Canadian government insists CETA will not have ‘chilling effect’ on governments

The Canadian government has insisted the contentious investor resolution mechanism of its trade agreement with the EU will not have a “chilling effect” on European governments including Ireland when drafting environmental, public health or labour laws.

Senior Canadian diplomats based in Dublin and Brussels, as well as the Ireland Canada Business Association, spoke at a virtual meeting of the Oireachtas committee on European on Tuesday. It is scrutinising the Comprehensive Economic and Trade Agreement (Ceta) between the EU and Canada, ahead of a ratification vote in the Dáil.

The agreement had been due to be ratified in December 2020 but was pulled back after several Green TDs threatened to vote against it. Since then it has been the subject of prolonged internal debate within the Greens, which has been a factor in the deep divisions that have emerged in the Government party. One of its TDs, Patrick Costello, has initiated High Court proceedings in relation to the constitutional standing of Ceta.

Several contributors including Sinn Féin’s John Brady and Ruairí Ó Murchú, Jennifer Whitmore of the Social Democrats, Lynn Boylan of Sinn Féin and Alice Mary Higgins had referred to previous multi-billion euro cases taken by large corporations against Governments in the past, where they claimed domestic laws had impacted on their “fair and equitable” expectations of future profits.

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The Canadians speakers all dismissed the possibility that such eventualities would occur under Ceta.

The main issue of contention in Ceta, identified early in the hearing by Brendan Howlin of Labour was the Investor Court System, and if it allowed private companies to sue European States if their laws impacted on profitability.

The charge d’affairs at its Dublin Embassy, Suzanne Drisdelle told the committee that Ceta had dispensed with the investor state dispute settlement (ISDS) and replaced it with an Investor Court System, which provided transparency, predictability and safeguards that meant important domestic laws giving protection in the public policy sphere remained unaffected by Ceta.

“I can understand (the chilling effect is an emotional concern” she said arguing that Ceta protected domestic governments in its laws and regulation and policies on the climate, the environment, labour, and public health.

“I do not see the chilling effect as a serious concern,” she added.

Reuben East, counsellor on trade and the economy at Canada’s European Mission, said Ceta the Investor Court System guaranteed the right of government to regulate in the public interest in areas such as agriculture goods, public services, the environment, culture, health and safety and labour protection.

“This is quite important because (those areas) can not be the subject of a dispute. This is quite an important way to buttress this potential concern of the chilling effect,” said Mr East.

In essence, the argument was made that companies could not sue a Government for existing, or new, laws or policies in areas such as climate change or health and safety.

That interpretation was disputed by several attendees including Ms Higgins and Ms Boylan

Asked by Neale Richmond of Fine Gael the implications of reopening negotiations on Ceta in the event it was not ratified by Ireland, Mr East said: “To have it reopened would not certainly be a light matter.”

Chris Collenette of the Ireland Canada Business Association, replying to a question from Mr Brady, said if Oireachtas did not ratify the accord, it would “not help the relationship”.

Mr Collenette told the meeting that Ceta had helped create a total of 15,000 jobs associated with Canadian firms in Ireland. Asked by Ms Whitmore to name the members of his association, he declined citing GDPR concerns.

Several speakers, including Mr O Murchú, Ms Higgins and Ms Boylan referred to a Canadian energy company, Vermilion (which runs the Corrib Gas field), threatening to sue the French government over proposed changes to its policies on oil and gas.