Transatlantic Trade and Investment Partnership: Discussion

I wish to inform members of the committees that this meeting will be carried live on UPC channel 207, eVision channel 504 and Sky channel 574. I remind members, visitors and those in the Visitors Gallery to please ensure their mobile telephones are switched off for the duration of this meeting as they interfere with the broadcasting equipment even when in silent mode. Members are here this afternoon to discuss the Transatlantic Trade and Investment Partnership, TTIP, a potential European Union-United States trade agreement currently under negotiation. I welcome the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, and his officials to the meeting to discuss the Transatlantic Trade and Investment Partnership. I am delighted to be joined today by Deputy Andrew Doyle, Chairman of the Joint Committee on Agriculture, Food and the Marine and Deputy Seán Kyne, Vice Chairman of the Joint Committee on European Union Affairs, as well as other members of these committees.

In view of the cross-sectoral nature of this issue, members are delighted to have the opportunity to meet the Minister, Deputy Bruton, in joint session to discuss areas of particular concern to their respective committees. These concerns relate primarily to investment protection and investor-state dispute settlement, ISDS, mechanisms. There are fears that these basic investment protection rules allow for potential abuses. There also are concerns regarding the potential for job displacement, which, despite the potential overall increase in employment, may prove to be a difficult hurdle for some citizens. I am aware that despite these concerns, there also are many opportunities within TTIP. The key findings of the Copenhagen Economics report, TTIP impact in Ireland, are highly positive overall with a potential impact of a 1.1% increase in GDP. This is more than double the impact for the European Union as a whole. As matter of particular interest to the Joint Committee on Jobs, Enterprise and Innovation, the potential reductions in regulatory complexities and costs for exporters are welcome, especially as this is expected to benefit disproportionately small and medium-sized enterprises, SMEs. Today's discussion will be enlightening and will serve as a platform for the ongoing participation of the committees present today in analysis of the negotiations and in informing members' parliamentary colleagues on the contents and merits of the agreement when member states are asked to ratify the agreement. I now invite the Minister, Deputy Bruton, to make his presentation to the committees.

I thank the Co-Chairman. At the outset I wish to state how pleased I am to be here. From my point of view I have never participated in a joint meeting of three committees. This meeting presents me with an excellent opportunity and I thank those concerned for organising it.

To give members the backdrop to why trade negotiations are an important concern in Europe, it stems from the fact that if one considers global growth, 90% of it will occur outside the European Union in the coming years. As one looks from a European context, where growth has been subdued for many years, one must be aware that the potential for trade with these fast-growing economies is an area that should not be missed. This is why Europe has identified bilateral trade discussions with numerous different countries as a major potential growth source.

It has been estimated that it would have a growth potential of approximately 2.5% of European GDP if all of those agreements were put in place. That is the backdrop.

From the point of view of the US, and why it is so prominent, one third of all global trade among major regions occurs between Europe and the US. It is, therefore, a very significant area of investment. In fact, 50% of US foreign direct investment, FDI, comes to Europe and a similar proportion of European overseas investment goes to the US. These economies are quite closely interlinked. Ireland probably has the highest exposure to the US of any European economy. US companies in Ireland employ approximately 135,000 people and have been a source of significant growth, particularly in the past couple of years, as the country has emerged from a very difficult period. It is interesting that Irish companies involved in exporting - they are supported by Enterprise Ireland in this regard - have targeted the US market to a great degree in recent years. This market has shown remarkable growth in recent years, with the relevant rate averaging out at approximately 20% in the past four years. So it is a significant growth market and is particularly important for Irish service producers. The potential for Ireland of a trade agreement that will reduce tariffs, removes non-tariff barriers and increases the capacity to remove unnecessary costs for those involved in trading - for example, pharmaceutical companies - is very significant. There is no doubt about that. We tend to gain, on a per capita basis, approximately double what would be the typical gain. As a result, the potential gains for this country would be significant.

From where do the gains come? If tariffs are removed, the prices Irish exporters would receive in return for their goods in the marketplace would rise. Similarly, if we remove tariffs, consumers obtain better value for goods they purchase. There are a number of routes through which the benefits occur. By and large, however, tariffs are not the big element. Average tariffs between the US and the EU are running at approximately 3% to 4% and higher in the case of some agricultural produce. The latter is because there are larger barriers in the context of agriculture. The largest barriers are to be found in the non-tariff area and, on average, they stand at over 20%. In some areas, such as the dairy sector, these barriers are very significant and keep Irish dairy exports to the US to very low levels. They are also very substantial in areas such as pharmaceuticals. Effectively, as a result of the fact that there is no regulatory co-operation, virtually the same tests often have to be carried out in both jurisdictions in order for products to be approved for sale. This imposes a cost. That is the backdrop to this aspect of the matter.

During Ireland's Presidency of the EU, the mandate was agreed. This mandate is very ambitious but it also lays down some important markers. One of these relates to the fact that there will be no interference with the right to uphold high standards, particularly in Europe but on both sides in general, in the context of protecting labour, environmental standards and food standards. Explicit statements were made to the effect that there would be no change to the European rules on genetically modified organisms, GMOs. There was also an explicit statement to the effect that there would be no question of this agreement being used to privatise public services. The legitimacy of running such services how one chooses is absolutely recognised. In addition, it was stated that there will be no interference with the right to make new regulations if, as and when the public demands this. The mandate was agreed and, at this stage, we are entering into the negotiation period.

An investor dispute settlement mechanism, ISDS, was included in that mandate but only if it met Europe's interests and the reason it was included was that in the US, there are 50 different states and they do not automatically incorporate treaty agreements into their law. An Irish company wanting to trade in different states will benefit from having a single mechanism whereby issues that arise under the agreement can be resolved without having to, separately, take their chance in different states. In the same way, the US sees the same benefits in not having to have separate rules applied in different courts across the EU. In principle, one can see the advantage of this. Many people hoping to engage in negotiations with Asian countries would recognise the merit of having an agreement that would protect investment and that is the backdrop to this.

Poor investor-state dispute settlement agreements have been put in place over the years and many of them have given rise to legitimate public concern that they did not sufficiently protect the government's right to regulate and that they have been managed in a way that has been too secretive and so on. The committee has probably heard many of these objections. During the negotiations in recent times, Europe has been keen to make sure the design of an investor dispute settlement approach would be robust and meet the public needs that have been expressed in various consultations that have occurred, which has been done. There are two source documents, if members want to inform themselves of the protections that have been put into the investor settlement structure. One is the existing Canadian agreement. There is an investor dispute settlement mechanism in the agreement between Europe and Canada, which sets out clearly the limited circumstances where there is blatant discrimination. It is only in such cases that a dispute can arise and they are set out in the agreement.

The second document is Commissioner Malmström's recent paper in which she set out an additional set of protections that she intends to ensure. They set out the absolute right of governments to regulate; the transparency of the mechanism for any adjudication; the fact that the adjudicators must be qualified to be judges and be selected by the governments, that is, the EU and the US - they are not selected by industry; an appeals mechanism; and a provision to either choose to go to the courts or to the dispute mechanism in either jurisdiction whereby one cannot be played against the other. The dispute mechanism cannot be used to overturn domestic court decisions. Many protections have been included to deal with the concerns that have been raised and that is the backdrop.

