Heather Humphreys (Cavan-Monaghan, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 136 to 141, inclusive, together.

The Common Commercial Policy, including trade, is an exclusive competence of the European Union under the Treaty of the Functioning of the European Union. The Lisbon Treaty extended this competence to cover foreign direct investment, as well as making the European Parliament a co-legislator alongside the Council on trade matters. The European Commission acts as lead negotiator on behalf of all EU countries regarding trade agreements with non-EU countries. Member States (in Council) approve negotiating directives (or mandates) before negotiations begin, are consulted as the negotiations proceed and have final approval at Council as has the European Parliament.

The EU’s suite of Free Trade Agreements (FTAs) has evolved over time, from the ‘First Generation’ FTAs dating back to the 1970s which focused on tariffs for goods, to the current ‘New Generation’ of FTAs which go beyond the reduction or elimination of conventional tariff barriers to include; non-tariff and regulatory barriers, services, investment, recognition of professional qualifications, intellectual property rights, access to public procurement, regulatory cooperation, sustainable development, labour and environment.

The EU’s trade agreements differ depending on their content, with:

- Economic Partnership Agreements (EPAs) supporting the development of trade partners from African, Caribbean and Pacific countries.

- Free Trade Agreements (FTAs) enabling market opening with developed countries and emerging economies by granting preferential access to markets.

- Association Agreements (AAs) bolstering broader political agreements.

The EU also enters into non-preferential trade agreements, as part of broader deals such as Partnership and Cooperation Agreements (PCAs).

Negotiations of all these trade agreements are conducted in accordance with the rules set out in Article 218 of the Treaty of the Functioning of the European Union.

Bilateral Investment Treaties (BITs) are agreements which set the terms and conditions for investments between two states. Most BITs between EU member states (intra-EU BITs) date back to the 1990s when one or both countries were not yet a member of the EU. Their aim was to encourage investments by offering reciprocal guarantees against political risks which might negatively affect those investments.

Ireland is the only EU Member State with no BITs. A list of each EU Member State’s BITs can be found on the United Nations Conference for Trade and Development (UNCTAD) website, and can be accessed at: .

EU Member States no longer conclude bilateral BITs, and MS BITs with third countries are superseded when new EU agreements with those countries are concluded. 

In relation to trade Dispute Settlement, Article XXIV of the General Agreements on Tariffs and Trade (GATT) – the principal agreement under which the WTO operates - provides for the establishment and operation of Free Trade Agreements between parties to the WTO. The EU is currently operating approximately 70 preferential trade agreements in place world-wide, representing 40% of total EU trade.

The WTO’s Dispute Settlement Mechanism (DSM) has been in operation since 1994 under the Understanding on Rules and Procedures Governing the Settlement (Annex 2 to the main agreement). This mechanism provides an effective means of settling disagreements on whether a Member State has acted in conformity with its international obligations. This system of dispute resolution has been an effective mechanism in resolving disputes at the WTO.

The European Union has included a dispute settlement mechanism based on the WTO DSM in all of its Free Trade Agreements since 2000. The principals of the WTO DSM are mirrored in the dispute settlement procedures within FTAs negotiated by the EU. The FTAs stipulate consultation among the parties, referrals to a panel for arbitration, with a decision or recommendation issued on the substance of the claim. Decisions are binding with the losing party required to amend their trading practice and/or provide compensation to the injured party.

All EU-related FTAs are fully compliant with GATT and, in particular, Annex XXIV of the main agreement and Annex 2, the Dispute Settlement Mechanism.

Since 2015, the European Commission has followed a new approach to investment dispute settlement. The Investment Court System (ICS) was introduced as the EU’s preferred investment dispute settlement mechanism in bilateral trade agreements to replace Investor-State Dispute Settlement (ISDS), which was first introduced in the 1960s.  ICS was developed after a thorough consultation process which began in 2014 and involved the European Parliament, EU Governments and civil society at large. The development of ICS was a direct response to problems identified with ISDS. ISDS is a system based on the principles of commercial arbitration whereby parties who have a dispute appoint arbitrators who hear and resolve cases, often "in-camera". The problems with ISDS included a perceived lack of legitimacy, inconsistency, and a lack of transparency.  ICS, by comparison, is based on the features of a permanent public domestic or international court including independent panel members and transparent and efficient proceedings.

The ICS model was first presented in September 2015 and it was first included in CETA, signed in October 2016. Since then, ICS has been the EU’s preferred mechanism for resolution of investment disputes for inclusion in its Trade and Investment Agreements. The EU-Singapore Investment Protection Agreement and the EU-Vietnam Investment Protection Agreement both include ICS.

