Source: AFP, The Globe and Mail                   Date: 01 October, 2010

Canada's Prime Minister Stephen Harper and his visiting Mongolian counterpart, S. Batbold on Tuesday agreed to deepen their nations' economic ties, eventually opening free trade talks. "Our countries are committed to developing our relationship," Harper said in a statement. "We look forward to further strengthening our ties, including cooperating on institutional reform and peace and security."

The two leaders signed memorandums of understanding to improve trade and market access, as well as to share expertise on agriculture technology, standardization and running a non-partisan public service. Mongolia’s public service would likely seek Canada’s Public Service Commission’s advice on avoiding corruption, recruiting and training, and government regulation of industry.

As well, they agreed to fast-track negotiations on a deal to protect and promote foreign investment, holding a next round of talks by year end. Ratification of the Foreign Investment Promotion and Protection Agreement "would be followed by bilateral exploratory discussions regarding a possible agreement on free trade," Harper's office said.

Canada is the second-largest overall foreign investor in Mongolia after China, with more than CAD600 million invested in the country. In 2009, two-way merchandise trade was valued at CAD164 million. China, Russia and India all have interests in the uranium being mined in Mongolia – sometimes leaving Canadian mining firms caught in the middle. Earlier this year, Canadian-owned Khan Resources took legal action against the government after a mining license was revoked.