In an Irish context, we have conducted an evaluation of the potential impact of the agreement. It depends on what is put into a model and we have only speculated on what might be agreed. To allow us to prepare for the agreement we considered where the threats and opportunities might arise and how we should prepare ourselves for those. We had this done by Copenhagen Economics, which is the most reputable source for such modelling. They assumed a 100% tariff reduction, a 50% non-tariff reduction and so on. They made a series of assumptions on what could be achieved and then they ran a model. It gave information, which members will have had access to, on where the potential gains and threats might be.

Overall, it shows that we could see a gain somewhere in the order of €2 billion from a successful agreement. It represents an increase of around 1.1% in GDP, 4% in investment, 1.5% in real wages and the creation of between 5,000 and 10,000 additional exports-based jobs. These are only models and one can dispute the assumptions upon which they are based, but they are helpful in that they show there are significant opportunities in the dairy sector, for example, but there may be what are termed "defensive interests" in the beef area and so forth. The report suggests there could be significant gains in the pharmaceutical sector but other areas could be a cause for concern.

We are a small, open trading economy and we depend on exporting. I am old enough to remember the Anglo-Irish trade agreement of the 1960s and the opening up of EU markets and how these developments transformed and modernised our economy. We employ twice as many people now as we did when we joined the EU, which is a remarkable statistic. That has occurred because we have been an open trading economy and have taken the opportunities presented to us. That said, I agree with those who argue that we cannot be naive. We must view this as a give and take process and protect our interests. In that context, we are determined to ensure we arm ourselves to deal with the threats and to exploit the opportunities which range across different areas. Regulatory co-operation is one area of opportunity which is about trying to take out unnecessary costs that might stand in the way of trade while not in any way diluting our standards of medical, food and labour protection. It is about removing red tape, essentially. There are also opportunities in areas such as the rules governing customs systems and so forth. Energy is on the agenda and for the first time there are two chapters which clearly indicate Europe's interests. The first is a chapter on the SME sector, with Europe aiming to ensure this sector is at the heart of any agreement and will benefit from it, and the second is on sustainable development, which emphasises that this is about maintaining and increasing the standards of environmental and climate protection, labour protection and so forth. Europe is also determined that there will be no interference with the democratic right of Parliament to make regulatory decisions. These issues are nailed into the preliminary discussion documents.

On displacement, it has been estimated that in the overall European context displacement will amount to about 0.7% and will happen over a number of years. Obviously there will be growing sectors and sectors that decline, but the implementation of an agreement like this would not be expected to be a sudden jolt causing rapid change. None the less, we must be alert to the fact that some sectors will come under pressure and we must be prepared for that. Overall, the displacement levels identified in some studies compare favourably with natural displacement levels in Enterprise Ireland and IDA companies of about 5% per annum. There is always a churn in exporting companies, as opportunities and sectors wax and wane. While we must be alert to potential displacement and be prepared, we cannot stand with our finger in the dam trying to stop change from happening in certain sectors. It is about being ahead of the change and trying to position ourselves to take advantage of the new opportunities that will arise. In the long term, that is where a lot of the dynamism of a US-EU agreement could arise. If we can be part of the growth sectors of the future, like the convergence of medical devices and ICT, for example, the so-called internet of things and so forth, we will benefit hugely. Ireland is well placed in that regard because we have a combination of multi-national and indigenous companies operating here. If we get a wider US-EU setting of standards, we could be at the heart of a standard-setting, innovative marketplace. In the longer term, that is where many of the opportunities will emerge from agreements of this nature.

That gives just an outline.

We need to be wide awake in any negotiations and this is no different. Both sides need to be satisfied at the end of this. It goes to the Council of Ministers so each member state must be satisfied and the European Parliament must be satisfied. There are many checks and balances in this process. The negotiation is only under way and it has been very transparent compared with predecessors. Many more documents have been put out for inspection. Stakeholders' meetings are held regularly in order that people can be a part of it and concerns can be flagged well in advance. Commissioner Malmström has been very sensitive and open in how she handles the negotiations. She has been here and she gives access to Ministers, and parliamentarians, including MEPs and so on. She is determined to get a good agreement with which everyone will be happy at the end.

I thank the Minister for his presentation. Owing to the number of attendees at today's meeting, I ask members to limit their questions to two minutes initially. If time permits, some supplementary questions may be allowed. Before inviting statements from the Co-Chairmen, Deputies Doyle and Kyne, I have two questions. The Minister might respond to the three of us together at the end.

Will the Minister elaborate on the next steps in ISDS following the publication of the concept report, in particular the items the European Commission has indicated will not be subject to change when ISDS negotiations recommence?

Will the Minister highlight the sectors of SMEs in Ireland that are likely to avail of the decreased regulatory complexity and reduction in tariffs to start exporting and increase the volume of their exports?

I invite the Co-Chairman, Deputy Andrew Doyle, the Chairman of the Joint Committee on Agriculture, Food and Marine, to make his opening remarks and ask his questions.

On behalf of the Joint Committee on Agriculture, Food and Marine, I welcome the Minister, Deputy Bruton. As with the other committees, the Joint Committee on Agriculture, Food and Marine has been closely following developments in the ongoing TTIP negotiation process.

Last month we had a briefing from officials from the Department of Agriculture, Food and Marine on the six monthly report. It included an exchange with them on TTIP. In May I attended the meeting the Minister chaired in the European Commission buildings in Dublin where various stakeholders outlined their views, including representatives from the farming organisations, IBEC and the trade unions as well as members of the EU trade negotiators team and the chief American negotiator, Ms Elaine O'Brien.

Much of what was outlined today was outlined that day. Those in the Irish farming sector naturally have some concerns and need reassurances that hormone-treated beef will not flood into the European market and distort it. As the Minister said, the beef sector may need to adopt a defensive position. It may come down to a certain choice of cuts from the US that will enter the EU very selectively.

The other issue is the potential expansion of genetically modified organism products into Europe under TTIP. This is an area we have been following closely. Last week the committee sent a political contribution to the European Commission outlining our views on the issues of GMOs with regard to the autonomy of individual states to reject certain GMOs.

With the abolition of milk quotas at the end of March, TTIP offers the potential for Irish dairy farmers to increase production if the US market opens up. Mindful of the nature and scale of the increase, however, the committee produced a report, entitled Managing Volatility in the Dairy Industry. We advocated a cautious approach in the area of dairy expansion. I believe we said everyone should get better before they get bigger initially, which is a very simple strapline.

We are aware that TTIP is in its early stages and that this is a complex process. We look forward to hearing the Minister's views on the agricultural areas that may be affected.

What does the Minister expect the total impact of TTIP on the beef industry to be? We are aware that we may need to adopt a defensive strategy should US beef enter the EU market.

I ask the Minister to outline the potential impact of TTIP on the dairy industry. We are aware the dairy sector may present opportunities for Irish dairy producers to sell their produce. The Minister spoke about sustainable development and climate change. The Irish production system is probably one of the most efficient in the world for producing food from an environmental perspective. We have one argument to get over with the EU first. Following that, the potential in Ireland should not be constrained simply to achieve a statistical figure on percentage of output.

I invite the Co-Chairman, Deputy Seán Kyne, the Vice Chairman of the Joint Committee on European Union Affairs, to make his opening remarks and ask questions.

