Why Ireland's lucrative exports to Canada are in jeopardy

The French senate last week voted to reject the Ceta free trade agreement between the EU and Canada

In November, Enterprise Ireland client companies took part in a trade mission to Vancouver and Toronto. Picture: iStock

The overwhelming vote by the French senate last week to reject the free trade agreement between the EU and Canada puts Ireland’s lucrative trade with the North American country in jeopardy.

The decision is a blow to the Macron government and a victory for the French farming lobby, who have opposed the trade deal from the outset, seeing it as another example of EU policies damaging their interests.

Although a setback for the French government, the no vote does not in itself nullify the trade agreement. Under EU rules, the rejection is only effective if the government officially notifies the EU, which Emmanuel Macron will be under pressure to do.

The Oireachtas has yet to ratify the trade agreement, despite gaining extensively from the seven years of provisional acceptance of its many benefits.

The French rejection of the free trade agreement, known as Comprehensive Economic and Trade Agreement (Ceta), will send a worrying signal to the Coalition Government and the many Irish exporters who have seen significant increases in sales of goods and services to Canada due to the agreement.

Ireland gains most

In the EU, Ireland has gained most from the trade agreement, with exports of goods increasing by over 400% to €4.1bn and services exports following rapidly behind, reaching €3.4bn in the period since it came into force in 2017.

The EU average export sales increase over the seven years has been a much smaller figure of 47%, with French critics who have pushed through the rejection of the trade agreement arguing that it opened the door to low-cost Canadian meats which do not meet EU health and environmental standards.

Investment by Canadian companies in Ireland is also an important side benefit of the expanding trading relationship which, according to the Ireland Canada Business Association, accounts for 20,000 jobs and a cumulative investment of in excess of €7bn.

Canada Life will immediately come to mind, as the earliest and long-term investor in Ireland, but there are upwards of 75 others here including Shopify in Dublin, Celestica in Galway, Optel in Limerick, and Open Text in Cork.

Brexit has undoubtedly been a factor for Canadian investment in Ireland, with Canadian companies, small and large, increasingly using Ireland as a gateway to the European markets, facilitated by the lowering of regulatory burdens under the free trade agreement.

With these strong trading benefits for the Irish economy, there is little excuse for Ireland being one of the 10 EU countries that have dragged their feet over the past seven years in not fully endorsing the EU-Canada free trade agreement.

Like all EU trade deals, Ceta was negotiated by the European Commission but also needs approval from each EU member.

In the EU, Ireland has gained most from Ceta, with exports of goods increasing by over 400% to €4.1bn. Picture: Mark Stedman

Last September, Fianna Fáil TD Robert Troy questioned Enterprise Minister Simon Coveney in the Dáil on the matter.

The minster advised that the Supreme Court had ruled that the Constitution precludes the Government and Dáil Éireann from ratifying Ceta as Irish law now stands, and that certain amendments to the Arbitration Act 2010 would be required to allow ratification to proceed.

This remains the case, but as Mr Coveney said in his response to Mr Troy, the Government remains committed to the ratification of the agreement and is taking advice from the Office of the Attorney General with a view to informing the next steps.

In 2017, the Government managed by a tight margin to get approval for the provisional implementation of Ceta, despite the objections of a coalition of Irish farmers, environmentalists, trade unionists, and small business organisations, who called on MEPs to oppose the approval of the free trade agreement.

The farming lobby and other critics of the agreement will no doubt take comfort from the success of their French counterparts in blocking ratification of Ceta and will look forward to repeating the blocking here in Ireland.