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Remarks by Ambassador Mulhall at DePaul University

Remarks by Ambassador Mulhall at DePaul University, 20 November 2019

'The Transatlantic Relationship: Ireland’s evolving role'

I want to thank DePaul University for the invitation to speak here today on the important topic of the Transatlantic relationship and Ireland’s evolving role within it.  Special thanks are due to Professor Mary McCain, Director of the University's Irish Studies Programme.

I want to make two points about the transatlantic relationship.

The first is that it is multifarious, with distinctive contributions being made by various European countries and by individual US States.

The second is that it is a two-way relationship. This is likely to become more apparent in the years ahead as shifts in the global environment make trans-Atlantic interdependence even more important than it is today.

The EU and the US have benefited greatly from the post-World War 2 international order that Americans and Europeans largely shaped. And we have a shared stake in the continuation of a rules-based, liberal international system in which goods, services and investment can flow freely.

The Transatlantic relationship: The transatlantic relationship is the most significant and enduring in the modern world. It has come a long way since the first transatlantic cable was laid in the 1850s which carried messages on a single link from Valentia Island in County Kerry to Newfoundland 160 years ago. Transatlantic relations now resemble the fibre-optic communications cables of the 21st century in their complexity, diversity and ingenuity.

There are as many transatlantic ties as there are European countries. Each country has its own set of historical links with the US. Many EU countries have significant Diasporas in this country, but Ireland is a special case considering the scale of Irish America and the depth of its attachment to Ireland. European economies tend to be strongly connected with the US, albeit to varying degrees of intensity. Proportionately, Ireland is probably the EU country with the strongest economic nexus with the US. And each EU country has a set of political ties with the US based on overlapping interests, security connections and shared values.

There are of course transatlantic institutional liaisons through the European Union, NATO, the OSCE, the OECD and the Bretton Woods institutions. The US and its European partners were founders of NATO, and of the IMF and the World Bank. Those global economic institutions have their headquarters in Washington.  Right back to the birth of the EU, the US has been a consistent supporter of European integration.

I am best placed to speak about the Ireland-US relationship which differs from others of course, but is generally illustrative of the wider realities of transatlantic ties.

Irish-US ties: Ireland's relationship with the United States is based on historical interactions that go back to at least the 18th century. Crossings of the Atlantic multiplied steeply in the mid-19th century with vast numbers of Irish immigrants fleeing famine and deprivation in Ireland. In the teeth of adversity, they helped to change the face of the United States, contributing to making it the country it is today.

Those immigrants came with a sense of economic and political grievance that helped sustain their Irish identity, one that was passed down through the generations. New arrivals from Ireland continually refreshed the Irish community and renewed its commitment to, and connections with, Ireland.

Irish America played an important role in the late-19th and early 20th centuries in support of various Irish movements that helped pave the way for Irish independence. Irish Americans kept the flame of Irish freedom alive during those dark decades after the Great Famine of the 1840s.

Pride in their Irish heritage continues to connect Irish Americans, who now number some 33 million, with their ancestral homeland. More and more of them now visit Ireland, which helps account for a remarkable fact that Ireland plays host to 10% of all American visitors to Europe each year. More than 2 million Americans visited Ireland last year.

Ireland's traditional links with the United States have been augmented these past 50 years by a major economic connection. This began in the 1960s when the Irish Government decided to open up our economy to foreign investment. At that time, the Irish economy was relatively weak, inward-looking and heavily dependent on the food sector, and on the British market. Emigration continued to ravage Ireland in the early decades of our independence and in 1960 our state's population reached a low-point of under 3 million. Today, it is 4.9 million, but the population of our island is still considerably smaller than it was during the 1840s. 

US involvement in the Irish economy has increased and intensified over the decades and today more than 750 US companies employ about 160,000 people in Ireland.

US companies come to Ireland for a range of reasons - our access to the European single market, our young and highly-educated population, the quality and transparency of our legal system, the fact that Ireland is a business-friendly country where so many American multinationals have operated successfully, and on account of our stable and competitive system of corporate taxation. Ireland's 12.5% corporate tax rate has been in place for decades and there is a firm Government commitment to its retention.

The flow of US FDI into Ireland has helped transform the Irish economy. When we joined the EU in 1973, Ireland was by far the least developed of the then 9 member States with a wealth level less than two-thirds of the European average. Today, we have caught up with our EU partners and are now well above the EU average.

US investment in Ireland has produced an extraordinarily strong trading relationship between our two countries, amounting to more than $100 billion in two-way trade each year. Many of today's successful Irish-owned companies were founded by people who acquired experience working with US companies in Ireland and then set out on their own, often acting as part of the supply chain for US multinationals.

This powerful flow of trade and investment benefits both our economies hugely, sustaining jobs and prosperity on both sides of the Atlantic. Ireland provides US companies with an indispensable location for their operations in Europe. The jobs of up to 250,000 Americans are dependent on US exports to Ireland.

A less well-known feature of the Ireland-US relationship is the fact that Irish companies have in recent times invested strongly in the US. Currently, there are some 100,000 Americans employed by more than 500 Irish companies with operations in the US.  This is a product of the growth of the Irish economy and the need for our companies to internationalise their operations in order to ensure their continued success. We can expect this trend to continue and indeed to intensify in the years ahead. In 2017 and 2018 alone, a total of 120 Irish companies entered the US market for the first time.

