Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I thank the Deputy. People are capable of understanding the issues, but, unfortunately, sometimes they are misled. Some people genuinely believe that ratifying CETA will mean that for the first time it will be possible for Canadian companies to sue the State. That is not true. Many things have been put out there that are not true. People are being told that it will be possible to sue for loss of profits. Again, that is not true. Unfortunately, therefore, some people at least are being misled regarding what CETA is all about. Frankly, that is wrong and shame on those who would engage in misleading the public in any form. This is an additional system, as the Deputy described it. I agree with that description of it as an additional system. However, it is not new or unprecedented to have international panels and transnational courts. The ICS will only look at the terms of CETA and it cannot challenge domestic law, which must be taken by the ICS tribunal as a fact. Perhaps that answers the question previously asked by Deputy Murphy. The ICS is only there to adjudicate on CETA and the system cannot be used to challenge a domestic law. That must be accepted by the ICS tribunal as a fact and it can only look at whether the terms of CETA have been breached.

Turning to the broader issue, international trade agreements are not part of domestic law and that is why separate adjudication arrangements are required where disputes may arise in such contexts. All international trade agreements have dispute resolution arrangements. Moreover, where such agreements cover investment rules and protections, there must be a dispute resolution mechanism to cover investments. An example would be an ISDS mechanism, which was the original plan under CETA. Irish companies investing in Canada have only one legal system and one constitutional framework to navigate should they believe that they have been discriminated against. In contrast, Canadian companies investing in Europe are faced with 27 legal systems and constitutions to navigate. ISDS systems have existed since the 1950s and they enable overseas investors to resolve disputes with the government of the country where the investment is made through binding international arbitration. ISDS mechanisms have been included in more than 2,000 investment treaties to date. The mechanism proved controversial in recent times, and it is now regarded as outdated by the European Commission.

The Government considered the fact that the European Commission was to seek to address the concerns raised by NGOs and others regarding the ISDS system in the context of the Commission trying to develop a new replacement mechanism - the ICS - to address concerns regarding transparency and the legitimacy of the public interest. Therefore, what is worth pointing out here is that the original mechanism proposed was an ISDS system. We have loads of those already. The concept is part of 2,000 investment treaties. We are not party to all of them, but we are party to some of them. The investment court system is designed to be an improvement on the ISDS system and to be more transparent, more legitimate and more in the public interest. Other people, who objected to CETA earlier, did not like the ISDS system. We have tried to respond to those concerns by coming up with a better system.