Mr. Philip Kelly:

Absolutely, and I am going to address that now.

I use a whole load of different models to analyse the potential benefits of trade agreements. I am not familiar with the economic modelling used by the employment committee of the European Parliament. I am familiar with the economic modelling that the European Commission uses. It is the same modelling that we rely on domestically here - the computable general equilibrium model. It considers trade and the composition of trade between all member states. It applies changed scenarios and tariffs, changes to technical barriers to trade to existing trading relationships and tries to model what would happen. Under that sort of modelling our anticipation is that CETA would support additional job creation and higher value-added or higher-paid jobs in the economy.

We are the subject of constant churn between agriculture, manufacturing and new areas of the services economy. That transfer of employment between sectors is well established. We know that trade agreements only generally provide a small increment to that transfer. We expect that a new trade deal would see certain sectors of the economy attract more capital, be more profitable and create more jobs. If we had a closed labour market, one might see employment fall in other areas of the economy as employment was created in higher value-added sectors of the economy. We do not have a closed economy in the European Union and therefore, we anticipate that we will see increased job creation in higher value and more sustainable jobs in the economy in the long-term. That is our national estimation of what CETA would do for us. It would create more sustainable jobs in exporting firms in the economy. We know that exporting firms ride out recessions better and avail of product and service innovation better and that on average, firms pay better in the exporting part of the economy. We just have to differ in terms of the views of the employment committee of the European Parliament and rely on the sort of the analysis we do, and that the European Commission has done and which, in the case of the European Commission, is in the public domain.

The Deputy asked me questions on expectations of profits. To clarify, the reason that companies or somebody would feel hurt is established under CETA's terms. It states that one has to be discriminated against or to have been the object of unfair inequitable treatment. CETA defines all of that in terms of denial of justice in criminal, civil or administrative proceedings, as well as a fundamental breach of due process in judicial proceedings or a lack of transparency. Other grounds are if the treatment one has received has been manifestly arbitrary, if one has been the object of targeted discrimination on manifestly wrongful grounds such as gender, race or religious belief or if, as an investor, one has been the object of abusive treatment, duress or harassment. These are the grounds and that is the sort of negativity whereby somebody might complain that their intellectual property rights or other rights have been infringed or expropriated by a state.

On the issue of profit expectation, the agreement explicitly states that a reduction of somebody's expectation of profits is not a breach of the investment protections of the agreement. If, however, one were the subject of a harmful act by a government, how would we value one's business or investment? There are standard accounting treatments by which businesses are valued in terms of their assets. One can value their property, vans or machinery or one might value their contracts or distribution channels. Anybody valuing a business does so on the basis of it being a going concern as otherwise, one is just buying a set of assets. Under any accounting treatment when one values a business or a business that has been damaged, it is considered to be a going concern. As part of that one considers the return on the capital employed. One would consider future profits and whether its income stream had been damaged by the harm complained about. There is nothing exceptional about looking at an investment whether it is a stock on a stock market or buying a business. One values the business based on its income stream. The expectation is not of somebody who might invest in Ireland and the profits he or she might have made but of somebody who has an investment, can prove he or she was discriminated against and damaged and who can point to a reduction in the value of his or her investment or business using a standard accounting technique that would value a business as a going concern.