Mr. David O'Sullivan:

Sorry, but I thought the Senator was suggesting that Governments might feel that there are limits to how they can they regulate because they would be running certain risks because of the ISDS mechanism. I can only say to the Senator that I have honestly never heard that from countries which are running these systems. Senator Keogan asked about examples. Many cases have been decided. Governments have won many and lost some, and companies have lost many and won some. Looking at it, the general trend is rather about equity and fair treatment and a legitimate sense that companies may have lost money unfairly. However, these are judgments which are made, and companies do not win all the time at all. It is not as if we are operating in a vacuum. We have a history of a system which is there and which we would like to change in the way we have discussed. Therefore, I personally do not see that risk.

On the Senator's statement that people are now getting rid of these things, the cases she has described are all very different. To be very frank, nobody wanted to have an investor-state dispute settlement system with China, because everyone knows that if a company dared to go against the Chinese Government in any way, it would be punitively dealt with through other means. This was not a system that people wanted to have with China. The EU-UK Trade and Co-operation Agreement is not an investment agreement; it is only a trade and co-operation agreement and there is no investment chapter. When we crafted the Korea agreement, we did not have competence for investment so there was no need to address the issue. The issue of addressing this at European level has only arisen because investment was added as a competence in the Lisbon treaty and therefore certain aspects of bilateral investment treaties had to be taken over into EU level agreements. One element in that was the investor-state dispute settlement. That is how the EU found itself getting involved in this. Beforehand, we did not need to worry about it.

In relation to the USMCA, or the agreement previously known as NAFTA, in fact, what happened, as I understand it, is that a dispute settlement system is maintained with Mexico. There is still an ISDS system with Mexico. It is true that the US and Canada omitted it from their agreement for a particular set of circumstances, which we can discuss on another occasion. Therefore, the system is maintained. It is also to be found in the comprehensive and progressive trans-Pacific partnership, of which Canada is a member. Therefore, there are certain cases where people may decide to leave these things out.

The fact is, and now I come to the renegotiation point, that this is part of the CETA package. The Senator is right that there are elements in it which are open to adjustment and refinement. I do not think they change the fundamentals but they may provide additional answers. However, the fundamental structure is built into the treaty. If a state decides to change this, it is a renegotiation. If both sides really agree that renegotiation only happens on a very limited part, perhaps that can happen. However, a state runs the risk, in any situation where it reopens a package, that all sides involved can then come to the table with additional issues. The scope for containing a new negotiation only to this area is, in my view, probably very limited.

It is clear that the investment court system in CETA is a stepping stone towards the multilateral investment court. If the multilateral investment court ever sees the light of day and is established, there will probably be an exercise of retrofitting it to agreements which did not contain reference to it.

That would be a separate exercise, which would be the result of a new legal situation created by the establishment, finally, of this multilateral investment court on which, as I understand it and I am not an expert, the EU, Canada and other like-minded countries are making quite a bit of progress in the international negotiations but they are not there yet.