Tuesday, 19 July 2016
I thank the Cathaoirleach for selecting this issue and the Minister of State for attending to address the many concerns regarding the proposed Comprehensive Economic and Trade Agreement, CETA, between Canada and the EU. CETA will apply to an unprecedented number of public contracts, including at local level, which will have implications for the policy space in those contracts or services. The European regulatory council will have a mandate to privilege the least burdensome option in respect of regulation, which has the potential to undermine present and future regulations over, for example, environment, employment and employment issues. This concern has been highlighted by ICTU, environmental lobby groups, Trócaire and many health organisations. CETA was negotiated prior to Brexit and the removal of the UK's large market from the EU could see Canadian beef exports redirected into other countries like ours, which would have a serious economic impact.
However, my focus is on the Constitution. Will the Minister of State assure the House that, when he or another member of the Government attends the Council of Ministers meeting in October, the Government will not sign up to the provisional application of CETA and will instead uphold Article 29.5.2o of the Constitution, which reads: "The State shall not be bound by any international agreement involving a charge upon public funds unless the terms of the agreement shall have been approved by Dáil Éireann"?
Let us be clear in that CETA will involve a charge on public funds. It would bring into effect for the first time in Ireland investor-state dispute settlement courts, which could allow corporations to sue the State for the potential loss, not only of present profits, but of future ones. In other countries where such courts already operate, many of the settlements sought have run into billions in national currency. The ultimate blank cheque, it could speedily deplete the Government's proposed rainy day fund.
In response to parliamentary questions, the Minister has stated that such trade agreements are not part of domestic law, which is why separate adjudication arrangements are required. However, any law that is applied within our State must be tested for compatibility with our laws and to ensure that they are not repugnant to the Constitution. Has the Minister spoken with the Attorney General in this regard? Is the Minister comfortable with a situation in which Irish companies would work under Irish domestic law while international companies would have recourse to a new and different mechanism, which would be a particular advantage for them? The current position held by the EU Commission in this regard is somewhat contradictory. In recognition of the political situation, it has agreed to treat CETA as a mixed agreement that requires the approval of the European Parliament and national parliaments. At the same time, it wants signing and provisional application to go ahead in advance of the securing of political approval from the various parliaments. It has reserved the legal opinion that the EU Commission has exclusive competence and has said it will wait to see the outcome of a case being taken in respect of the EU-Singapore deal at present.
In the circumstances I have outlined, would it not be prudent for other member states and the Irish Government to wait to see the results of that court case, which are due next year, before any provisional application is signed? This has been recommended by many legal experts, including those from ClientEarth. Given that a court case on the constitutionality of CETA was recently launched in Germany, and in light of the widespread and growing calls for a case on the overall compatibility of investor-state dispute settlement mechanisms with EU law to be taken to the European Court of Justice, is it not inappropriate to move ahead when so many cases are pending?
This is not a case of trade as usual. The EU Commission has marked this as a milestone. It has been suggested that as the most ambitious trade agreement ever, this marks the beginning of a new generation of such agreements. If we are in a new and experimental space, in which we are trying out a new generation of trade agreements, does it not behove us to test them fully against our legal and parliamentary systems? What signal does it send to the EU population, at a time of growing and dangerous disillusionment with the rule of law and politics, if states and EU bodies choose to bypass the legal and parliamentary processes to short-circuit matters in respect of this particular trade agreement?
I thank Senator Higgins and welcome her contribution. We should have had a debate on these agreements in recent years.
The EU-Canada Comprehensive Economic and Trade Agreement, CETA, is a new-generation agreement that will remove over 99% of tariffs between the EU and Canada. CETA will significantly improve business opportunities for Irish companies in Canada. With CETA, Irish companies will receive the best treatment that Canada has ever offered to any trading partner, thereby levelling the playing field on the Canadian market for Irish and other EU companies. By opening markets, CETA should support growth and jobs and bring further benefits for consumers. It has the potential to keep prices down and to provide consumers with greater choice.
The main benefits of this agreement for Ireland include the opening up of public procurement markets in the Canadian provinces. This will give Irish firms increased access to Canadian public sector purchasing. Ireland will also gain unlimited tariff-free access for most of its important food exports. Of course, we are all conscious of the importance of food exports from Ireland, particularly to Canada. In addition, Ireland successfully campaigned for a low beef import quota from Canada to the EU, thereby safeguarding our important EU market in this area. Irish firms will also benefit from the recognition of product standards and certification, thereby saving on double-testing on both sides of the Atlantic. This is of particular benefit to smaller companies for which it can be prohibitive to pay twice for the same test. These are some of the benefits of the trade deal with Canada, which will provide new market opportunities for Irish firms in many sectors.