I welcome the Minister to these discussions on TTIP. I am also a member of the Joint Committee on Jobs, Enterprise and Innovation. This is a very important cross-sectoral issue, which does much to enhance the parliamentary oversight of these negotiations. The Joint Committee on European Union Affairs has taken a very active role in monitoring the TTIP negotiations. Last year the committee submitted a political contribution to the EU institutions on the topic and the committee recently met stakeholders from the European Commission, the American and Irish Chambers and the Irish Congress of Trade Unions to discuss certain elements of TTIP, in particular the ISDS aspect. At that comprehensive meeting we heard statements from Dr. Tom Healy of the Nevin Economic Research Institute, who stated there is no experience of ISDS in this jurisdiction; that the matter raises complex questions over how the Irish Constitution would operate and possibly in terms of the jurisdiction of Irish courts vis-à-vis any external tribunal or mechanism; and that a note of caution needs to be entered there.

Mr. Mark Redmond from the American Chamber said it did not want a deal for the sake it, that it should not be rushed but it wants a comprehensive deal. However, Mr. Mark O'Mahoney of Chambers Ireland stated it should not be rushed for the sake of passing it because the decision might be regretted for years afterwards. He also said we needed a monitoring system to ensure the provisions benefit small and medium-sized enterprises.

Ms Patricia King of ICTU said that Ireland has a perfectly good judicial system and has democratic mechanisms through the Oireachtas to make rules and regulations, and if anybody has a problem with the rules systems are in place to deal with them. She saw no reason for one particular group to have a supranational mechanism. So there is quite a debate on ISDS, which is of concern to many people.

How can we show that the national parliaments retain the right to regulate under the ISDS arrangements? The Chairman of the Joint Committee on European Union Affairs, Deputy Hannigan, who gives his apologies for his absence, recently attended an interparliamentary meeting in Paris on the European Union's trade policy and on TTIP. At that meeting there seemed to be a lack of enthusiasm for TTIP among certain larger member states. Does this surprise the Minister and can he comment on it? What does he believe are the main concerns of the larger states?

That is comprehensive. On the next steps on ISDS, I believe the schedule is that the Commission will publish proposals on the ISDS in September for the member states to agree. It would only be after that when an exchange would occur with the US. There has been no exchange at this stage with the US. The red-line issues have been published. The Canadian agreement has that general approach. In addition, there is the document that has been set out about the appeal mechanism and so on. In September those principles will be firmed up into hard clauses in a negotiating context. It will give a considerable degree of reassurance to people who have genuinely well-founded concerns if we were to just import some of the ISDS agreements that have occurred elsewhere.

Perhaps I should take the point made by the Co-Chairman, Deputy Seán Kyne, at the same time.

While it is true that Ireland has never had investor-State dispute settlements, ISDSs, there are thousands of such settlements in the European Union, including nine between the United States and member states. While one is right to scrutinise what is occurring, what one must do is to look at the documentation. The reason Ireland has never had such mechanisms is the strength of Article 43 of the Constitution, as the protection of property rights in the Constitution would trump any ISDS in terms of the robustness of the defence it offers to investors. Moreover, it has always been recognised as such, whereas obviously we are negotiating at European level on some of the ISDSs. Since the passage of the Lisbon treaty, the European Union has been the negotiator on trade issues. Consequently, the agreement it puts in place must accommodate all member states, including those which have such ISDS mechanisms. However, the aim will be to examine the quality of the ISDS and the extremely restrictive areas to which it will apply.

On the sectors that will benefit, all sorts will do so. To revert to Deputy Marcella Corcoran Kennedy's question, pharmaceuticals are very significant, as are cheeses and nutritional products. Public procurement is an issue, in that many Enterprise Ireland-backed Irish companies are focused on the United States in developing software services, but they are blocked out of public procurement. This will be a significant opportunity for them. There are many other sectors listed, of which medical devices is another in which clearly there will be major benefits in a common approach to regulation. As for dairy and milk powders, the United States does not recognise or accept the standards we apply and such powders are effectively blocked from entry to the market. Consequently, there are many barriers and one can identify sectors that will benefit.

Hormone-treated beef simply cannot come in, about which I can be absolutely categorical. Choice of cuts certainly is an issue, in respect of which I refer to the Canadian model. We will seek a whole-carcass phased tariff reduction and there will be a quota. It will be for hormone-free beef.

There cannot be expansion of genetically modified organisms, GMOs, under the agreement. The European rules for GMOs are the ones that will apply and there is no change in them.

As for the impact on the beef and dairy sectors, if it comes down to quotas, obviously it will be related to the size of quotas and so on. There are estimates to hand. The beef sector is unique in that we have both offensive and defensive interests. In the long term any significant increase in beef imports to the European Union could have adverse effects on the Irish industry. Ireland is the largest net exporter of beef to European Union countries and our place in these markets could be threatened by a large volume of cheap imports. This does not look likely, as US prices are at an historic high of €4.90 per kilo, well above European Union prices. However, this does mean that we have legitimate concerns about the size of the quota that may be offered to the United States in terms of the absorption capacity of the European Union market. Ireland has proposed to the Commission which negotiates the agreements that these sensitivities be reflected in the size, composition and administration of any quota. I can tell members that each time I or anyone else goes, Ministers absolutely insist on this. The other side, however, is that we are seeking a significant quota for Irish beef into the US market. As members are aware, following the reopening of the market, Irish beef exports this year will be covered by a 65,000 tonne quota for other countries on a first come, first served basis.

This quota was only 85% filled last year, mainly by countries in Central America. There are, therefore, opportunities and threats.

In the dairy sector there are only opportunities. This is one of the areas in which we hope to be able to get in behind the regulatory barriers. There are significant tariffs, but of far more significance are the barriers, some of which I have described, namely, the fact that the United States simply does not recognise the standards we apply to our products which, as a result, are not approved for sale. If we can negotiate a reduction in this regard, we see market opportunities for branded packaged butter such as Kerrygold, cheese, powdered and sports products, prepared consumer foods and fish products. These could all benefit from trade liberalisation. There are significant opportunities across the sector. I take the point made by the Co-Chairman, Deputy Andrew Doyle, that because Irish beef cows are grass fed, we are in a much better position in the context of our carbon footprint. That is something which we will obviously seek to have recognised.

On Deputy Seán Kyne's point, some member states have very specific concerns. The French term in this regard is "l'exception culturelle". It is explicit in the mandate that the authorities in France will seek to maintain the cultural diversity there. Some countries will be sceptical about different sectors or issues. It is, however, the investor dispute issue which has garnered the greatest attention. There was not as much focus on this issue when the agreement with Canada was being negotiated when, by and large, the protections nailed in were accepted. However, there is greater suspicion or concern on this occasion. The European Union's negotiators are responding and seeking to address these concerns. They met both the Austrians and Germans who had particular concerns and have helped to shape the proposals Commissioner Malmström has brought forward. There has been very open engagement and the concerns emerging in different member states are being reflected in the mandate and the negotiating position the European Union is adopting. Like Ireland, all other member states are trying to ensure their concerns will be taken into account.

We will now take questions from members. I call Deputy Peadar Tóibín who is a member of the Joint Committee on Jobs, Enterprise and Innovation.

Gabhaim buíochas leis an Aire as ucht a chur i láthair. I welcome the process in which we are involved because the issue before us is an extremely important one which must be dealt with. I welcome this new innovation of cross-committee investigation of matters of this nature. There is no doubt that international trade is good, but the TTIP is a very invasive treaty when it comes to sovereignty and democracy. There is a cost benefit to all international trade and many are of the view that as a result of treaties of this nature, costs fall on consumers and workers, while many of the benefits accrue to many of the larger companies.

