and Promotion Agreement: A Comparative Analysis to Canada’s Model FIPA. HeenanBlaikie LLP. http://www.mondaq.com/canada/x/213340/international+trade+investment/The+ CanadaChina+Foreign+Investment+Protection+And+Promotion+Agreement+A+Comparative+ Analysis+To+Canadas+Model+FIPA
Walsh, C., & Woods, M. G. (2014). The Canada-China Foreign Investment Protection and Promotion Agreement. Part II: Investor-State Dispute Settlement Provisions. Woods Lafortune LLP. http://www.wl-tradelaw.com/the-canada-china-foreign-investment-promotion-and-protection-agreement-part-ii-investor-state-dispute-settlement-provisions
Wang, Y. (2017). China’s BIT Progress and Implications for China-Canada FTA Talks. Policy Brief No. 104, Waterloo, ON: Centre for International Governance Innovation. https://www.cigionline.org/sites/default/files/documents/PB%20no.104web.pdf
World Trade Organization (WTO). Agreement on Trade-Related Investment Measures (TRIMs). Signed 15 April 1994, Effective 1 January 1995. https://www.wto.org/english/docs_e/legal_e/18-trims_e.htm