Paul Murphy (Dublin South West, Socialist Party)
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3. To ask the Minister for Jobs, Enterprise and Innovation if he has received a response to the letter that he co-signed, dated 21 October 2014, to the Commissioner-designate for Trade, Cecilia Malmström, regarding the transatlantic trade and investment partnership; and if he will make a statement on the matter. [48248/14]

Paul Murphy (Dublin South West, Socialist Party)
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I wish to ask the Minister about the letter of 21 October 2014 to the trade Commissioner, which he co-signed with a number of other trade Ministers across Europe. The essence of the letter was to argue for the maintenance of the investor-state dispute settlement, ISDS, mechanism, which gives privileged access to corporations to justice against states that attempt to regulate in the EU-US free trade agreement, the so-called TTIP. Did the Government give the Minister a mandate to sign the letter? Is it the official Government position to argue for the inclusion of ISDS, and has there been a response yet from the trade Commissioner?

Richard Bruton (Dublin North Central, Fine Gael)
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The purpose of the negotiations on the transatlantic trade and investment partnership, TTIP, is to reduce barriers to trade and investment in order to generate jobs and growth. According to assessments made by the European Commission and other European bodies, a comprehensive TTIP could over time boost the EU's GDP by 0.5% per annum, resulting in 400,000 additional jobs across the EU. The gains for Ireland could be double that in proportionate terms because of the significant flows of trade between Ireland and the US.

Ireland was one of 14 EU member states that wrote to the new Commissioner for Trade, Cecilia Malmström, expressing the view that the public consultation on investor protection in TTIP held earlier this year was an important step in seeking to strike the right balance and that stakeholders’ contributions should be carefully considered before a firm decision is reached on the way forward. While no reply has issued to the letter, I am aware that the results of the consultation will be made available soon.

The aim of the investment protection chapter of the EU's free trade agreements is to provide EU investors abroad with a level of protection similar to that which would obtain within the EU.

In respect of inward investment, Ireland guarantees investors in Ireland that they will not be treated in a discriminatory manner. The protection is provided by virtue of our Constitution. However, all other EU member states have bilateral investment treaties with third countries that include investor-state dispute settlement, ISDS, arrangements. Nine member states have such treaties with the US. TTIP would replace these with a single arrangement. Ultimately, an EU mechanism would provide a uniform system of guaranteed fair and equitable treatment for investors across all EU member states.

International experience with ISDS points to a wide disparity of bilateral investment agreement provisions, and some cases taken by investors under some of these have brought criticism on the mechanism. TTIP and other agreements provide an opportunity for the EU to make improvements that address the weaknesses identified in those other cases.

The mandate for negotiation has made it clear that the objectives of any investment protection provisions would be without prejudice to the right of the EU and the member states to adopt and enforce measures necessary to pursue legitimate policy objectives, such as social, environmental or security objectives, stability of the financial system, or public health and safety, in a non-discriminatory manner.

Additional information not given on the floor of the House

In the case of the recently concluded negotiations between the EU and Canada, for example, a breach of the fair and equitable treatment obligation could only arise when there is denial of justice in criminal, civil or administrative proceedings; a fundamental breach of due process, including a fundamental breach of transparency, in judicial and administrative proceedings; manifest arbitrariness; targeted discrimination on manifestly wrongful grounds, such as gender, race or religious belief; or abusive treatment of investors, such as coercion, duress and harassment.

In addition, in the Canada agreement, there is provision for a list of arbitrators pre-agreed by the EU and Canada. In case of disagreement between the disputing parties, the arbitrator will be selected from this list. This ensures that the EU or Canada has always agreed to at least two of the three arbitrators that will act under agreement and will have vetted them to ensure that they live up to the highest standards.

Ultimately, and only after prior consultation with member states and in accordance with the EU treaties, the inclusion of investment protection and ISDS in TTIP will depend on an outcome satisfactory to the EU in meeting its interests both in relation to investment protection and in view of the final balance of the agreement as a whole.

I met recently with the US Trade Representative, Mike Froman, who told me that the US also sees the need for major improvement in the terms of ISDS. He reminded me that the US also has a strong interest in ensuring that the right of the US Government to regulate in the public interest is fully respected.

