While the world has been consumed watching the geo-political events unfolding in Europe and the Middle East, I think one of the most interesting events of the year quietly occurred this month between China and Canada.

You see, about two weeks ago officials from Canada travelled to China and held the largest trade meeting between the two countries in decades. The net result of those talks, the most material and fruitful in years: The signing of a declaration of intent to agree to a Foreign Investment Promotion and Protection Agreement (FIPA).

The lengthy name aside, it's an important step in further Canadian/Chinese trade, as it sets a broad framework for ensuring equitable treatment for foreign investors in both countries. Basically, it removes a large degree of risk for Chinese and Canadian firms investing with the other country by providing a legal framework and set of laws that protect foreign investors.

Now to be fair, there is tremendous legal review that has to occur before this becomes ratified between the two countries, so it's not like things are going to change tomorrow ...

But the trend of Canadian/Chinese trade is clearly improving (for context, they have been trying to get this FIPA done since 1994). While better Chinese/Canadian trade relations is a bad thing for us here in the U.S., it's a good thing for Canadian natural resource companies and transportation companies.

Specifically, this should be long-term bullish for Canadian mining and energy companies, as there will be increased demand for their exports from China's growing economy. Additionally, it is bullish for Canadian rails and shipping companies, as they will have to transport these natural materials that will be exported to China.

Uranium Companies Get Access to China

While trade between Canada and China will increase over a series of years, one concrete and much more near-term agreement came out of the meetings ...

And that was the amending of a 1994 nuclear agreement that will now allow Canadian uranium companies to export to China — a country where uranium demand is set to surge according to the World Nuclear Association. The group also estimates that Chinese uranium demand will quadruple by 2020 as more power plants come online.

Federal safety officials recently gave the okay for the country's first new nuclear reactors in more than 30 years.

Indeed, good news for uranium producers. What's more, we also just learned that federal officials approved the first new nuclear power plant in the United States since 1979. The Nuclear Regulatory Commission approved Southern Company's request to build two new nuclear reactors at a current nuclear Vogtle power plant in Georgia.

One way to play this potential growth in nuclear power demand is through uranium miners, which have severely underperformed since the Japanese Fukushima disaster almost a year ago.

While the coast isn't totally clear for nuclear power or uranium miners, shares like Cameco (CCJ) could be a great contrarian investment that should profit from increased nuclear power here in the U.S., and from increased uranium exports from Canada.

Source: moneyandmarkets.com

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