US china flag

Canada and China are stepping up talks to begin a new free trade relationship between the two countries.  The two countries are currently undergoing a joint economic study that will be concluded in May.  After that point, the two countries will reconvene to discuss further the possibility of a strong economic relationship.  Canadian Prime Minister, Stephen Harper highlighted twenty three commercial agreements that are “worth $3 billion”.  Aside from economics, both countries’ governments talked about seventeen different government-to-government issues such as energy cooperation, human rights and agriculture.

“Two-way investment between Canada and China has increased by 700 per cent … in seven years,” says CBC senior correspondent Terry Milewski.  In short, the Canadians and the Chinese have been rapidly expanding their economic friendship to help create more government revenue and the ability for job creation in their countries.  Government leaders have said that their partnership has helped buoyed a recessionary environment.

It should be noted that despite the rapid trade growth between Canada and China, the US is still overwhelmingly the top trader with Canada.  However, analysts are noticing that the recession in the US has cut trading with Canada, while China has been ramping up its trading with China.  Analysts go on to say that China could take over the top spot within the next few years if the US doesn’t reestablish a stronger trade pact.

The two countries have signaled that they will move forward with a contract to have Canadians export their uranium to China.  Both sides have signaled that they will move forward with talks on human rights and education to expand their diplomatic relationship as well.   The talks have not all been about government issues, China announced that they will let Canada borrow a pair of pandas to be on exhibit in the Toronto Zoo for research and conservation.

These talks and deals between China and Canada will no doubt bring a closer friendship and prosperity for the two countries.  However, one must ask, what will the United States do in reaction?  Chinese-US relations have soured over the past year and now Canada will be exporting oil via Keystone oil pipeline after Obama and Democrats dismissed the idea of importing oil from the Canadians due to the environmental impact.  However, Republicans are in full support of the Keystone pipeline saying that they would rather buy their oil from a source closer to home, rather than importing oil from the Middle East.  Republicans also say that the Keystone pipeline is the first step to achieving oil independence.  However, at the moment it looks like the oil will not be going to the United States but rather to China.