Paul Murphy (Dublin South West, Socialist Party)
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I would be highly sceptical of the promised growth figures form the Commission. Similar figures promised for the North American Free Trade Agreement, NAFTA, never materialised - in fact, a million jobs disappeared. Professor Clive George, who has previously done impact assessments for the European Commission, has noted that its model is highly speculative and said that the actual likely increase in growth rate is 0.01% per year over a ten-year period. Why do we need these for certainty of investment? Does the Minister think there is a fundamental flaw in the US justice system? Does he think there is a fundamental flaw in the European justice system? Why is the regular access to justice that any ordinary person can get not good enough for the corporations? Why do the corporations want to have the right, and why does the Minister want them to have the right, to sue in private tribunals where they get to choose the arbitrator? They pay them an average of $3,000 per day and get to invoke causes such as indirect expropriation, in the case of a challenge to fracking in Canada, where a corporation, Lone Pine, is suing for almost €200 million because of a moratorium on fracking. There are also challenges against a moratorium on nuclear power in Germany and challenges by the cigarette industry.

Richard Bruton (Dublin North Central, Fine Gael)
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First, the EU has made provision that such hearings will not be in private and the individuals involved will not choose the arbitrators. The choice of arbitrator will be by the two sides - the European Union and the US, if the US is involved. On the question of why such protections are necessary, the EU is seeking to set up investment agreements with many countries, including China, Korea and Singapore, and in many of these countries the body of law that one would need has not yet been developed, so there is clearly a case for investor protection. In the case of the US, they obviously want us to have uniformity across the EU, but the EU in its negotiating mandate has sought to ensure that European interests are protected by insisting that freedom of public policy will be guaranteed so that one can introduce regulation in those areas. The Canada agreement is a good model. A challenge can be brought under these systems - these are listed - where there has been a denial of justice in criminal, civil or administrative proceedings, a fundamental breach of due process, manifest arbitrariness, targeted discrimination on manifestly wrongful grounds or abusive treatment of investors. Clearly, those are protections that could reasonably be put into an agreement. It is important to bear in mind that we are negotiating with a sovereign government in the US and it, equally, is determined to ensure its freedom to regulate. This is an area where there is a mutual interest in having fair protection in such trade agreements.

Paul Murphy (Dublin South West, Socialist Party)
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When I worked in the European Parliament, I heard this argument again and again for ISDS in the case of trade agreements with countries with undeveloped legal systems. That was the argument put forward, but the US, which has the most developed legal system in the world, and, similarly, the EU are still arguing that corporations have special rights, rights that are not afforded to ordinary people in either bloc. This is a right of corporations to sue states that interfere with their right to make a profit. Does the Minister agree with the right of corporations to sue for what is known as indirect expropriation? Does he consider that our attempt to legislate for plain packaging for cigarettes could be challenged, as is currently happening under such agreements, with Philip Morris suing Uruguay and Australia? What is happening here is that the right to profit is being put above the right of states to regulate in the interests of public health, the environment and workers' rights, and it also represents a fundamental attack on our right to democratically discuss and decide on these policies, as opposed to allowing corporations to set the rules in private tribunals.

Richard Bruton (Dublin North Central, Fine Gael)
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The Deputy may have listened to debates in the European Parliament, but it does not sound like he learned anything from them, because the mandate specifically excludes all those social protection areas. Countries will have the right to pursue public policy objectives in all these areas under a model such as that set out with Canada. The Canada agreement has an investor protection mechanism, and environmental protection is perfectly within the rights of governments. Clearly, investor protection is an important part of any trade agreement. If one is investing, ones want to ensure - I listed the items - that one is not arbitrarily discriminated against. It is quite reasonable to put such protections into EU agreements. They are in the Canada agreement and they will be in all future agreements. Under the Lisbon treaty, we have given the European Union the ability to negotiate such protections. They give our investors certainty in the countries in which we invest, and the same is true of the parties with whom we are negotiating. Investors, including Chinese or Indian investors who do not have familiarity with our legal system, will want to see that the basic ingredients are protected, and that is the purpose of these mechanisms.

Michael Kitt (Galway East, Fianna Fail)
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Thank you, Minister. We must move on.