Written answers

Tuesday, 11 March 2008

Department of Foreign Affairs

EU Treaties

8:00 pm

Photo of Damien EnglishDamien English (Meath West, Fine Gael)
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Question 134: To ask the Minister for Foreign Affairs the implications the Lisbon Treaty has for Irish policy with respect to foreign direct investment; if Ireland will be able to set its own policy in this area; and if he will make a statement on the matter. [10332/08]

Photo of Dermot AhernDermot Ahern (Louth, Fianna Fail)
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The Reform Treaty provides for a more effective European Union across a range of areas. The Treaty will allow the Union to continue to develop positively, as it has throughout our thirty-five year membership. A more effective Union will continue to make Ireland an attractive place for foreign direct investment. All Member States remain free to determine their own policies in these areas subject to state aid, competition rules and other areas of EU competence. The Reform Treaty does not change this position. Indeed, Article 2.157 of the Treaty makes clear the Union's commitment to the progressive abolition of restrictions on trade and foreign direct investment. Accordingly, nothing in the Reform Treaty poses a threat either to Ireland's foreign direct investment policy or to broader national enterprise policy.

The Common Commercial Policy — the Union's international trade policy — is one of five areas of exclusive Union competence. In trade negotiations, the Commission negotiates on behalf of the Union, subject to a mandate given it by the Member States. In the Reform Treaty, the Common Commercial Policy includes a reference to foreign direct investment. This reflects the growing importance of outward investment from Europe in a globalised world. For example, existing Free Trade Agreements contain provisions about what rules will apply to investment by EU companies in other countries and vice versa. Foreign direct investment is therefore already an aspect of the EU's Common Commercial Policy. Mentioning foreign direct investment in the Reform Treaty merely adds clarification, recognising the EU's existing involvement in the area.

In the Reform Treaty, Qualified Majority Voting is the standard decision making mechanism in the Common Commercial Policy. However, there are some important qualifications. The Council is to act unanimously in the areas of trade in services, intellectual property and foreign direct investment where the negotiations cover issues for which unanimity is required internally. An important example of this would be the area of taxation. Under the Reform Treaty, Ireland continues to have the right to determine how our fiscal policy is developed and applied. For us, this is a key aspect of enterprise policy for both indigenous and foreign direct investment sectors.

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