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Is a free trade deal with China next?

The Canwest News Service reports today that, “Canada’s trade dependence on the United States is dwindling, while China has replaced Japan as the No. 3 destination for Canadian-made goods, Statistics Canada reported Tuesday.”

“The report sheds some light on how Canadian exporters are positioning themselves, with the great strength in emerging markets like China and India, and the increasing challenge to get goods into the United States with the gridlock at border crossings.”

“Exports to China, which have been growing for the past seven years, increased 6.6% in 2009 to $11.2-billion, fuelled by strong exports of canola, iron ores and coal. For the five-year period ended Dec. 31 of last year, exports to China have climbed 54.7%.”

Prior to his December 2-6, 2009 visit to China, Prime Minister Stephen Harper Harper said, “Our two countries enjoy a growing partnership, sharing significant interests in trade and investment, the environment and regional security.”

The Globe and Mail reported at that time, “One Conservative… underlined how Canada cannot rely on the U.S. as its dominant trading partner, and had to look harder at emerging partners like China.”

In a speech on September 3, 2009 in Beijing, former prime minister Brian Mulroney said, “A Canada-China investment agreement would send an important message to business and investors that foreign investment in both directions is a vital part of developing the full potential of the relationship.”

He added, “There have been discussions about a Canada-China Investment Agreement for more than 10 years. The time has come to get it done.”

On September 1, 2009 the Globe and Mail reported that, “Calgary-based Athabasca Oil Sands Corp. (has) sold a 60-per-cent interest in two of its undeveloped projects near Fort McMurray to the international unit of PetroChina Co. Ltd. (whose parent is the state-owned China National Petroleum Corp.).”

These “undeveloped projects” contain an estimated 5 billion barrels of tar sands oil. National Post columnist Don Martin has written that tar sands exports to China, “will require Canada, whose pipelines now head only north and south, to punch a hole in the Rockies and open up a crude flow to the west coast, from where oil could head overseas.”

In May 2007, then trade minister David Emerson said that he thought a Canada-China free trade agreement could be reached in two years. While that hasn’t happened, Emerson did indicate at that time that it was a priority for the Harper government.