Canada has Foreign Investment Promotion and Protection Agreements (FIPAs) with six of the new European Union (EU) Member States (the Czech Republic, Hungary, Latvia, Poland, Romania and Slovakia). In 2003, the European Commission requested that acceding member states bring their FIPAs with Canada into conformity with EU law. The Czech Republic, Hungary, Latvia, Poland and Slovakia became EU members in 2004, while Romania joined in 2007.
Since March 2004, Canada, the European Commission and the relevant Member States have engaged in talks on the matter.
The six EU FIPAs are relatively dated (the Czech Republic, Hungary, Poland and Slovakia predate the NAFTA). Given the need to bring the treaties in line with EU law, and Canada’s interest in working to update certain aspects of the treaties, we have taken a pragmatic approach to amending the EU FIPAs.
Canada has signed amended treaties with Latvia (on 5 May 2009), the Czech Republic (on 6 May 2009), Romania (on 8 May 2009), and the Slovak Republic (on 20 July 2010). These treaties have now been ratified and are entering into force – Latvia (November 2011), the Czech Republic (January 2012), Romania (November 2011) and the Slovak Republic (March 2012). Although negotiations with Hungary have successfully concluded, Hungary has indicated to Canada it will delay the decision of whether or not to sign the FIPA until the forthcoming EU Regulation on the external investment protection agreements of its Member States is in force and the negotiations for a Comprehensive Economic and Trade Agreement between Canada and the EU are concluded. The talks with Poland are ongoing.
While the revised treaties do not incorporate all aspects of Canada’s current FIPA model, they include a number of the important changes that have been made in recent years. These include: a clarification of indirect expropriation; a clarification of the obligation to provide a minimum standard of treatment; a NAFTA-style non-derogation clause for environmental, health and other safety standards; an exception for cultural industries; and greater transparency during investor-State arbitration, such as public access to hearings and documents.
Some key sectors of interest to Canadian companies in the EU include information and communications technologies, aerospace and defence, life sciences, agriculture and agri-food, and environmental products, services, and technologies.
If you have questions or comments, please contact Foreign Affairs and International Trade Canada at:
Investment Trade Policy Division (TNI)
Foreign Affairs and International Trade Canada
Lester B. Pearson Building
125 Sussex Drive
Ottawa, Ontario K1A 0G2