Does the Minister accept that the ISDS model was not necessary in Ireland previously because of the existence of strong property rights in the Constitution? Does he accept that the statutes of European member states are sufficiently strong that there is no actual need for an ISDS model? The Centre for Economic Policy Research has found that 1.3 million jobs in Europe will be displaced as a result of the actual treaty. The Austrian Foundation for Development Research points out that the Commission has not made provision for any of the costs arising from such a large number of jobs being lost. What is the Minister's view on how these costs should be dealt with? Are they the responsibility of nation states or does the Commission have a role to play?

We are regularly informed about the opportunity for SMEs to benefit from this process, particularly from a reduction in levels of bureaucracy and red tape. Outside these two, what will be the tangible benefits for SMEs as a result of the treaty?

The Minister mentioned public services. Will he detail the chapters in the treaty in which public services are discussed? Will he also detail the definition of "public services" because I understand it to be narrow and that it has no commercial impact whatsoever? Previously, the Commission has explicitly identified certain sectors which shall not be privatised or come under pressure such as water provision. Would it not be better for the Commission to identify explicitly these public services and not leave it to a definition that could be understood in a different manner?

The evidence, in so far as we have it, does not bear out what the Deputy says. It does not fall on consumers. Consumers are among the beneficiaries because the agreement will result in lower prices. If tariffs and non-tariff barriers are taken out, there will be lower prices on both sides because they both are forms of increasing prices and, therefore, consumers will benefit.

With regard to wages, the model run for Ireland showed a 1.5% increase in wages. Again, the model suggests there will be benefits for our workers from the agreement. The fact that we can conduct more trade in dairy products, medical devices and pharmaceuticals means more earnings for companies, but it also benefits their workers. There will not be exclusivity whereby because we have more dairy exports and this will favour big businesses over producers. If we get our beef into the United States, as we have just done, and can sell premium cuts, everyone will benefit in the marketplace. Companies and their workers will do better and farmers will earn a higher premium if they can get quality products into strong markets such as the United States. That is not a valid criticism.

The Deputy cannot say it is an invasive treaty because nothing has been agreed to. This is about entering negotiations to reduce tariffs, bring down tariff barriers and provide for investor disputes. Nothing is agreed to at this stage. Some argue that there should not be an ISDS in the agreement. It is included in the Canadian agreement and nobody argued against it at the time. However, it has become an argument and we need to face up to it. There is some validity to the need to protect ourselves in an investor dispute. The Deputy's presumption is that this is bad, but we are big traders with the United States. Bringing down barriers in the United States is good for countries such as ours which trades with it and has investment with it. Therefore, I do not accept the assumption in the Deputy's question. The mandate which was agreed to before the negotiations started states: "Services supplied in the exercise of governmental authorities defined by Article 1.3 of GATT shall be excluded from these negotiations". Both chief negotiators confirmed after the seventh round that there would be no commitments on public services. This means that the TTIP will have no implications for health, education, social services and public utilities such as water provision. There is, therefore, a double lock. We excluded it from the negotiations mandate and both sides have stated they will not negotiate in this territory. It is excluded.

Turning to the issue of whether sectors will come under pressure, that could happen. In the Irish case, it does not look like there will be sectors that will be greatly exposed, although it is possible that some business services will face increasing competition and there will be threats and opportunities for both sides in the beef industry. The estimate of the impact is seven in every 1,000 over a ten-year period as it is rolled out. That will not be a huge impact compared to 5% of turnover in export-oriented companies every year. Fortunately or unfortunately, markets change and companies rise and fall.

It is not a big source of new uncertainty, whereas there is a real opportunity to grow the economy. Clearly we must be conscious of where the opportunities are and we must brace ourselves to deal with them.

On the question of tangible benefits for SMEs, they are throughout all sectors. Farmers are producers of dairy products and they would stand to gain. There are small players in the milk powder market and in software. If we gain access to public procurement, the beneficiaries will be mostly small Irish companies. The growth of services in the US has been significant. The pace of growth of Irish companies in the US is huge, and our services companies are growing more in the US than anywhere else. Our service companies are not growing anything like as fast in Asia as in the US. All the growth is coming from SMEs, small Irish owned internationally trading services companies. There are areas that will open up and if we get a good deal we will get tangible benefits. We need to push to get those opportunities.

The US is protectionist in terms of public procurement. It will be difficult to negotiate public procurement contracts. There will be tough negotiations.

Does Deputy Tóibín have a supplementary question?

All government spending on goods would come under public procurement. My understanding of the definition of public services is a service where there is no commercial element to it. However, when one sees public services delivered in this State, be it health, education or all the other public services, obviously there is a commercial element to it. It is the narrowness of the definition that worries us. The Minister mentioned that 0.7% is a low figure. In Ireland that would mean the displacement of about 13,000 jobs. I do not know of any plan at present to deal with that level of displacement. Is there a plan from the Government side in regard to that? There is a level of convergence currently within and outside the treaty. We have seen the convergence outside the treaty start to ramp up, because the treaty is the political yardstick for development. Things such as cleaning meat with lactic acid, which was not allowed previously, will be allowed by the European side.

The importation of tar sands oil from Canada has rocketed. What does convergence mean in respect of these particular issues? We have regulatory standards that are higher than the United States and it will mean that there will be a reduction in our standards whether that will be workers' rights or environmental protection. How does the Minister envisage that our negotiators can fight against that?

I have dealt with the public service, it is not on the agenda. It is excluded from the mandate and the negotiators do not intend to open it up. That is as categorical as we can get.

We spend most of our time planning how we will deal with potential displacement. Some 5% of jobs created by Enterprise Ireland and IDA are displaced every year. Many of the Enterprise Ireland programmes are about introducing lean production processes; encouraging companies to involve themselves in innovation; improving the management and leadership capability of companies; getting them to look at markets where they could expand should they be under pressure in some other market. Enterprise Ireland spends a great deal of time dealing with its existing base of companies and looking at how they can better position themselves either to deal with a threat or an opportunity. The same is true increasingly now of the IDA companies. IDA invests increasingly in transformation agendas, which are very similar to those sort of EI programmes, looking at how to win new mandates and protect jobs in the areas they are in. We are very actively engaged and have a great many proven policy instruments to deal with displacement should it arise from this source.

I invite members to read the chapters on regulatory co-operation. I probably do not have time to quote them for members. They absolutely set out categorically that there will be no dilution in the standards on either side. The US is as adamant as the EU that will be no reductions in its standards.

It is explicit in the text that there will be no undermining of the democratic mandate and right of parliaments to set regulations. What is being looked at is areas of good practice so that if Europe is introducing a new regulation, information on its impact will be shared in order that people can anticipate and prepare for the new standards expected. For example, if the fat content of an item is tested in Ireland, there can be mutual acceptance across Europe of the accuracy of that measure of fat content such that the item does not have to be re-tested elsewhere to obtain the same result. This is the type of unnecessary work we are seeking to remove. That is very significant. Most of the things that are barriers to trade may have been used as protectionism but many of them are about having to replicate costly proofs of what a product is doing rather than about standards. This is where the regulatory convergence will occur. These regulations come under the heading of mutual recognitions. A good example would be an architect and a mechanism by which the qualification on both sides can be recognised. This is the type of issue on which convergence is sought, not to say that an architect can be just a draftsman, thereby undermining a standard.

I invite Deputies Eamon Ó Cuív, Martin Ferris and Thomas Pringle, who are members of the Joint Committee on Agriculture, Food and the Marine, to ask their questions.

