The Government is set to approve new legislation to accelerate ratification of the trade deal between the European Union and Canada as part of a shift towards reducing the State’s high reliance on the United States as a trading partner.
Minister for Trade Simon Harris is expected to bring a memo to Cabinet on Tuesday seeking approval for the drafting of the Arbitration (Amendment) Bill 2025, which will pave the way for the Comprehensive Economic Trade Agreement (Ceta) to be ratified.
Government sources say they expect Ceta to be approved by the end of the year. The trade deal with Canada has to be ratified by each member state of the EU.
The Arbitration (Amendment) Bill 2025 will address a Supreme Court judgment in 2022 that ruled the investor-state arbitration schemes in Ceta were not compatible with the Constitution. It found such schemes bypassed the role of Irish courts, which would be powerless to respond to an award granted by a Ceta tribunal.
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The trade agreement with Canada has proved controversial particularly in relation to those provisions that allow a private company to seek arbitration and compensation for a State action or policy that has an adverse impact on its business.
Opposition parties in the last Dáil argued that the private investor courts undermined the sovereignty of the State. Members of the Green Party, then part of a coalition government, made similar arguments. Then Green Party TD Patrick Costello mounted a legal challenge to Ceta and this was accepted by the Supreme Court on appeal.
The new Bill is expected to address specifically those investment provisions and to ensure the role of the Irish courts is not circumvented.
The memo to the Government is expected to say that Ceta is an important part of Ireland’s diversification strategy in reducing concentrated risk among trading partners. It will say its urgency has been brought into sharp focus by the volatility of US tariffs and the overall uncertainty in the global trading environment.
Tánaiste Mr Harris is expected to tell colleagues that free-trade agreements such as Ceta provided significant opportunities to help Irish-based companies increase market and product diversification. Trade between Ireland and Canada increased from €3.2 billion in 2016 to more than €10 billion in 2023.
It is not yet clear if the Bill will come before the Oireachtas before summer, but several government sources have told The Irish Times they are optimistic Ceta will be ratified by the end of the year.
The Bill will face concerted opposition from the Opposition. Earlier this month, Sinn Féin MEP Lynn Boylan said that fully ratifying it made no sense as many parts of the agreement were already in operation allowing free trade between the EU and Canada.
“The one part that isn’t operating are private investor courts. These courts let big businesses sue states if they take any action that harms the profits of these businesses. This meant that even vulture funds could sue Ireland,” she said.
The legislation comes amid intensive lobbying by senior government members of their US counterparts to persuade Donald Trump‘s administration not to impose tariffs on pharmaceutical products and semiconductors.
In a letter to US Secretary for Commerce Howard Lutnick this month, the Tánaiste warned that imposing tariffs would have a detrimental impact on both economies.
In the letter, Mr Harris wrote: “I am of the strong view that the Irish pharmaceutical sector supports the health of the American people, and to impose tariffs on this sector risks not only the strides that need to be made in future innovation, but also threatens the resilient supply chains needed to provide products to the US that have developed over recent decades.”
Mr Harris said imposing tariffs and increasing costs on two strategic sectors that faced growing competition from other regions would not be an aid in supporting US interests.
Last week, the US president threatened to increase tariffs to 50 per cent on goods imported from the EU.
