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The two-way economic ties between Ireland and the United States

In recent weeks, I have given quite a number of briefings on the Irish economy in various parts of the United States.  My aim has been to bring home to my American audiences the mutually-beneficial economic relationship that now exists between Ireland and the United States, based on substantial two-way flows of trade and investment. Here is the gist of what I have said on such occasions.

My aim as Ambassador is to promote enhanced economic collaboration, trade and investment between our two countries. Before looking at our current relationship, I want to reflect on our shared past. 

Irish immigrants built America: Across the 18th and 19th centuries, the Irish helped build America, both as a country and as an idea. Physically, from the skyscrapers of Manhattan to the mines of Montana, this nation’s infrastructure bears an indelible Irish imprint.

Intellectually, nine of the signatories of the Declaration of Independence were of Irish descent, three born on our island. No fewer than four of America’s Founding Fathers could trace their roots to Ireland.

And emotionally, the Irish commitment to America’s cause finds its fullest reflection in the fact that, of the 769 Medals of Honour the US Congress has bestowed on individuals born outside the United States, 261 were awarded to persons born in Ireland, a number far above any other ethnic group.

Through the 20th century, Irish immigrants continued to help America prosper. But over these same decades, America played a significant role still in helping build modern Ireland. From our struggle for independence through to the realisation of peace on our island, no country contributed more than the United States, and in particular the community of Irish descent here.

And, economically, dating back to the first Ford factory outside the US, which opened in Cork in 1917, investment by US firms - many of them, like Ford, led by Irish-Americans - underpinned our development.

American investment in Ireland: When President Ronald Reagan visited Ireland in 1984, he extolled the fact that at that time 300 American firms had invested there, employing some 40,000 people. Three decades later, the number of US companies with investments in Ireland has more than doubled to 700 plus, while the numbers they employ have increased almost fourfold to 150,000.  This shows that many leading US companies now have substantial operations in Ireland.  

Ireland’s attractions as an investment location: Why have US firms built such a strong presence in Ireland? No single reason, but many.  Talent is one. Our population is Europe’s youngest, with 40% under 29 years of age. And, having invested heavily in our education system, our labour force is amongst the World’s best qualified. More than half of those in Ireland aged between 25 and 45 hold third-level qualifications, 10% above the OECD average.

Competiveness is another factor. Going back to the late 1950s, Ireland has opened its economy to international trade, while developing a pro-business environment underpinned by a tax code which is not only competitive in rate (12.5%) but - just as critically - stable, simple and transparent in function.

Connectivity is a third. 33 million US citizens, including over a million residents in this great state, claim an Irish heritage. That’s more than 10% of this nation’s population and seven times that of Ireland. Last year alone, our island - no larger in size than Indiana - welcomed almost two million US visitors. One in every ten Americans who visit Europe now visit Ireland. Those personal bonds underline and sustain economic ties between our nations.  

Linked to this, finally and critically, is openness. When I joined our diplomatic service, a few years after Ireland became as member of the EU in 1973, less than 5% of the population of our country was born overseas. Today, more than 17% of those who live in Ireland were born abroad. Currently, Ireland’s workforce is the third most international in Europe.

These positive attributes combined with barrier-free access to the world’s largest market, the EU, has made Ireland a natural location for US investment.

In the years ahead, as Ireland becomes the only English-speaking country in the EU post-Brexit, I am confident that our attractions as a European location for US investment in Europe will increase further.  

Ireland’s economic presence in the USA:  But in the 21st century, our trade and investment is not a one way flow; it’s a two way street.

According to the US Bureau of Economic Analysis, Ireland’s investment in the US totalled $147.8 billion dollars in 2017. This means that Ireland has a stake in the US economy larger than countries many times our size, including Brazil, China and India.

These are big figures. But what do they mean in practice? How do Irish businesses benefit US citizens? Well, for one, Irish businesses build American homes. From CRH / Oldcastle, the continent’s largest asphalt producer, to Kingspan, a market leader in advanced insulation, Irish firms are at the cutting-edge of US construction.

Irish businesses save American lives. Companies like Aerogen, whose revolutionary aerosol delivery system, patented in Galway, has improved health outcomes for more than 2.5 million American patients. And Icon, whose award winning research and development services have led to the approval of 18 of the world’s 20 best-selling drugs.  

Irish businesses sustain Americans. Kerrygold is America’s third largest butter brand; McCann’s is one of America’s favourite imported cereals. Kerry and Glanbia meet growing US consumer demand for advanced nutrition products.       

Finally, of course, Irish businesses employ Americans. Over 100,000 to be exact, across all fifty states.  And their investment is increasing. Last year, Enterprise Ireland client companies opened 59 new offices across the US, bringing to almost 500 the number of Irish firms with facilities there.

Transatlantic partnerships: These and other Irish investments are part of a larger transatlantic tapestry. Together the European Union and the United States account for half of global GDP, more than half of the world’s Foreign Direct Investment and a third of global trade flows. Each year, more than a trillion dollars in goods and services crosses the Atlantic, sustaining millions of livelihoods at either end.

Though located on the edge of Europe, Ireland is at the heart of the European Union. As such, we have a special interest in cultivating EU-US relations. It was with that aim that we pressed to launch negotiations of the Transatlantic Trade and Investment Partnership during our Presidency of the EU in 2013.

And it is with our commitment to positive transatlantic relations in mind that we welcome the agreement reached by Presidents Trump and Juncker in July to launch a new phase of dialogue on a set of trade issues. It is important that we do everything in our power to avoid a cycle of tariffs and counter-tariffs which would endanger our shared prosperity.

And the transatlantic relationship is not merely an economic one, far from it. What is now the EU was set up in the 1950s with US encouragement in an effort to overcome Europe’s divisions which had wrought such destruction in the first half of the 20th century. It has succeeded handsomely and the past six decades have seen Europe as a bastion of stability and prosperity.  Countries that were for decades under Soviet domination are now part of the EU. Over the decades, EU countries have cooperated closely with the US in pursuit of our shared interests and values. Long may that successful transatlantic partnership continue to deliver for Europeans and Americans!      

We have a proverb in Irish - ‘‘Ní neart go chur le chéile’’, which translates as ‘‘There is no strength without unity.’’  That applies to Irish-US relations and to the transatlantic partnership that has served Europeans and Americans so very well for so long.


 

 Daniel Mulhall is Ireland's Ambassador to the United States