The Supreme Court decision to rule that approval of a controversial free trade agreement between the EU and Canada would be unconstitutional is a headache for the Government. Taoiseach Micheál Martin said that the majority judgment provided “clarity”, but there is no doubt that it will have caught the Government by surprise. A legislative change has been pointed to by the court as a potential way to allow the agreement to be approved by the Oireachtas, without falling foul of the Constitution.
The Comprehensive Economic Trade Agreement (Ceta) has long been controversial in the Green Party, and the Supreme Court judgment, in a case bought by party TD Patrick Costello, will reignite this issue and potentially complicate the way forward for the Government. Costello and some party colleagues are pressing for a referendum on the issue, while the Taoiseach has pointed to the view of the court that amending the Arbitration Act would remove the problem.
The key point at issue is the Investor Courts mechanism which the Ceta agreement proposes to put in place to adjudicate on disputes. In cases where Canadian companies are in a dispute on an aspect of the agreement in Ireland, it is possible that they could get a ruling in their favour from an arbitration tribunal which could take precedence over a judgment of the Irish courts in the same matter. In other words the tribunal set up under the Ceta agreement could exercise judicial powers in respect of the Irish State and give decisions enforceable here under law.
Opponents of the proposal, including Costello, argue that this could also potentially constrain Government policy if, for example, a Canadian company sought compensation due to changes in environmental law. The possible remedy, through changing arbitration legislation, would ensure that the High Court would have powers to refuse to give effect to decisions of the Ceta tribunal where they were seen to compromise the constitutional identity of the State or obligations to enact EU law.
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The decision vindicates Costello’s decision to take the case and is an embarrassment for the Government. The backdrop is that the free trade element of the Ceta deal, struck in 2016, is already provisionally in force, though the full agreement is not. Amending the Arbitration Act offers an “Irish solution”, which would avoid a constitutional referendum. How the other parties to the deal would react to this is an interesting question.
As a State that benefits hugely from free trade, Ireland has been right to support the agreement and others like it. That said, a number of other EU states have still to approve the agreement. Against this backdrop, the first response of the Government here will be to play for time, which is reasonable given the complexity of the issues and the lengthy Supreme Court decisions.