Dr. Laurens Ankersmit:

The question was asked what would happen if Ireland were not to ratify CETA or an EU member state rejected it. When it comes to provisional application, CETA is being provisionally applied right now.

It can be provisionally applied indefinitely if neither party indicates to the other that it has no intention of ratifying the agreement. For instance, the United States provisionally applied the general agreement on tariffs and trade for a few decades before the WTO agreements came into force. It could be done for a very long period. As Dr. Fennelly mentioned, in these situations, the EU can be quite ingenious and smart in trying to find a solution to matters. For instance, the Mercosur agreement is supposed to be a mixed agreement and also requires ratification by member states but there is now a push to split the agreement, as was done with the Singapore agreement. There is a push to split the Mercosur agreement into a trade part and another, more political, part while the idea with the Singapore agreement is to have a split between a trade part and an investment part. Such a thing could also be done with CETA. This agreement could be applied provisionally until there is a new text to ratify at EU level only. This would sideline the member states completely because one of the two reasons their involvement in the ratification of CETA is required is that the investment court system would remove disputes from the jurisdiction of the member states, as the ECJ has said. This means that members states must be involved in the ratification process.

All kinds of creative solutions are possible but, in the meantime, this agreement could be provisionally applied indefinitely. I do not see any objection to that unless, for some reason, Canada is notified that the EU and its member states will not ratify the agreement. It is a bilaterally structured agreement, which means that the members states ratify the agreement first, followed by the EU by way of a decision of the European Council. At this point, the EU and the member states will notify Canada that they have completed the steps necessary for ratification. This can all be found in CETA itself. The final provisions outline exactly how provisional application works, how it can be ended and how the agreement is to be ratified. To make a long story short, there are plenty of solutions if a member state, possibly the Netherlands or Ireland, opposed one part of the agreement. An additional protocol could also be agreed. All kinds of solutions are possible.

I have heard a few people say that CETA is completely dead, that this will be end of it and that it is the nuclear option but I do not find that very convincing when one considers the enormous interest in the rest of the agreement, particularly from an economic perspective. I hope I have answered the question.

Deputy Howlin asked about the issue of sidestepping domestic courts. Under the ICS outlined in CETA, it is entirely possible for foreign investors to sidestep Irish courts. The foreign investor has the choice to go to the Irish courts or to the ICS. If it decides to go to the ICS, it can obtain a ruling from an ICS tribunal, which can be enforced throughout the world. In American courts, economic detective firms are sometimes hired. These know where assets are and target the particular country where they are held to obtain those assets if, for example, the Irish Government is unwilling to abide by the award issued by the ICS tribunal. It is a bit of an unlikely situation, but it could happen.

If there are significant issues with a particular ruling of an investment court system, ICS, tribunal, the Irish Government could refuse to pay and go to a court somewhere else in another member state. That is entirely possible. That happened in the Achmea judgment, where enforcement of an award was sought in a German court against the Czech Republic. There are plenty of examples. The Micula cases are also examples where American courts are involved in the enforcement of an award. It is entirely up to the investor to choose where it wants to go. If it considers the Irish courts not to be a good option, it can do so. It gives foreign investors an additional option. Investors will choose the Irish courts when it is better for them, which makes sense, but when it is not better for them, they now have an additional avenue to pursue. I always compare it with playing an away game and a home game.

For a foreign investor, this is very much a home game, while for a government, this is an away game. It depends on where these tribunals are based but if one goes to the International Centre for Settlement of Investment Disputes, ICSID, for instance, one will go to litigate in Washington, D.C. That is where the Dutch Government is heading. It is playing an away game. Normally the Dutch district court of The Hague would be responsible for claims against the Government. This is the district court that handed down the Urgenda judgment. I do not know if members have ever heard of the Urgenda judgment. It is a climate case. That court has ruled that the Dutch Government has to take more serious steps to fight climate change. Now of course, the German investor is not going to go to that district court, because the ICS is probably much more favourable to it.

That brings me to the last point, on the appointment process of these tribunal members and whether they are objective. That is a difficult thing to achieve. In most domestic systems, there is a constitutional court, which generally has all kinds of cases come before it. It is not a court that only hears one side of the argument all the time. The investment court system generally has investment law experts. In the constitution of the tribunal article, which is Article 8.27, paragraph 4, of CETA, there is a lot of nice language, that they need to be jurists of recognised competence, but it is also desirable that they have expertise in international investment law. That means that one will source these arbitrators from a particular legal community, who look at disputes in a certain way and have been trained to look at disputes in a certain way. Will that affect the impartiality of these tribunals?