Mr. Philip Kelly:

I thank the joint committee for the invitation to attend to discuss the EU-Canada comprehensive and economic trade agreement, CETA. As members will be aware, at the 16th EU-Canada summit in Brussels, on 30 October 2016, EU leaders and the Canadian Prime Minister signed the comprehensive economic and trade agreement. The landmark deal which runs to some 2,500 pages represents a comprehensive transatlantic trade agreement which seeks to eliminate or reduce trade barriers in virtually all sectors of EU-Canada trade. Our most recent experience of applying a comprehensive trade agreement with one of the third countries, South Korea, has seen a 25% increase in trade. If this trade intensification were to be replicated in the case of Canada on foot of full application of the CETA, Ireland could expect exports to rise by €500 million per annum. The total value of Irish exports to Canada is €2.3 billion per year, with the total value of imports being €729 million. We expect these levels to increase as the CETA covers not only the traditional tariffs and quotas which apply to goods but will also free up trade in services.

Ireland is the fourth largest recipient of Canadian foreign direct investment. The stock of Canadian direct investment in Ireland amounted to approximately €11 billion at the end of 2015. With Canadian companies already investing actively in Ireland and employing some 2,800 people, an increased focus on bilateral trade and targeting inward investment from Canada can lead only to further growth.

Almost half of the benefits anticipated under the CETA are expected to be in the services sector. There is a significant opportunity for Ireland, given its strengths in services. It has been particularly successful in expanding its share of the world’s services market in recent years; in fact, our share has tripled in the past 15 years. Services exports account for more than half of all Irish exports. In the case of goods exports, the CETA will save on duty costs, as 99.6% of all industrial tariffs will be eliminated on entry into force of the agreement. Firms exporting from Ireland will also benefit from the recognition of product standards and certification, saving on "double testing" on both sides of the Atlantic. This is of particular benefit to smaller firms which can ill afford to pay twice for the same certification test.

The CETA provides for a significant opening up of agrifood trade. Ireland successfully campaigned for a low beef import quota from Canada to the European Union, thereby safeguarding our important EU market in this area. We were also successful in securing the multi-annual phasing in of the additional quota granted. On the other hand, in terms of our offensive interests, we have secured full unrestricted access for Irish beef and other meat products to the Canadian market.

In recent years Ireland has developed an important pigmeat export trade to Canada and there is now potential to develop the export business for Irish beef and lamb products also. The removal of the Canadian import tariff of 26.5% will benefit Irish meat exporters. The CETA also provides significant new opportunities for the Irish dairy sector. In addition, there are a range of sectoral opportunities for Irish companies arising from greater access to the Canadian market, including in financial software, telecoms, digital media, agricultural machinery, the life sciences and medical devices.

On public procurement, for the first time, Canadian provinces, territories and municipalities will open their procurement markets to third countries. Canada will also create a single electronic procurement website that will combine information on all tenders which will correspond to existing intra-EU arrangements. This will greatly facilitate the effective access of firms to procurement opportunities in Canada. Making the trading landscape easier is particularly important for SMEs enabling them to internationalise and grow exports. Trade barriers tend to disproportionately burden smaller firms which have fewer resources relative to larger firms to overcome them.

As well as providing new market opportunities for Irish firms, the CETA has the potential to provide consumers, businesses and individuals with a greater choice of quality products at lower prices.

As Members will be aware, the Council's decision of October 2016 provides for the provisional application of the CETA, such application being a standard approach in trade agreements. Procedurally at this point, provisional application requires a favourable vote in the European Parliament plenary session in February - this is likely to occur on 17 February - following a recommendation from the International Trade Committee of the Parliament, INTA, on 24 January. However, members may be aware that certain provisions of the CETA will not be applied provisionally. Most noteworthy among them are those relating to investment protection and investment dispute settlement. The European Union and Canada have also agreed a legally binding joint interpretative instrument that was added to tje CETA to provide further assurances on public services, labour rights, water services, sustainable development, environmental protection and investment.

Members of the committee will also be aware that the opinion of the European Court of Justice has already been sought on the EU-Singapore free trade agreement to determine the limits of the European Union’s competence in the matter of trade and foreign direct investment. The opinion of the Advocate General was published on 21 December 2016. It indicated that the EU-Singapore free trade agreement could only be concluded by the European Union and the member states acting jointly, in other words, it was a mixed agreement. The opinion contains the Advocate General's view of the law and recommends to the court how it should decide the case. The court has yet to make a decision, but it is due to do so in early 2017. Ireland argued at the court that the Singapore agreement was mixed. That has also been our position on the CETA. Accordingly, in order for the CETA to be fully ratified by the European Union, it will have to be approved by all 28 member states in line with their national legal procedures. In Ireland’s case, the agreement will be brought before the Dáil for ratification in due course.

Enterprise Ireland is consistently working with client companies in focusing on enhancing their competitiveness, capability and levels of innovation to assist them to diversify into new markets. Enterprise Ireland stands ready to support Irish companies in seeking to take early advantage of the opportunities presented by the CETA and will be supporting additional trade events in Canada in the coming year to help Irish businesses to enter the market or expand their presence, including in particular, through a trade mission later this year to be led by the Minister for Jobs, Enterprise and Innovation, Deputy Mary Mitchell O’Connor.

The agreement is very important to Ireland. The CETA and the European Union’s other trade agreements will help to open new markets, break down barriers and provide opportunities for Irish firms. The importance of applying and exploiting existing agreements and accelerating negotiations on new trade deals at EU level and in the WTO is underscored by Brexit. Trade diversification has been a consistent national policy objective. While progress has undoubtedly been made, the need to further reduce our dependence on a limited number of markets and, in particular, the United Kingdom, will be a key element in mitigating the negative impacts of Brexit. Continued access to the European Union’s network of trade agreements is just as important and a significant competitive advantage for Irish exporters and iinvestors seeking to establish in Europe. From experience, we know that an open global trading environment works for Ireland. The combination of export-led growth and foreign direct investment has transformed Ireland’s economy in the longer term and more recently played a key role in national economic recovery. With a small domestic market, further expansion in other markets is essential to our continued economic growth.

That concludes my opening statement. Together with my colleagues, I will happy to answer questions members may have.