I welcome the Minister. This is a very useful meeting. As a member of the Committee on Agriculture, Food and the Marine, I propose to focus on agricultural issues. First, in the context of these discussions and, in particular, the US presidential election, when will these negotiations be brought to a conclusion? I got the impression from the Minister that he and the European Union agree that the overall concept is a very good idea. The Minister reiterated many times all the positives he sees arising out of this agreement. This leads to the following very obvious question. When it comes to the final meeting of Ministers on these negotiations, how will the decision be made and will it be made by qualified majority voting? In other words, will the interests of the overall supersede the interests of particular member states on especially sensitive issues?

In regard to food, there are 130,000 farmers in Ireland and multiples of that number of people involved in the food industry here. The biggest issue relating to food is that of standards in GMO and hormone-free beef, as discussed earlier. While we might sell quality cuts to America, so too might another beef producer if the price is high. If, however, the price of beef collapses and the other producer has had a good production season, will there be restrictions on that producer putting vast quantities of beef into Europe, thereby undermining our market because 95% of our beef is sold on the European market?

How can we be sure that, as we near the end line, the agricultural interests in particular of this country will not be sold out in the interests of getting a big deal?

I thank the Minister and his officials for the presentation. In response to a question from Deputy Tóibín, the Minister said that this agreement, if implemented, will benefit the consumer by making things cheaper.

How will this affect the Irish producer in the agricultural sector in particular? How will it affect the cost of producing beef competitively? Historically, it has been far easier and cheaper for US producers. How will this affect our market?

I refer to EU standards of traceability on the use of hormone treatment for cattle which are very stringent. How will US standards compare?

I welcome the opportunity for this engagement with the Minister. My questions are not directly to do with agriculture. My first question is about freedom of information requests and the discovery made by the Corporate Europe Observatory that 93% of the negotiations at the early stages were between corporate bodies and lobbyists on each side of the negotiations and that the Parliament and the Council were excluded from that early stage. I ask the Minister to comment.

A question related to agriculture is about job displacement. The Copenhagen report does not deal with job displacement in the Irish economy. The Minister previously mentioned job displacement when speaking about Enterprise Ireland and IDA Ireland. What about job displacement in the agricultural sector and jobs in rural Ireland where it will be very difficult for former workers to retrain and relocate in order to gain employment? What does the Minister intend to do in this regard?

What opportunity could be included in the ISDS for a future Irish Government to regulate wages by means of the Low Pay Commission? As the Minister said, most things, including governmental actions, have been excluded from ISDS, therefore, it must be asked what is the need for it.

In reply to Deputy Ó Cuív's points, the expectation is that a framework could be agreed by the end of the year but the negotiations would continue. When this process started Mike Forman talked about it being done on a single tank of gas. That hope has not been realised. If the US Congress grants this negotiation mandate that President Obama is seeking - it is through the Senate but not yet through the Congress - it will accelerate matters. The decision will be by unanimity not by qualified majority voting but it will also require a vote in the Oireachtas, in the European Parliament and in the parliament of every other member state. There will be considerable protections.

There is no question of flooding the market in a good season because restrictions on beef, for example, will be by way of quota not free access. As Co-Chairman, Deputy Andrew Doyle said, there will be issues around cuts and whole carcasses and not just issues about expensive cuts. The Deputy raises the issue of whether some sectors will gain more than the agricultural sector. We are probably in a better position now in that the dairy sector is a significant gainer and there are opportunities as well as threats in respect of the beef sector. I think we are in a position to negotiate an agreement which will be positive for the agricultural sector. It is not a question of trading opportunities for agriculture against opportunities for the non-agricultural sectors. I think we can do a good deal in agriculture that will bring benefits to Ireland. I refer to our cultural connections with the US through the diaspora and the benefits these bring for marketing.

All of that gives us a real opportunity in the food area and I am sure that Bord Bia will be out of the traps like a shot as those opportunities open up.

Deputy Ferris asked whether benefits to consumers would mean that producers would lose out but that is not the way it works when one is taking down tariff and non-tariff barriers. In the case of tariffs, if anyone loses out it is the Government, which loses customs revenue. There is an opportunity for both producers and consumers in that regard. The Deputy must forgive me - I am an economist by trade - but generally any reduction would be shared between the producers and consumers, depending on the conditions in the market. It will be shared out in some way. In the case of non-tariff barriers, no-one benefits as such but rather a cost is being incurred through the replication of standards or through keeping goods or services out, as is the case with Irish dairy produce. A lot of our dairy produce is simply kept out of the market by non-trade barriers. Consumers get the benefit of new products coming in at better and more competitive prices because the tariffs and non-tariff costs are not included. At the moment Irish producers must get over the non-tariff barriers and have to pay the equivalent of 20% to do so, as well as the equivalent of 3% in tariffs. They are paying almost 25% to get over the barriers and into the market. That 25% is available to be shared, obviously, between the producer and the consumer and that is why both can gain in this situation.

In the context of non-hormone treated beef, obviously there will have to be pretty tight and insistent demands as to how the US replicates the standards of traceability that we have in Europe. That is an issue which is being very closely watched to make sure that in the case of beef that is not hormone treated, the US must be able to replicate the standards of traceability. The US will have to satisfy Europe that it has delivered on that. The importing country must be satisfied that traceability standards are being met.

I am not familiar with the lobbyist's report to which the Deputy referred. I was around for the negotiation of the Canadian agreement and some of the agreement with Japan but the process has never been more open and transparent than now. The documents are laid, stakeholders meetings take place after each round, there is interaction with Parliament on the negotiations and there are very few restricted documents, even though these are high-stakes negotiations. It is a very open process.

On the issue of regional displacement, one of the initiatives I am taking this year is to seek to introduce the concept of a regional enterprise strategy for every region. We are trying to engage with the various agencies, business leaders and other players in each region to get them involved in shaping regional strategies. I am very keen that we develop clusters of strength in every region to that they can look at an agreement like this and see the opportunities in it. There will be real opportunities for rural communities in this agreement. The US is a good market for rural and regional Ireland to target. We must have a successful regional enterprise strategy that develops the aforementioned clusters, of which there are very few embedded here at present. We have co-location but we need to do more to embed them. Developments like the technology centre for the dairy sector, which brings together the best minds from academia and industry, will build businesses in rural Ireland that will be capable of competing globally.

The documents pertaining to the Canadian agreement are instructive. Under that agreement, a breach of the "fair and equitable treatment obligation" can only arise when there is a denial of justice in criminal, civil or administrative proceedings; a fundamental breach of due process, including a fundamental breach of transparency in judicial and administrative proceedings; manifest arbitrariness; targeted discrimination on manifestly wrongful grounds, such as gender, race or religious belief; or abusive treatment of investors, such as coercion, duress and harassment.

This is not an easy route, with people just being able to say they want to take a case. They must prove, not only that they suffered damage by the action, but that it was done in a wholly discriminatory manner. Tough requirements are being insisted upon by Europe. Even in the Canadian agreement the requirements were tough. Obviously, this will go beyond that, with many other protections, such as the right of government to regulate, that will be embedded in any agreement that may emerge from the US.

Why are these ISDSs there? We could understand better why they figure if we looked at an example. Take, for instance, a situation where one is negotiating an agreement with Asia, where there are significant concerns about the safety of intellectual property and whether one could get redress if one was ripped off. That is the backdrop and one reason there might be a need for an investor-state dispute settlement. The ISDS would give the investor some certainty that he or she would not be ripped off in an arbitrary manner. Another situation might be where an Irish company is going into the United States. The United States does not enshrine trade agreements into the domestic law of each of the 50 states, so having to take a suit in different states would be a high cost barrier for a small country to consider. There is an advantage to being able to say there is an arbitration procedure in place instead. However, we must satisfy ourselves that this arbitration procedure is fair, equitable and transparent. That is the reason it was included in the first place. We must satisfy ourselves that what is negotiated at the end of the day is good.

