Mr. Rupert Schlegelmilch:

I thank the Chairman. There is no problem with the name. My Gaeilge is non-existent so I think I would have similar issues.

I thank the committee for this opportunity to be here to discuss CETA. CETA is the result of many years of engagement between the European Union and Canada. I was part of the negotiating team for some years. It is a testimony to how close we are and the vigour of our bilateral trade relations. The project benefited from strong backing from the beginning. The Commission negotiated CETA on the basis of a mandate given unanimously by EU member states. Member states unanimously voted in favour of the agreement in the Council in 2018. It had strong support in the European Parliament. In the seven years of negotiations, the intense engagement between the Commission, member states, national parliaments and the European Parliament brought the agreement to life.

From day one, since the entry into force of the provisional application of CETA almost four years ago, its benefits have proven certain. Before I get into the subject matter of CETA, I will say a word on the context of this discussion. The current pandemic is one of the most significant crises facing our generation and it will have far-reaching impacts on public health, employment and the economy. The EU trade policy is an important part of the economic recovery. Like in 2009, after the financial crisis, trade usually comes back quickly and is part of the locomotive to take us out of the crisis.

The crisis has shown how pressing it is to create a stable, legal multilateral and bilateral environment based on bilateral free trade agreements and the updated World Trade Organization, WTO, rule book as an important condition for sustainable growth. The Minister, Deputy Varadkar, was here on 26 May and made a compelling case about how good Ireland is at using the rule book and exploiting the open markets for a small economy which is successful internationally. In this endeavour to leave the crisis and make the rule book work for us, Canada is one of our staunchest allies. Canada was the first country to join the EU to protect an independent two-step system to settle trade disputes through a specific rule when the WTO could not do it any longer. We also have the Ottawa Group where, together with Canada, we are trying to reform the World Trade Organization, which is the backbone of those international rules. We also work with Canada on cutting edge issues such as global trade and health initiatives. We share many values. We are both democracies based on the rule of law with a society that is inclusive and tolerant and a system of governance that protects and serves its citizens, offering public services and public safeguards from healthcare to consumer protection.

CETA has become the central pillar of our political and economic partnership with Canada. It is only four years old but the economics speak for themselves. EU-Canada trade continues to grow steadily. Before the crisis struck, our bilateral trade was 25% higher than before we concluded CETA. Trade in goods was worth almost €70 billion. Even last year, when we had a dent in the numbers worldwide, we were still 15% higher than before CETA. We can see a positive trend in trade between Canada and Ireland. In 2020, the total trade flow of goods between Ireland and Canada was €2.1 billion, which was 50% more compared with before CETA entered into force. Ireland's goods exports to Canada were worth about €1.7 billion in 2020, which means Ireland had a positive trade balance. I spoke about how good Ireland is at exploiting these opportunities. Last year, for example, Ireland exported beef worth €11 million and spirits worth €72 million to Canada.

Trade policy is not just about opening markets. Trade also enables other policies to be implemented. CETA is a progressive agreement that has provided a framework to help the green transition, to work on gender equality, and to improve the participation of small businesses in globalisation. In the framework of CETA, we are about to conclude the first ever mutual recognition agreement on professional qualifications of architects that will enable Irish architects to have their qualifications recognised to practise in Canada. These small examples can be quite important for small enterprises and independent professionals. It is worth mentioning that it is not only about tariffs.

I know the bone of contention in debates here has often been the investment court system. I know the concerns expressed have been debated here before. I would like to provide information and clarifications that might inform the debate and, it is hoped,address some concerns. The investor-state dispute settlement system is not something we invented. CETA is not the first agreement which has these mechanisms. EU member states have approximately 1,300 such agreements and there are 3,000 internationally recognised agreements. These agreements have frequently been criticised. The Commission recognises the validity of some of the criticism and so have others. That is why, under the previous trade Commissioner Malmström, we reformed the system with the support of member states. We made sure the reform served our interests and took away some of the things which were not clear. Our first partners in this were the Canadians in CETA. They are helping us to push multilateral reform of these issues, which is vital.

A perception we often hear is that that CETA's clauses on services and investment protection could put at risk the key role of public authorities to regulate in the public interest. CETA fully protects the right of state and local authorities to regulate. This applies to all fields where public policy objectives are at stake, including health, the environment and consumer protection. No other EU free trade agreement has undergone the extent of public and legal scrutiny, particularly regarding the question of the right to regulate. The committee might be aware that the Belgian Government had the same concerns about the right to regulate and asked the European Court of Justice in Luxembourg to look into the matter. The court confirmed there was no such risk in its opinion delivered in April 2019. National and local legislators can have confidence that CETA does not affect their ability to regulate in the public interest. At the EU level, with ambitious agendas such as with the green deal, in Brussels, nobody wants to take any risks that we may not have regulatory autonomy when we implement these policies. CETA does not require privatisation of water, public housing, healthcare or other public services. Nothing in it prevents governments from designing their policies, such as their energy policies, providing public services or bringing these services back to the public domain provided that no discrimination is involved. That is without question.

Investment protection standards that we talk about have been carefully defined in the agreement and establish clear and strict conditions for investors to bring a successful case. While establishing a certain level of investment protection, CETA confirms that the mere fact we regulate, including in a manner that reduces investors’ expectations and profits, does not in itself create a breach under CETA.

I will address the dispute settlement system that we established, which is different from what has often been criticised as private justice or an ad hocsystem of private arbitration. The new system makes the procedures to resolve investment disputes fairer, more transparent, independent and impartial. We have introduced multiple procedural guarantees to guarantee the impartiality of the system and the highest quality of adjudicators. As mentioned earlier, in the court's opinion of April 2019, it confirmed that the investment court system does not undermine democracy or the right to regulate and that it is fully compatible with the principles of judicial independence and impartiality under the European Charter of Fundamental Rights. Further, CETA is an important stepping stone to a multilateral investment court, which colleagues are working on, which will replace the old investment agreements' investor-state dispute settlement arbitration model, which some of our member states still have and are keen to see reformed.

Some will ask why the agreement has been concluded with Canada. It is a question that has been asked. Both Ireland and Canada have well-functioning legal systems. It is not clear that the ICS will ever have to be used in their bilateral relations. I wish to stress that it functions as a safety net, in case administrative acts or regulations discriminate against foreigners. A European investor cannot directly invoke CETA before a Canadian court. There have been isolated cases, even in Canada, where provinces have discriminated against foreign companies by taking property without providing for adequate judicial redress before the Canadian courts.

In conclusion, there is a historic push to reform the system and CETA is a stepping stone on that path. If the Irish Parliament chooses to vote against CETA, we will lose that part of our agenda. That is a responsibility that the Irish Parliament bears. It is why I am putting the case to convince the members that the concerns that have been voiced can be addressed.

CETA is not only a modern and forward-looking trade agreement. It is also the cornerstone of a strong bilateral relationship between two like-minded countries. Canada is really an indispensable partner with whom the EU can seek to address jointly global challenges such as WTO reform, investment governance, climate change, ocean governance and many other challenges that we face. Finally and more importantly, as our European SMEs strive to survive after the present crisis and create opportunities and find the instruments like CETA, it will deliver growth and jobs in the EU and Canada and will be part of the efforts to reinvigorate our economies.