As the EU-Vietnam IPA, the EU-Singapore IPA and CETA are agreements of “mixed competence” – i.e. covers competences shared between the EU Commission and the Member States - they can only fully enter into force, including the CETA Investment Dispute Settlement elements, once each individual EU Member State has approved them in line with its own national procedures.

Insofar as the Deputy’s specific questions on CETA are concerned, CETA has been provisionally applied since 21^stSeptember 2017. The provisional application has allowed for the removal of customs duties, substantially improved access to the Canadian public procurement market, opened up new sectors of the Canadian services market, reduced regulatory barriers, and provided more transparent rules for market access.  The provisions within CETA which relate to areas of shared competence, between the EU and the Member States, including the Investment Court System (ICS) have been excluded from provisional application. This means that Ireland and the other Member States will not be bound by these provisions until they are ratified by all Member States in accordance with their national laws.

In 2017, Belgium requested an Opinion (1/17) from the Court of Justice of the European Union (CJEU) on the compatibility of the ICS in CETA with the European Treaties.  The Advocate General delivered his Opinion on this case on 29^thJanuary 2019, which found that the mechanism for the settlement of disputes is compatible with the EU Treaty, the FEU Treaty and the Charter of Fundamental Rights of the European Union. While this Opinion is not binding, and the final Opinion of the Court may differ, it is often an important indicator for the final ruling.  The Opinion of the CJEU on this matter is expected on 30^thApril 2019. My Department awaits this Opinion, which will inform my plans for ratification of CETA. To date, 12 EU Member States have ratified CETA: Austria, Croatia, Czech Republic, Denmark, Estonia, Finland, Latvia, Lithuania, Malta, Portugal, Spain and Sweden.

In relation to EU & National Studies on Free Trade Agreements, I can inform the Deputy that the European Commission published its second annual report on the implementation of trade agreements on 31^stOctober 2018. The report covers 2017 and shows that trade under existing EU trade agreements grew in 2017.  For example, exports to South Korea increased by over 12%, exports to Colombia by more than 10%, and EU exports to Canada rose by 7% in the nine months following the entry into force of the EU-Canada Agreement.  EU agri-food producers are among the main beneficiaries of the abolition of customs duties, with strong export increases last year.  However, the report also found that European exporters could benefit even more  from the opportunities offered by the Agreements in place.  As a result, the European Commission is increasing its efforts to inform and help EU companies, especially SMEs, to benefit from trade deals. The report can be accessed at: .

Separately, my Department has commissioned a study to examine the economic impacts for Ireland of EU Free Trade Agreements that were recently agreed or are under negotiation, including Korea, Japan, Canada, Mexico, Mercosur, Australia and New Zealand. The objective is to understand the impacts of these FTAs on the economy such as output, trade, employment and income. It will contain a range of recommendations to assist Ireland in capitalising on the benefits of the agreements and guide us on further actions to reduce barriers to implementation. This report is due to be completed by Q2 2019.

At EU level, the European Commission regularly undertakes impact assessments of Free Trade Agreements. These assessments provide evidence and information to inform decisions on trade policy. Impact assessments identify problems and solutions; and describe the likely economic, environmental, social and human rights impacts of those solutions. For trade agreements, they aim to address questions as to how negotiations will improve trade relations with a specific partner and what issues should be covered in the negotiations.  An impact assessment also includes an online public consultation of interested parties. The impact assessments are available at: .

On 18^thJanuary 2019, the European Commission adopted proposals for “Negotiating Directives” – or Mandates – for its proposed trade talks with the United States; one on conformity assessment (making it easier for companies to prove their products meet technical requirements on both sides of the Atlantic), and one on the elimination of tariffs for industrial goods (excluding agricultural products). The Commission published the draft mandates at the same time as submitting them to the EU Member States.

The proposed negotiating directives are currently being discussed by Member States and if approved by Council, the finalised mandates would set the parameters for formal negotiations to commence. However, it is important to note that these two mandates are of a limited scope, covering two distinct areas agreed in the July 2018 EU-US Joint Statement. They do not constitute a mandate for negotiations on a comprehensive Free Trade Agreement, which would involve negotiations across a far wider range of sectors and topics, including sustainable development.  My Department has engaged directly with stakeholders in Ireland on the terms of these mandates which has informed our approach.  As these negotiations are sectorally-focused based on the July 2018 Agreement between Presidents Juncker and Trump, the EU will not be negotiating on agricultural products/access.