The Minister said there would be a quota, but how big would the quota be relative to Irish production?

Obviously that has to be negotiated. The assumption that was used by the Copenhagen report was 75,000 tonnes above the existing quota.

What is the production of Irish beef?

It is 500,000 tonnes.

That is quite significant.

We are looking for opportunities to trade as well. It is a two-way process. There will be quotas in both directions. Like any other trading, there are opportunities also.

We should note that currently the world's highest price for beef is in Britain.

I am not an expert in that area, but I understand the US herd is in somewhat of a retreat, so there is reasonable optimism in regard to US prices remaining high.

I want to move on to other questions. I thank the Minister and now invite representatives of the Joint Committee on European Union Affairs to put their questions to the Minister. I will call the members in the order they have indicated their interest in putting questions.

In regard to the removal of administrative barriers and tariffs, what are the possibilities of the reintroduction by a circuitous route of further administrative barriers or red tape? Is that likely in the context of the negotiations and has provision been made to counter that. In regard to a threat to internationally provided services in this jurisdiction, has the impact of the TTIP been measured in the context of the possibility of a threat to those services or possible consequent job losses?

We were informed that there would be no privatisation of public services, but who defines what is a public service?

For instance, one could have a different interpretation of public services on the US, Canadian or European sides or whatever the case may be. Is this aspect taken into account?

I wish to inquire about the more important carbon reduction proposals. They have been adopted by the European Union, though not necessarily adopted by all participating countries in TTIP to the same extent. I want to know to what extent will carbon reduction impact on Europe, and particularly in this jurisdiction? Will it be compensated for in the context of TTIP? Has compensation been provided for already? Is it likely to be provided for?

The next issue is quotas in the food industry and in the beef and dairy industries. Will quotas be the only controlling factor? Will there be a degree of regulation that might identify some of the issues that might impact unnecessarily against us?

The last issue I wish to raise is supply and demand. If supply and demand becomes the only arbiter of what prevails, in the course of TTIP, then how do we address this?

I invite Deputy Eric Byrne to commence.

I pass in preference to my colleague here.

The first question was whether barriers can be circumvented by other measures. Clearly, that is what the idea of regulatory co-operation is about, if there are other measures. I think we would all insist that Governments should have the freedom to introduce regulations in the interests of public safety or that they can introduce them but there would be some sharing of that information. Therefore, it would have to be done explicitly by a Government in the context of a regulatory initiative. I mean it cannot be done behind the door. The idea behind regulatory co-operation is that that would be in some way flagged in advance. We are not taking away the rights of Government to introduce regulations. Clearly, if some regulations were purely discriminatory against a product, or if one was not applying the regulation to one's own producers but was applying it to a foreign producer, then one would be in breach of the agreement. Once this is done across the board, and domestic producers have to do the same thing, then a Government is entitled to do likewise and I think most members would agree with that. We want to introduce our tobacco rules and so on.

In terms of a possible threat, there was analysis of the threat. I do not want to do an injustice to the document. Copenhagen Economics did have a look at it. I think, to a large degree, it was thrown up by the fact that, as it saw it, people moved to other sectors. I mean if it saw an opportunity arise in medical devices and certain areas then there would be some pressure through wage increases and one would see some loss of competitiveness in other service sectors. One might see a decline in that way. It was in a relatively benign sort of environment where it was assumed there was a fixed labour pool, which of course there is not when one has a 10% rate of unemployment and a very open economy like ours. The threat is the same but could present a new source of competitive pressure on sectors. Our trading sectors deal with competitive pressures every day of the week. We will offer the same sort of service, that I outlined to Deputy Tóibín earlier, in terms of supports to companies.

The definition of public service comes from the General Agreement on Trade in Services or GATS which states:

"services" includes any service in any sector except services supplied in the exercise of governmental authority;

"a service supplied in the exercise of governmental authority" means any service which is supplied neither on a commercial basis, nor in competition with one or more service suppliers.

The EU's mandate specifically states that services supplied in the exercise of governmental authority as defined by Article I.3 of GATS shall be excluded from these negotiations.

These provisions apply in commonality; they are not left to each member state to decide. As I said, the negotiators have indicated public services will not be on the agenda.

On the issue of carbon reduction measures, if the European Union introduces measures for other reasons, they will apply with equal force to any producer. It is down to the European Union to regulate this and such measures will not be undermined by the agreement with the United States. In other words, the European Union cannot be told to withdraw carbon measures it considers to be in the global public interest. Even if the United States does not have the same carbon reduction commitments as the European Union, a level playing pitch is achieved by how the European Union applies its special measures to products. That issue does not arise in the context of the agreement. If the European Union has super-protection in place for any particular reason, it will apply these rules uniformly across all sectors. It will not just be a question of quotas. There will also be the issue of the equivalence of food standards, as referred to by Deputy Martin Ferris, and the question of how we replicate traceability. US producers of non-hormone beef must be able to demonstrate they have met the same standards on which we insist for European producers. Both sides will have to agree to a framework within which this can be done.

I am not sure I fully understood Deputy Bernard J. Durkan's question about whether matters would be left to supply and demand. If the non-tariff barriers are brought down, it will be up to companies to take the opportunities which present from this, but there will be an effort to inform SMEs of what these opportunities are. Bord Bia and Enterprise Ireland will be working to help people to take advantage of such a change.

My question was related to the degree to which supply and demand in some sectors in the past had not always worked out so well. There might be peaks and valleys, as the Minister referred to, and the issue concerns the extent to which protection is provided against this. There will be a competitive advantage for countries in both the East and the West which do not contribute as greatly as the European Union to carbon reduction efforts. To what extent is this likely to become a contentious issue in the course of the negotiations?

The Minister referred to investor-state dispute mechanisms and the limited areas to which they might be applied. Is it foreseen, notwithstanding Ireland's amendment of its Constitution to accommodate membership of the European Union and the European Union's own regulations, that a major international player could sue a government after discovering something that had not been anticipated or was provided for in the agreement or that such player did not anticipate when signing up to the project? This possibility was put to us during discussions at the Joint Committee on European Union Affairs.

The issue of carbon rules and what responsibilities different countries take on in containing climate change and carbon build-up in the atmosphere will not be discussed in the negotiations. That is an issue for discussion at the United Nations, not the in negotiations on the trade agreement.

An international player could only use an ISDS in the limited circumstances I outlined, as per what was proposed in the Canadian agreement. The first circumstance is that such a player would have to have suffered damage. Second, that damage would have to have been discriminatory and in breach of fair and equitable treatment obligations. In other words, the party would have to show both that it had suffered damage and, second, there had been a fundamental breach of due process or there was evidence of targeted discrimination.

The party would have to demonstrate those two phenomena before it could even initiate a case. If it has initiated a case and is successful, it cannot force the Government to change its regulations, but it could get compensation. That is the way that system works.

I thank the Minister. I invite questions from the other members of the joint committees in attendance. I will take them in the order in which the members have indicated their wish to contribute, beginning with Deputy John Lyons, followed by Senator Hildegarde Naughton and Senator Mary Ann O'Brien.

