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Here's the Globe and Mail article-Enjoy

[Harvard99]

Canada-China energy deal in works By STEVEN CHASE UPDATED AT 8:10 AM EST Saturday, Jan 15, 2005 OTTAWA -- Canada and China are negotiating a broad agreement on energy co-operation in oil, gas and nuclear power that could be signed as early as next week when Prime Minister Paul Martin tours the Asian economic superpower. Among other things, the deal seeks to encourage "mutually beneficial commercial partnerships" in sectors such as the oil sands, sources say. The Canada-China Framework on Energy Co-operation would forge closer ties between Ottawa and Beijing on natural resources at a time when both countries are eager for something the other has to offer. "It's on the table for signature," a senior federal official said. "It's an attempt to build better relations . . . and promote investment both ways." China is growing rapidly and is on the hunt for new natural resources, while Canada, eager to stem a long-term decline in its share of global direct investment, is anxious to attract foreign cash to develop its petroleum and mineral assets. (Ottawa also wants to sell nuclear reactors to electricity-hungry China.) Officials cautioned the energy co-operation deal is not yet finalized and could be delayed beyond Mr. Martin's China visit, which takes place Jan. 20 to 23. Sources say the deal could also encourage collaboration on uranium, which Canada sells and China needs to power its growing number of nuclear reactors. It may also cover research on oil sands technology, which Canadian firms use to extract petroleum from tarry deposits in northern Alberta. The agreement would not be legally binding but would serve as a concrete expression of the kind of closer ties Ottawa and Beijing have been seeking for the past year. Following a December, 2003, visit to Ottawa by Chinese premier Wen Jiabao, the Canadian government set up a strategic working group to look at ways of deepening and broadening ties with China. China-watchers warn however that Beijing is hesitant to approve major investment in Canadian energy assets because of Canada's preferential trade relationship with the United States. Observers say Beijing fears that potential petroleum investments in Canada could be harmed or forced to take a back seat to U.S. interests in the event of a supply shortage or serious conflict with Washington. The North American free-trade agreement gives the United States special access to the Canadian energy sector because the deal makes it difficult for Ottawa to curtail energy exports to the United States. The Martin government's focus on China is part of its campaign to expand trade beyond the United States amid concerns that a string of recent free-trade deals signed by Washington is diluting Canada's special access to the U.S. market. China is Canada's second-largest trading partner with two-way merchandise trade of $23.3-billion in 2003, up 16 per cent from 2002. Mr. Martin left for Asia early this morning on a marathon trade mission to China, Japan and India. He departed earlier than originally scheduled in order to visit tsunami-ravaged parts of Asia beforehand. Separately, Canada and China are negotiating a foreign investor promotion and protection agreement, a deal that would take trade relations to a new level because it would safeguard the rights of investors in each of the countries, giving them the same legal standing as domestic businesses.