Finally, the tabular information requested by the Deputy is as follows:

Figure 1: EU Free Trade Agreements entered into since 2000 which include a dispute settlement mechanism based on the WTO dispute settlement mechanism 

Title	Parties	Date of Signature	Date of Entry into Force
Albania-EC Association Agreement	EU, Albania	12/06/2006	01/04/2009
Algeria-EC Association Agreement	EU, Algeria	22/04/2002	01/09/2005
Bosnia-EC Stabilization Agreement	EU, Bosnia-Herzegovina	16/06/2008	01/06/2015
Chile-EC Association Agreement	EU, Chile	18/11/2002	01/02/2003
EC-Egypt Association Agreement	EU, Egypt	25/06/2001	01/06/2004
EU - SADC EPA Group Agreement	EU, Botswana, Lesotho, Mozambique, Namibia, South Africa, Swaziland	10/06/2016	05/02/2018
EU - Georgia Association Agreement	EU, Georgia	27/06/2014	01/07/2016
EU - Japan Economic Partnership Agreement	EU, Japan	17/07/2018	01/02/2019
EC-Jordan Association Agreement	EU, Jordan	24/11/1997	01/05/2002
EC - Lebanon Association Agreement	EU, Lebanon	17/06/2002	01/04/2006
Mexico-EC Cooperation Agreement	EU, Mexico	27/02/2001	01/03/2001
EU - Moldova Association Agreement	EU, Moldova	27/06/2014	01/07/2016
EU-Montenegro Association Agreement	EU, Montenegro	15/10/2007	01/05/2010
EC-Morocco Association Agreement	EU, Morocco	26/02/1996	01/03/2000
EC-Macedonia Association Agreement	EU, North Macedonia	09/04/2001	01/04/2004
EC-Serbia Association Agreement	EU, Serbia	29/04/2008	01/09/2013
EU-Korea FTA	EU, South Korea	06/10/2010	13/12/2015
CARIFORUM - EC EPA	EU, Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Saint Lucia, Saint Vincent and the Grenadines, Saint Kitts and Nevis, Suriname, Trinidad and Tobago, Dominican Republic	15/10/2008	Provisionally applied from 29/12/2008
EU-Cameroon Interim EPA	EU, Cameroon	15/01/2009	Provisionally applied from 04/08/2014
CETA	EU, Canada	30/10/2016	Provisionally applied from 21/09/2017
EU-Colombia/Peru/Ecuador FTA	EU, Colombia, Peru, Ecuador	26/06/2012	Provisionally applied between EU/Peru from 01/03/2013; between EU/Colombia from 01/08/2013; between EU/Ecuador from 01/01/2017
EU-Central America Association Agreement	EU, Costa Rice, El Salvador, Guatemala, Honduras, Nicaragua, Panama	29/06/2012	Provisionally applied between EU/Honduras, Nicaragua, Panama from 01/08/2013; between EU/Costa Rica, El Salvador from 01/10/2013; between EU/Guatemala from 01/12/2013
EC- Cote d'Ivoire EPA	EU, Cote d’Ivoire	26/11/2008	Provisionally applied from 03/09/2016
EU-ESA EPA	EU, Comoros, Madagascar, Mauritius, Seychelles, Zimbabwe	29/08/2009	Provisionally applied from 14/05/2012
EU-Papua New Guinea	EU, Papua New Guinea, Fiji	Signed by EU/PNG on 30/07/2009; signed by Fiji on 11/12/2009	Provisionally applied between EU/PNG from 20/12/2009; between EU/Fiji from 28/07/2014
EU-West Africa EPA	EU, Benin, Burkina Faso, Cape Verde, Ivory Coast, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone, Togo	December 2014[2]	N/A
EU-Iraq Partnership and Cooperation Agreement	EU, Iraq	11/05/2012	Trade provisions entered into force provisionally on 01/08/2012
EU-Kazakhstan Enhanced Partnership and Cooperation Agreement	EU, Kazakhstan	21/12/2015	Provisionally applied from 01/05/2016
EU-Ukraine DCFTA[3]	EU, Ukraine	27/06/2014	Provisionally applied from 01/01/2016
EU-EAC EPA	EU, Burundi, Kenya, Rwanda, Tanzania, Uganda	01/09/2016 by EU, Kenya, Rwanda	N/A
EU-Singapore FTA	EU, Singapore	19/10/2018	N/A
EU-Singapore IPA	EU, Singapore	19/10/2018	N/A
EU-Vietnam FTA	EU, Vietnam	N/A	N/A
EU-Vietnam IPA	EU, Vietnam	N/A	N/A
EU-Mexico Global Agreement Modernisation	EU, Mexico	N/A	N/A