In May of this year, the Council had an exchange of views on CETA and on the process towards signature and provisional application of CETA. The European Commission and the member states highlighted the high quality of the agreement that had been reached with Canada and expressed a desire to work towards the signature of the agreement at the EU-Canada summit in October. The Commission published its proposals for signature, conclusion and provisional application on 5 July last and they are available on the Commission's register of documents. On 13 May last, at the most recent meeting of the EU Council of trade ministers, the Minister, Deputy Mitchell O'Connor, made clear that our approach - based on our current assessment of the provisions of CETA - is that we view CETA as a mixed agreement in terms of EU and member state competency. In view of the position taken by Ireland and other member states, the Commission has now decided to submit CETA to the Council for decision as a mixed agreement. This means each member state will be required to ratify the agreement under its own procedures. The Oireachtas will be part of the final decision on ratification.It will now be a matter for the Council and the European Parliament to decide on the signature, conclusion and the provisional application of the CETA.
Provisional application is provided for in the EU free trade agreements. This means that those areas where the EU has full competence may be applied immediately once the agreement comes into force. It is an important mechanism that allow companies and consumers to benefit from a trade agreement at an early stage. Provisional application of the CETA would be without prejudice to national ratification by member states. The provisional application of free trade agreements is standard practice. What is at issue is what should be within the scope of such application. Discussion on this matter continues in the Council. We have argued that only those areas directly within exclusive Commission competence should be covered by the provisional application. As already noted, the Commission has already accepted that the CETA is a mixed agreement.
It is in Ireland's interest to see strong progress towards the implementation of the CETA as it will provide opportunities for Irish firms to diversify their export markets further. Total export and import trade between Ireland and Canada is worth €2.5 billion, which is based on 2014 trade results. That is a great deal of trade between the two countries and there are great opportunities to grow it further when the CETA is implemented.
I ask the Senator to be brief. There are eight minutes allocated for each matter and we have taken ten minutes on this already. Members ask me why I do not select more Commencement matters, but it is not possible because Members do not stay within the time they are allotted.
Will the Minister of State address the concern that it is not at the discretion of Ireland to end provisional application if we find it to be incompatible with our Constitution because a qualified majority would be required to end provisional application? Will he also inform the House of the position taken by Ireland's permanent representatives who attended a meeting last Friday, to indicate which areas we regard as specific competence of the European Commission and which areas are part of a mixed agreement? What position was taken by Ireland at the negotiations on that last Friday? Moreover, we have trade worth €2.5 billion with Canada, so we already have a very healthy trading relationship. We also have a healthy trading relationship with the US. This is not a matter of speaking against trade but of examining a new instrument and ensuring that it is fully scrutinised. Will the Minister of State also address the rationale for not waiting until the legal concerns currently at issue have been addressed?
We cannot be complacent about trade. We face many challenges in exporting. There are also the international challenges with Brexit, which the Senator mentioned earlier. Negotiating trade agreements takes a long time, they do not happen overnight. We see what is happening with the Transatlantic Trade and Investment Partnership, TTIP.
I will reiterate what is important here. I do not have information on what happened at the meeting last Friday, but I am sure we can arrange to get it to the Senator. It is important to make the point that this agreement, when it is implemented, will open huge opportunities. The Senator made it clear that we have great trade, but we must grow it further. Consider all the Irish people in Canada at present. There are close relations between the east coast of Canada and Ireland, and Canada wishes to do more business with Europe. We should be in a position to avail of that opportunity. It is also important that, if this agreement comes into force, we can tender for public contracts in Canada, which we could not do previously. That offers huge opportunities for Irish companies that wish to work overseas.
We must focus on the swift ratification of the CETA. I hope we can sign the agreement before the end of autumn. It will be a positive light for Ireland in the coming months. There are huge opportunities. The EU and Canada share many common goals and objectives and each party brings with it high environmental and labour standards. The agreement that has been negotiated will strengthen corporate social responsibility, which is also important. A growing market share in other markets is even more important for Ireland than it is for other countries, particularly since the UK referendum, and I look forward to the Dáil giving approval to ratify this agreement.Perhaps the jobs, enterprise and innovation committee might discuss the CETA as part of its autumn programme. It is important that the Senator raise the issue in order that the committee might take on that role. It is important to discuss issues in the House, particularly trade agreements. I am not sure that was done in the past, but a debate on trade agreements could form part of the committee's work schedule in the autumn.
I look forward to the Dáil giving approval to ratify the agreement once the EU institutions have completed their procedures.