I reiterate that ratifying CETA is Government policy and an objective of mine as Minister for Enterprise, Trade and Employment. While I welcome the scrutiny, I do not want ratification delayed and drifting indefinitely, and for Ireland to have to stand by and watch other member states ratify it ahead of us, as the majority already have. That would send out the wrong message to the world, one of 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 in support of free trade.
Unlike other countries, Ireland is not wealthy in natural resources. We did not grow wealthy on the back of colonies. Nobody owes us a basic income. As a country, we owe our relative prosperity to the goods and services produced by our people and our land which we sell around the world. It is a formula that has worked very well. It is based on international trade, our attractiveness as a place to invest and our ability to enter international free trade agreements with other countries. Our position at the heart of Europe, its Single Market and the eurozone is also crucial to this.
This economic model has consistently raised our living standards throughout the decades and created hundreds of thousands of jobs for our citizens. We will depend on that for the recovery. It is the model that can best serve Ireland, the EU and the world as a whole, lifting billions out of extreme poverty in our lifetime. This is the message I conveyed last week to EU trade ministers as we finalise Europe’s trade policy review.
However, Ireland cannot take this for granted. Following the departure of the UK from the European Union, Ireland has an even bigger responsibility to promote the EU’s role as a champion for global free trade and to resist any backward moves towards nationalism or protectionism. Nor can we take for granted the range of free trade agreements we benefit from every day - trade agreements that are negotiated on our behalf by the European Union, as a bloc of 27 countries and 440 million citizens.
Since the provisional application of CETA in 2017, the benefits have been plain to see. Goods exports to Canada increased from €953 million in 2016 to more than €1.7 billion in 2020, an increase of 78%. Services exports grew from €1.6 billion in 2016 to more than €2.3 billion in 2019, an increase of 44%. This all benefits Irish jobs, Irish businesses and Irish tax revenues, which we use to fund our public services and public infrastructure.
The elimination of tariffs, reduced trade barriers and simplified customs procedures and the more compatible technical requirements that flow from CETA make it easier and cheaper for Irish companies of all sizes to trade with Canada.
My Department recently released the results of an independent study by Copenhagen Economics of the potential economic opportunities and impacts for Ireland of the EU's free trade agreements, FTAs, with Canada, South Korea, Mexico and Japan. It found that these four European Union FTAs are forecast to have a positive effect on trade, GDP and national income for Ireland. It goes without saying that the deal with Japan benefits us the most, but that is due to the size of that country and its economy, which is approximately 120 million relative to Canada's 20 million. An important finding is that real wages would increase by up to 4.4% by 2030 as a result of the trade agreements, with the largest increases for low-income workers. This refutes the notion that well-designed free trade agreements exert downward pressure on wages or labour standards when in fact the reverse is true.
As members are aware, the full coming into force of CETA, once ratified across all member states, will see the implementation of the investment chapter of the agreement, including provisions for the resolution of disputes between investors and states should they arise. This has been the area of most controversy. All international agreements have dispute resolution arrangements. They have to. Where such agreements cover not only trade in both goods and services but also investment rules and protections, then there must be some form of dispute resolution mechanism that covers the investments. The EU's new approach to investment protection is the investment court system, ICS, which is contained in CETA and replaces the old investor-state dispute settlement or ISDS mechanism. It is something that we, as Europe, looked for. It was not imposed on us by Canada or anyone else. It is there as much to protect our companies and their workers and to ensure that they are treated fairly and not discriminated against if they trade with China and other countries.
The rights of governments to regulate in the public interest is paramount and I believe this is fully protected under the terms of this agreement and the joint interpretative instrument. Investors may utilise national courts or the ICS but cannot use both or forum shop. Equally, it is important to remember that a Canadian firm can already sue the Government for alleged unfair treatment or discrimination in our courts whether CETA exists or not. In the courts today we see plenty of examples of companies suing the Government and its agencies or the Government and its agencies suing companies. The same will apply to Irish companies that operate in Canada, so it very much works both ways. CETA simply provides an arbitration alternative to using national courts. However, that alternative, unlike a challenge in the courts, cannot find any act by Government to be ultra vires or unconstitutional - it is concerned only with redress if harm is proven. As the ICS tribunal cannot interpret national law or seek to overturn it, there is no question of it overriding national courts or legislatures. Significantly, CETA introduces a precise and specific standard of "fair and equitable treatment" of investors and investments. Therefore, an investor may only have recourse to the investment court system on very specific limited grounds such as in the case of the denial of justice, a fundamental breach of due process, or through targeted discrimination for example on the grounds of race religious belief or gender. None of these rights gives the Government any concern that Ireland would be subject to ICS proceedings. We are not going to discriminate against Canadian companies or treat them unfairly, so we do not anticipate many serious legal challenges. Moreover, it is important to say that under the ICS a state can never be forced to change its legislation, only to pay fair compensation in cases where the investor is deemed to have been treated unfairly under the specific grounds detailed. It is important to make clear that an investor cannot be given compensation just because they have lost profits or suffered economic loss or costs. It is for the investor to prove they were discriminated against and to establish that it incurred losses as a consequence of the discrimination.
CETA reaffirms the EU and Canada's right to regulate to achieve legitimate policy objectives, such as the protection of public health, the environment or consumer protection, meaning policies such as those relating to plain packaging on cigarettes, or minimum alcohol pricing can continue to be introduced. These "right to regulate" provisions are specifically designed to avoid any danger of so-called "regulatory chill". Despite having more trade agreements than ever, we have more regulations than ever and it is pretty obvious that one does not prevent the other.
As part of the finalisation of the agreement, the EU and Canada also agreed a legally binding joint interpretative instrument, JII, that was added to CETA to provide further assurances in relation to public services, labour rights, environmental protection and investment. CETA does not restrict either the EU or Canada from passing new laws in areas of public interest such as the environment, and health and safety nor does CETA affect the Government's scope for developing new laws in response to the needs and priorities of Irish citizens. Importantly, within CETA, both sides agree that more trade and investment should not be at the expense of environmental protection and labour rights. The EU and Canada will not seek competitive advantage through the lowering of standards in any domain. On the contrary, the European Union and Canada are committed to ensuring that CETA helps confirm that economic growth, social development, and environmental protection should go hand in hand as far as is practicable.
As a small, open economy, Ireland has benefited immensely from our export-orientated enterprises trading across the globe and, therefore, we support international trade and the EU free trade agreements that seek to underpin this. Equally, Ireland has been an attractive destination for foreign direct investment, FDI, for many decades and participating in EU third country agreements that cover investment and provide investment protection continue to assist us in marketing Ireland as a competitive FDI-friendly jurisdiction for multinational enterprise to invest with the attendant jobs and prosperity that entails.
As somebody who hopes in the coming months to travel to North America and around the world again to promote Ireland as a place to invest, ratifying CETA is an advantage in that regard. Not doing so may cause some potential investors to have concerns. Taking the foregoing into consideration and given that there can be no doubt that CETA is a progressive, high-standard agreement, I believe that ratifying the agreement, albeit at this late stage, would send a positive message to our trading partners around the world that Ireland continues to be committed to the values of open and fair global trade. I again thank the committee for taking the time to consider the agreement in detail. I hope this process can help us to move towards ratification very soon.