Figure 2: EU Free Trade Agreements entered into since 2009

Title	Parties	Date of Signature	Date of Entry into Force	ISDS Mechanism
Albania-EC Association Agreement	EU, Albania	12/06/2006	01/04/2009	No
Bosnia-EC Stabilization Agreement	EU, Bosnia-Herzegovina	16/06/2008	01/06/2015	No
EU - SADC EPA Group Agreement	EU, Botswana, Lesotho, Mozambique, Namibia, South Africa, Swaziland	10/06/2016	05/02/2018	No
EU - Georgia Association Agreement	EU, Georgia	27/06/2014	01/07/2016	No
EU - Japan Economic Partnership Agreement	EU, Japan	17/07/2018	01/02/2019	No
EU - Moldova Association Agreement	EU, Moldova	27/06/2014	01/07/2016	No
EU-Montenegro Association Agreement	EU, Montenegro	15/10/2007	01/05/2010	No
EC-Serbia Association Agreement	EU, Serbia	29/04/2008	01/09/2013	No
EU-Korea FTA	EU, South Korea	06/10/2010	13/12/2015	No
EU-Cameroon Interim EPA	EU, Cameroon	15/01/2009	Provisionally applied from 04/08/2014	No
CETA	EU, Canada	30/10/2016	Provisionally applied from 21/09/2017	No-Investment Court System
EU-Colombia/Peru/Ecuador FTA	EU, Colombia, Peru, Ecuador	26/06/2012	Provisionally applied between EU/Peru from 01/03/2013; between EU/Colombia from 01/08/2013; between EU/Ecuador from 01/01/2017	No
EU-Central America Association Agreement	EU, Costa Rice, El Salvador, Guatemala, Honduras, Nicaragua, Panama	29/06/2012	Provisionally applied between EU/Honduras, Nicaragua, Panama from 01/08/2013; between EU/Costa Rica, El Salvador from 01/10/2013; between EU/Guatemala from 01/12/2013	No
EC- Cote d'Ivoire EPA	EU, Cote d’Ivoire	26/11/2008	Provisionally applied from 03/09/2016	No
EU-ESA EPA	EU, Comoros, Madagascar, Mauritius, Seychelles, Zimbabwe	29/08/2009	Provisionally applied from 14/05/2012	No
EU-Papua New Guinea	EU, Papua New Guinea, Fiji	Signed by EU/PNG on 30/07/2009; signed by Fiji on 11/12/2009	Provisionally applied between EU/PNG from 20/12/2009; between EU/Fiji from 28/07/2014	No
EU-West Africa EPA	EU, Benin, Burkina Faso, Cape Verde, Ivory Coast, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone, Togo	December 2014	N/A	No
EU-Iraq Partnership and Cooperation Agreement	EU, Iraq	11/05/2012	Trade provisions entered into force provisionally on 01/08/2012	No
EU-Kazakhstan Enhanced Partnership and Cooperation Agreement	EU, Kazakhstan	21/12/2015	Provisionally applied from 01/05/2016	No
EU-Ukraine DCFTA	EU, Ukraine	27/06/2014	Provisionally applied from 01/01/2016	No
EU-EAC EPA	EU, Burundi, Kenya, Rwanda, Tanzania, Uganda	01/09/2016 by EU, Kenya, Rwanda	N/A	No
EU-Singapore FTA	EU, Singapore	19/10/2018	N/A	No
EU-Singapore IPA	EU, Singapore	19/10/2018	N/A	No-Investment Court System
EU-Vietnam FTA	EU, Vietnam	N/A	N/A	No
EU-Vietnam IPA	EU, Vietnam	N/A	N/A	No-Investment Court System
EU-Mexico Global Agreement Modernisation	EU, Mexico	N/A	N/A	No-Investment Court System

[1]The Investment Court System is not comprehended by the provisional application of CETA.

[2]Except Nigeria, Mauritania and Gambia. Gambia signed on 9^thAugust 2018 and Mauritania on 21^stSeptember 2018. Nigeria remains the only country of West Africa that has still not signed the EPA.

[3]This is part of the broader Association Agreement (AA) whose political and cooperation provisions have been provisionally applied since November 2014.