The proposal, as it stands, has many merits. I wish to refer to the potential impact on some of the poorest countries in the world, such as those in Africa and Asia. There are a number of pieces of research, including the review by the EU Directorate-General for External Policies on the potential impacts of TTIP, which states it will have a negative impact on some countries outside the area it covers. Numerous other studies predict there may be some losses, some serious, for some of the world's poorest countries owing to such a wide trade agreement between both sides of the Atlantic. Bangladesh and Pakistan have massive clothing industries. This is just one concrete example.

I am very conscious that most of the debate today has rightly focused on many of effects the agreement may have on Ireland per se but, given our stance on supporting the developing countries and how our Department of Foreign Affairs and Trade supports the developing countries, I have two questions, in particular. Is TTIP, as it stands, undermining the EU's own commitment to policy coherence for development? Does it stand up to the EU's own policy on coherence for development? Given that the publication of the sustainability impact assessment on TTIP has been delayed until the end of 2015, would it not be safe to say not enough has been done on the impact of TTIP on countries beyond the areas covered on both sides of the Atlantic, particularly the world's poorest countries?

Along with other groups and agencies, such as the Galway chamber, I am very much in favour of TTIP. As has been highlighted here by contributors, there are some understandable concerns around the ISDS mechanism. Parties to the treaty all operate transparent and independent legal systems. I am just not convinced on allowing investors to take legal action in the domestic courts. I would like to know the Minister's views on incorporating the treaty into our domestic legislation. Currently, there are very good trade relations between the EU and US. Everyone would wish that to continue. It is happening currently without the ISDS mechanism, and we can improve those relations by way of the proposed treaty and still not have a system whereby investors can, over the heads of states, take legal action internationally.

As with any treaty, there are often unforeseen consequences. I take the point that we are currently in negotiations. This is a critical time in which to ensure that if an ISDS provision is put in place, the system will be drafted in a watertight fashion. That is a clear message. I acknowledge that the Minister has outlined it but it is important that we have safeguards and ensure the arrangement is of benefit to Ireland also.

I thank the Minister for his presentation. I am one of the excited ones with an ulterior motive because I have been exporting to the United States, including all 50 states, for 12 years. There have been ups and downs and some great success. Some 30% of our revenue is now coming from the United States. There are many learnings; I could write a book and have many scars to show, as one can see from my appearance. We have dealt with Starbucks, United Airlines and many multiples. The chocolates were quite easy although the tariffs are quite onerous. There is a level playing field between the Belgians, French and the rest of us.

I have a few questions for the Minister about the dairy sector. After three years of red tape and bureaucracy, we have just got our dairy desserts into the United States, although into bonded warehouses because they are going onto airlines. I am excited for my workforce because I can see an easing of opportunities. I wonder what the timeline is for TTIP?

Does the Minister have plans to increase the numbers and knowledge bank of his Enterprise Ireland workforce to meaningfully put people in place in the United States? It is an absolute monster to take on for an SME, so we really need knowledge on the ground, as well as chiefs and Indians all over the place. It is never too early to start laying the turf.

As regards the beef sector, I see it as an opportunity between orange and green. With grass-fed livestock we can punch above our weight and maybe even obtain a premium. As the Americans evolve they are crazy about grass-fed beef products, which they lack to some extent. I would like to hear more from the Minister about our grass-fed dairy sector, including the exact value-added opportunities now that quotas have gone. How quickly can our farmers have a vision to look forward to?

Some 80% of foodstocks in the US contain GMOs, but I am not a fan of them. I do not want our children eating genetically modified products. The Minister has given us comfort on GMOs but what does he think about GMO foodstuffs coming in here?

To go back to Deputy Lyons' question, quite a degree of attention has been paid to this issue. Our own study suggests that there would be positive spill-over effects on third countries. The Commission has examined that and believes that overall it will have positive gains in increased demand for raw materials, components and machinery. The impact on third countries that has come out of all these models has been positive rather than negative. I am sure one could find some country that is positioned in such a way, but I do not pretend to be so knowledgeable. However, there is also a belief not only that the US will import more from third countries, but also that the development of common standards will make it easier for third countries to export to the EU.

This will be a positive move in that countries can adopt standards. In the absence of the WTO being able to negotiate these, it gives a multilateral ability to target markets which have agreed common standards among themselves. It makes it easier for developing third countries to deal with a single set of specifications that apply in a very large market and thus gives them advantages.

To be fair to Europe, the US trade agreement is not the only instrument to try to promote development in countries. They have their own direct trade agreements with poorer countries to encourage and support such trade. Through the various WTO agreements, the EU will invest in trade facilitations, including infrastructural capability within those countries. Europe has a reasonable suite of measures in that respect.

Senator Naughton asked why there is an investor-to-state dispute settlement, or ISDS, clause. There was an ISDS clause in the Canadian agreement and no one has found any great fault with it. Nine European countries already have ISDS clauses with the US. The Commission is negotiating for all 28 member states, so it has to accommodate the environment for all of them. Why would we not seek to incorporate this? We would not want to bring US law into Irish law and have US courts interpreting our legislation. Therefore I do not think we would want to take that step.

The best approach is where we try to produce as good an ISDS as possible. Obviously, we are conscious that if we do not like what is agreed, it is one of the issues people will be watching very closely but the Commission is investing a lot of time and effort in this. The appeal mechanisms, the way arbitrators are selected, the rules that will apply to the arbitration process, the grounds on which a case can be taken, the right of appeal and the fact that one must choose one or the other and cannot take a shot at the ISDS and then go back to the courts or take a shot in the courts and having failed in the domestic courts, switch to the ISDS are designed to give people confidence but we must see the outcome.

I agree with Senator Mary Ann O'Brien in respect of 30% of revenue coming from the US. Much of the service growth has been in the US market. Over 30% of Enterprise Ireland service growth is from the US market so many SMEs like that of the Senator would be exploiting the US market and would stand to gain, particularly in areas like public procurement in the case of services.

The hope is that there will be a framework agreement by the end of the year. There is the ambition in the US to agree it within President Obama's term. It remains to be seen whether that can be done. Obviously, the benefits would roll out after the agreement was concluded. We are beefing up Enterprise Ireland. We provided 20 additional staff in its overseas offices, some of whom went to the US. Austin in Texas was a new Enterprise Ireland opening. As I am sure the members will agree, we have fantastic people in these offices. Both Enterprise Ireland and IDA people overseas are really great representatives of the country. They certainly don the Irish jersey every time they go out. It is a pleasure to work with them and we would encourage companies to use those opportunities.

I cannot really add to what I have already said on GMO. The European rules will not change and it is not on the table in terms of negotiation with the US.

I thank the Minister for coming before us and giving us an up-to-date briefing. Could he continue to do this because we like to keep abreast of the ongoing negotiations as we might not always be able to pick up any information?

Will there be a problem with shelf companies that may exist in either the US or Europe that import products from outside the US to take advantage of the trade agreements? How will we monitor standards used outside the EU or US to produce products?

Europe has a strong history of red tape. I can see going to the US being a real advantage to European companies because red tape in the US is not as strong as it is here. How does the Minister see that benefiting trade between us and the US? I saw an example of red tape this morning in a small school. It was a primary school event for entrepreneurs and innovators. A teacher told me that the amount of red tape they had to follow was unreasonable. If it is like this for six, seven and eight-year-olds, what is like for the rest of us? It is something that must dealt with because it is a serious problem.

