Canada applies to join China-backed AIIB, latest U.S. ally to apply

BEIJING, Aug 31?- Canada will apply to join the China-backed Asian Infrastructure Investment Bank, or AIIB, Canadian and bank officials said on Wednesday, making it the latest ally of the United States to join the new international development bank.

The multilateral institution, seen as a rival to the Western-dominated World Bank and Asian Development Bank, was initially opposed by the United States but attracted many U.S. allies including Britain, Germany, Australia and South Korea as founding members.

Japan and the United States are the most prominent countries not represented in the bank.

"This is really for us, as a new government, the earliest possibility at which we could indicate our interest," Canadian Finance Minister Bill Morneau said in response to a question why Canada was only applying to join the bank now.

"We believe the bank is clearly showing that it's going to be a highly effective multilateral institution," he added.

Morneau is on a trip to China with Canadian Prime Minister Justin Trudeau seeking to deepen ties with the world's second-largest economy, a distinct change from former Prime Minister Stephen Harper's more cautious approach to China.

"The Canadians' decision to join this bank will greatly strengthen the management of this institution," AIIB President Jin Liqun told reporters.

"We can see that the U.S.'s attitude towards AIIB is showing signs of changing, as it's encouraging the World Bank to cooperate more with the AIIB," Jin added.

White House spokesman Josh Earnest told reporters on Air Force One on Wednesday that U.S. and Canadian officials had been in touch on the issue. "We know that Canada shares our views about the importance of transparency and good governance when it comes to these kinds of international institutions," Earnest said.

Ultimately it will be a "good thing" if Canada joins the AIIB, as it advocates for such governance, he added. Earnest said he was not aware of any U.S. plans to join the organization.

Canada will submit its application to join the AIIB by the end of 2016, said David Lauzon, a Canadian Finance Ministry official.