Not to ratify EU-Canada trade deal would spark ‘political crisis’

A failure by Ireland to ratify the EU-Canada trade agreement Ceta would “precipitate a political crisis in the EU”, Tánaiste Leo Varadkar has warned today.

Mr Varadkar said that rejecting the trade agreement would “throw a spanner in the works” and would put Ireland in a difficult position internationally as it would be the “first time” it would have happened for an EU trade agreement.

“The European Union has been around a long time. There have been a lot of trade agreements but never has it arisen that a state would permanently reject a deal and it would put Ireland in a difficult position.

“It would precipitate a political crisis in the EU because we would be the only country doing that. It would send out a strong message that Ireland is no longer committed to free trade and enterprise,” he told the Oireachtas committee on enterprise and trade.

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Mr Varadkar said he has had conversations with other EU ministers about the agreement and the expectation is that it will be ratified.

“There’s nobody talking about a plan B or renegotiation or a what if. We would really be throwing a spanner into the works if we decided we would be the only country to reject it.”

He said that not accepting it would send out the wrong message to the world, one of a waning commitment to trade and free enterprise in Ireland which would have negative consequences for investment and employment.

“Ireland should be a leader in Europe when it comes to free trade in my view,” he added.

He also said that he could not say why Minister for Transport Eamon Ryan had changed his position on it.

The Investor State Court (ISC) replaced the Investor-State Dispute Settlement (ISDS), which enabled overseas investors to resolve disputes via a tribunal. The ISDS was subject to widespread criticism, with critics arguing it favoured corporate rights over sovereign countries’ interests, and the mechanism was abandoned by the European Commission in favour of the ISC during the negotiation of Ceta. However critics have said the ISC system is problematic and sets up courts outside the domestic system.

Mr Varadkar said that all international agreements have dispute resolutions arrangements.

“I think it is important to point out that this is something that we as a European Union looked for in negotiations and wanted included, it is not something being imposed on us by anybody else. In Ireland were we not to ratify Ceta . . . this would bring substantial legal uncertainty for businesses around tariffs and market access as well as customs and conformity requirements.”

Sinn Féin reaction

Sinn Féin TD Louise O’Reilly asked whether the Government had set a timeframe for putting the deal to the Oireachtas.

Mr Varadkar said it was decided not to go ahead with a vote to allow for further scrutiny of the plans. A date has not yet been set for a Dáil vote.

The High Court last week dismissed a challenge by Green Party TD Patrick Costello over constitutionality of aspects of the deal.

In a detailed judgment dismissing the action, Ms Justice Nuala Butler said she was satisfied that Mr Costello had “not established that the ratification of the 2016 Ceta in the manner proposed would be clearly unconstitutional”.

People Before Profit TD Paul Murphy asked about the company Ires Reit and asked if cases could be brought to the investor court if, as an example, further rent controls were introduced in Ireland.

Mr Varadkar said any company could sue the country in either courts system.

He also told the committee that several Canadian property companies invest in Ireland and fund new housing here. This will not change as a result of Ceta, he added.