Do we require a referendum to ratify this? Does it need to be put before the people or can we do it through the legislative process? The Minister spoke about how great it is. What is the one thing he is worried about? There must be something in the back of his mind that gives him a nagging feeling.

I am sorry, I missed a little of the debate because I had to leave for a vote. The Minister may have covered part of this question already. It relates to energy. Will there be an effort to get a level playing field in energy? In Britain today I understand they have given permission for shale fracking in Lancashire. This may be the start of fracking to obtain energy from under the ground. In the United States this has changed the source and cost of energy dramatically. Some ten or 15 years ago everything was imported from the Middle East. Now, they are able to develop much of their own energy. Is there a possibility that this could be regarded as unfair competition? Will there be any effort to try to balance that between the two?

The second question relates to the next stage. Does South America come into it at some point? Will we find ourselves in a situation where Chile, Argentina and Brazil are also going to be involved in an added way? Has that even been thought of at this stage?

Co-Chairman Deputy Marcella Corcoran Kennedy

Deputy Tóibín, you indicated that you had another supplementary question.

Yes, if that is possible.

Co-Chairman Deputy Marcella Corcoran Kennedy

That is fine as long as it is not something that has already been addressed and as long as it is a question.

It relates to some points the Minister brought up.

Co-Chairman Deputy Marcella Corcoran Kennedy

You have one minute.

The Minister referred to the EU-Canada Trade Agreement, CETA. He mentioned the fact that there has not been criticism of the investor-state dispute settlement. There is an example whereby the European Union created a mechanism to reduce carbon within oil and oil-type products. The mechanism was used in an effort to improve the environmental opportunities for European countries. Yet, in those negotiations Canada put fierce pressure on the European Union with regard to the use of tar sands oil, which has levels of carbon dioxide approximately 23% higher than ordinary oil. The European Union then changed its regulation with regard to transportation fuels. Is that not an example of how these types of agreements actually change policy within jurisdictions?

Deputy Tony Lawlor asked about shelf companies. They are explicitly excluded from the ISDS provisions. Deputy Lawlor referred more to rules of origin. There are explicit requirements to establish rules of origin. These are in place to protect against what he was referring to. They have to be policed and that is a challenge.

Reference was made to Europe and red tape. I believe it depends on the sectors. Committee members might be surprised to learn that in some sectors Europe is good in this regard. In medical devices, for example, products get a far faster route to market in Europe than in the United States. This has been an area of competitive advantage. It is not all one-way traffic in this regard.

I have never seen companies prevented from moving to the United States. There is not much to stop them. European companies employ more than 4 million people in the United States already. There are no barriers to European companies going there. I am unsure whether red tape is what is sucking companies out. It is an internal issue for Europe. There has been a significant effort at European level to start to rationalise red tape and there are initiatives to do that. It will not require a referendum, but it will require the approval of the Houses. There would have to be a vote in the Oireachtas.

Delay is a concern. We had hoped to get it done during this presidential term. That is one concern. The only concern is to ensure we prepare ourselves to take advantage of the opportunities and protect ourselves against any threats. Any deal of this nature is a deal and there are winners and losers.

We have to take advantage of the opportunities and prepare for the threats. That is not a worry because our agencies are prepared, but I have found that not many companies have engaged with the negotiations. At this stage there is not much engagement. I would prefer to see more from sectors in which opportunities arise in order that they will play a bigger part in shaping the agenda.

On the question about energy, the agreement is not about imposing standards on countries. The negotiations are working towards mutual recognition and the removal of non-trade barriers, but the agreement will not dictate the standards that should apply to fracking or any other activity. It will include an energy chapter and given that restrictions are in place on US exports, clearly that will be an area in which the European Union could access cheaper sources of energy. The energy chapter will be approached in the same way as other chapters.

There is no doubt that the European Union's ambition is to have more free trade agreements. The agreement with South Korea has resulted in significant growth of 35% in European trade with that country, three times the growth rate in trade with comparable markets in that region. The Commission is of the view that the agreements are proving themselves in generating activity. Agreements with South American countries are also on the list for negotiation. An agreement with India could be reignited. The European Union is negotiating an investment treaty with China, although it is not a full trade agreement. There are numerous negotiations at different stages of development, but, with the slow progress of the World Trade Organization in achieving multilateral agreements, we are seeing more bilateral agreements.

Having secure energy supplies is of interest to the European Union, particularly in the light of other sources of supply. The issues of so-called carbon leakage and energy intensive industries moving from Europe to the United States are a source of concern that informs the discussion on the energy chapter. In respect of the Canadian agreement, I do not know the details on carbon reduction in oil products. I was pointing to the way in which the Canadian agreement represented a massive advance on previous ISDS structures. The next agreement with the United States will be dramatically different, but the European Union will always retain its right to regulate. No agreement can tell either side what its regulations should contain. I have not seen many signs that the European Union is downgrading its regulatory environment without very good reason. It is conscious about maintaining high standards of protection for the environment and labour. That is the European acquis.

The European Union was going to focus on regulating the offspring of cloned animals, but the issue was taken off the table because of the Americans' dissatisfaction.

I will have to investigate the details of that issue, as I do not have an answer for the Deputy.

Generally speaking, Europe is very cautious. The policy of the European Union is to maintain very high standards, but obviously if new evidence emerges, standards can change. Europe must be open to that. Certainly it is very clear that a trade agreement of this nature is not about diminishing regulatory protection. The regulatory protection is stated at the outset and in various chapters, and it will be an article of the regulatory agreement. The insistence on maintaining high regulatory standards is being tightened and is a characteristic of every aspect of the agreement.

I thank the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton and his officials for coming here to engage with the committees in what has been a very constructive and informative meeting.

I wish to clarify that cloning failed because of the disagreement between the European Parliament and the Council. It was not an international disagreement.

This is an opportunity to discuss that issue.

The Deputy will have to table a parliamentary question because I-----

The Minister is correct in saying that is the direct reason, but it is the political pressure of the TTIP negotiations that causes those things to happen.

I want to bring the meeting to a close. I thank the Minister, Deputy Bruton, and his officials for coming here to engage with the committees in what has been a very constructive and informative meeting. The Joint Committee on Jobs, Enterprise and Innovation will continue to monitor developments in respect of the negotiations and revisit the issue.

I invite Deputy Andrew Doyle to make some brief closing remarks.

I thank the Minister and his officials. Negotiations to make trade agreements more open will only work if they are mutually beneficial. I think we accept that. If one reflects on when Ireland joined the then EEC in 1973 and one compares the landscape then and now, we benefited from the removal of tariffs, not only in trading with member states but also with our largest trading neighbour, the United Kingdom.

We should look at this as an opportunity with significant challenges as opposed to a threat. It is a relief that it will not necessitate a referendum, but ultimately the member states will make a decision. It is important we have a process whereby Oireachtas Members are kept briefed. We are waiting for round ten of the negotiations. In the European Parliament building last month, when the question was posed on the number of rounds in the negotiations, no one would give an answer. That is just to get the agreement ratified in order that the Council can sign off on it before it goes through legal scrubbing and other things in the meantime.

I remind members that the Joint Committee on Jobs, Enterprise and Innovation will meet again on Tuesday, 30 June 2015, when the Vintners Federation of Ireland will appear in public session, followed by private business. The select committee will meet on Wednesday, 1 July at 2 p.m. to consider the Committee Stage of the National Minimum Wage (Low Pay Commission) Bill 2015.

The joint committee adjourned at 3.30 p.m. until 1.30 p.m. on Tuesday, 30 June 2015.