Mr. David O'Sullivan:

I thank the Deputy. I will take the three questions in order. Why did we move to a broader, more comprehensive approach on trade agreements? There were three main reasons. First, tariffs were important to reduce and, if possible, eliminate. CETA does more or less eliminate tariffs between us on, I think, 98% of goods. Second, there was a recognition that non-tariff barriers of various kinds were becoming the real issue and some degree of regulatory convergence and addressing of that issue in trade deals was important. This was a general trend pursued by Canada and other partners in trade deals in the last decade or so.

The third reason relates to sustainable development, environmental and labour standard issues. Increasingly, there was criticism saying trade deals did not take sufficient account of these issues so it was important to put these chapters into this generation of trade deals. That is why we have more comprehensive deals. The South Korea agreement of 2010 was a good example. Recently we have seen that the European Union has criticised South Korea for its failure to ratify international labour organisation conventions, has initiated the dispute settlement in the agreement to try to change that situation and has made some progress. This was also a response to wider societal and political concerns that trade deals needed to take into account these broader dimensions. That is why we have these more comprehensive agreements which reflect both new economic realities and new political realities.

On the court judgment, I do not think it has changed the content of future deals. The previous principle was known as the Pastis principle, an allusion to the French alcohol of which even a little drop put into a glass of water turns the water yellow. The idea was that even if there was a very small bit of national or mixed competence in an agreement, that meant the whole agreement became mixed and needed the full complicated system of ratification. The court basically said "No" and that as long as it is essentially about trade it can be considered a trade agreement, even if it touches on some other issues. To link this to the Deputy's third question, it identified two areas in particular. They were portfolio investment - or non-direct investment - and the investor court system or investor state provisions which it said would require full national ratification. The issue is now how to package the results of the negotiation in such a way as to have the trade-focused part being subject to the slightly less complicated route of ratification at the level of the EU, requiring a decision of the Council of Ministers and of the European Parliament but not ratification at national level, and those elements, in particular relating to investment, which would still require full national ratification.

To the third question on the investor court system and whether it can be disconnected, I hinted that if we were today starting from scratch with a blank sheet of paper or had just the raw material of the Canada agreement and the Commission was deciding how to present it, that is probably what it would do. I cannot speak for the Commission but the logic of what the court said would lead one in that direction. However, we are not in that position in relation to Canada and we need to be clear about this. The package of CETA, including the investment court system, has been ratified and is concluded. Trying to disconnect it would require a renegotiation and one cannot just renegotiate one thing. It does not work that way. Once one opens the Pandora's box by saying one would like to revisit this text, Canada might be well disposed but would be under pressure to open other things. The trade thing has not worked quite as well for them as it has for us, so they might look to reopen that. In relation to this deal and the package on the table, it is a take-it-or-leave-it option for the package as we find it.