February 11, 2012 / 11:38 AM / in 6 years

Canada wants "mutual respect" from China on trade

<p>Canada's Prime Minister Stephen Harper waves while boarding his plane in Guangzhou February 11, 2012. REUTERS/Chris Wattie</p>

CHONGQING, China (Reuters) - Some Canadian resource firms are being treated unfairly in China and Beijing must deal with the problem if it wants a proper trading relationship with energy-rich Canada, a top official told Reuters on Saturday.

China is keen to one day import Canadian crude to help fuel its rapidly-expanding economy.

Natural Resources Minister Joe Oliver, speaking during a trade mission designed in large part to sell oil to China, said some Canadian companies were having trouble obtaining permits to develop sites.

“If we want to build a long-term strategic relationship with China, which we do, and which the Chinese have said they want to build with us, it has to be based on mutual respect, reciprocity and equality,” Oliver told Reuters in an interview.

“So we would like to see Canadian companies treated as well as Chinese companies are treated in Canada. And that’s the issue and I think it’s a serious issue ... it’s one of the issues that needs to be addressed as we move to the next step in our relationship.”

Oliver declined to identify the firms in question, although he said many were involved in mining.

China is investing heavily in the oil-rich tar sands of Alberta, home to the third largest reserve of oil in the world. In the last seven months Chinese firms have bought C$5.5 billion ($5.5 billion) worth of energy assets and look set to snap up more.

Oliver said he had raised the problem of securing permits with senior Chinese officials and the nation’s main energy firms.

“They certainly heard us. They did not say ‘we don’t see this as a problem’. They listened and we raised specific instances, specific examples ... it’s not a new subject (for Canadian officials) but it was elevated,” he said.

Oliver, citing what he described as an evolving Chinese legal system, said the permit problem was not new and said he did not think Canadian firms were being singled out.

“The people with authority have some discretion and we want to make sure it’s exercised in a business-like manner and reflects the commercial commitments (by Canadian firms),” he said.

Oliver, who noted Chinese investment in Canada was three times that of Canadian investment in China, said he would continue raising the issue with Beijing.

Canada’s Conservative government is keen to ship oil to China to diversify its exports. Canada currently exports 99 percent of its crude to the United States, where a glut of supplies means prices are discounted.

“In the last couple of days it’s been astonishing ... we’re leaving billions of dollars on the table,” said Oliver.

Canada will not be able to export oil to China until a pipeline can be built from Alberta to the Pacific Coast.

Enbridge Inc’s planned Northern Gateway pipeline would do just that, but a slow regulatory process and likely court challenges mean it is unlikely to be built within a decade.

The Conservative government complains the process to study and approve pipelines takes far too long and has promised to change it. Oliver said the Chinese were also concerned.

“It’s a serious issue for them, as it is with anyone putting billions of dollars into a project. They want to know how long it’s going to take. They’d like some predictability, certainty,” he said.

($1 = $1 Canadian)

Reporting by David Ljunggren; Editing by Jacqueline Wong

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