Among European Union countries, Ireland has a particular profile. We are committed members of the European Union, but we have since World War II maintained a traditional policy of military neutrality. We make our contribution to global security through active participation in UN peacekeeping operations where we have an unbroken 60-year record of involvement.

We also maintain an active and high calibre development aid programme, centred mainly in sub-Saharan Africa. We have a deep commitment to the United Nations and will be seeking a seat on the UN Security Council for 2021/22, which will be a fitting way to mark a century of Irish independence. We are a close friend of the United States, but one with an independent frame of mind when it comes to international issues.

If you ask me what we would want from the future of Irish-US relations, I would probably answer 'more of the same'. After all, what is there not to like about a friendly relationship based on historical and family ties, mutual economic advantage and shared values and interests?

Challenges ahead: We have to recognise that the world around us is changing and that the tried and trusted anchors may no longer hold things in place.

There are changes underway in Europe. The EU has been a bulwark of prosperity and stability in Europe and the world for decades, but there are new challenges - economic, environmental, political and security ones - facing Europe at present.

Ireland has benefited immensely from EU membership and has, as an EU member, become a bridgehead for US companies into the single market. EU membership is overwhelmingly popular in Ireland. In recent polls, more than 90% of Irish people favour continued membership. The remarkable popularity of EU membership in Ireland is rooted in an appreciation of the value of EU membership and its manifestly positive effects on Ireland.

The UK's eventual departure from the EU, which we hoped would not happen and believe to be a bad idea, will change the EU and Ireland's role within it. Regardless of what happens with our nearest neighbours, Ireland remains firmly committed to EU membership. We will, of course, be determined to maintain close ties with our nearest neighbour after they leave the EU.

The UK's exit creates multiple uncertainties. For Ireland, it raises concerns about our vital trading ties with the UK and about the border in Ireland which is currently an invisible one. We are absolutely committed to keeping it that way. Throughout the negotiations between the EU and the UK, our determination to avoid a hard border in Ireland has enjoyed the undivided support of our EU partners. 

After nearly three years of EU-UK negotiations, an agreement was reached last month between the EU and the British Government on the terms for Britain's withdrawal from the EU. This is not the first such agreement. An earlier version of the Withdrawal Agreement failed to win majority support in a deeply-divided British House of Commons. The most recent deal remains to be ratified and its fate will depend on the outcome of next month's British General Election.

While last month's EU-UK agreement is a compromise for which both sides had to make concessions, we are happy with it as it will protect our open border and will respect the provisions of the Good Friday Agreement, which has been our red line throughout these negotiations.

After the UK leaves the EU and embarks on what are likely to be complex and demanding negotiations about its future relationship with the EU, Ireland will be pressing for the closest-possible ties between the EU and the UK, so as to facilitate the further evolution of Ireland's already-extensive economic exchanges with our nearest neighbour.

There will be some advantages for Ireland when we become the sole English-speaking country in the EU. We expect this to make us an even more attractive location for US investment than we already are.

It is likely that US companies will value the opportunity to operate in a country with a familiar legal system, a highly-educated, English-speaking workforce and a similar business culture. 

Furthermore, it seems to me that there is scope for Ireland to play an enhanced trans-Atlantic role. This is because Ireland will after Brexit be the EU country with the closest ties to the United States. I hope that this will lead to an intensified dialogue between Ireland and the US including on issues to do with EU-US relations.

Let me make it clear that I am fully aware of the limits of such a role. Trans-Atlantic relations will need to be conducted between the EU and the US, but there is always scope for ancillary strands of dialogue that complement the main lines that will run from Washington to Brussels.

The economic importance of the transatlantic relationship: The stakes in transatlantic relations are incredibly high. The EU-US trade relationship is massive, balanced and mutually-beneficial. The transatlantic economy accounts for 46% of global GDP, over half of the world’s Foreign Direct Investment (FDI) and one third of its trade flows.

The US and EU are each other’s largest trading partners, with trade in goods and services totalling $1.1 trillion in 2017.

US exports to the EU that year totalled $528 billion in 2017, supporting an estimated 2.7 million US jobs.

But the modern transatlantic economy relies on investment even more than trade. The EU-US investment link is an incredibly productive one. More than half of global investment into the US comes from Europe, with EU firms directly employing 4 million US residents in 2017. EU investment in the US is around eight times the amount of EU investment in India and China together.

Overall then, almost 7 million US jobs rely on transatlantic trade and investment.

I know that there has been some focus in recent years on the EU's trade surplus with the US and there is no denying that we have one. That is not the fault of high tariffs. In fact, tariffs between the EU and the US are quite low. The EU’s trade surplus is offset by the profits made by US companies from their operations in Europe. 

These figures show why it is incredibly important that we avoid going down the road of tit-for-tat tariffs between the EU and the US. It is disappointing that tariffs have been imposed by the US on steel and aluminium exports for which the EU has retaliated with tariffs of its own on US exports to Europe.

Last month, as part of a dispute over subsidies to Airbus, the US applied tariffs on a range of EU products. While Ireland has no involvement whatsoever in the Airbus project, important Irish exports have been hit by tariffs, notably Irish butter and cream liqueurs. In fact, on a per capita basis, Irish exports to the US have been hit harder than those of any other EU country, including the four countries directly involved in Airbus production. The Irish companies affected by these tariffs have built their markets in the US over an extended period and have invested significantly in this country. It is unfair that they should be penalised in this manner.   

Because we have such an intensive economic relationship with the US, Ireland has a lot at stake in the success of the ongoing EU-US negotiations.  I should recall that it was during Ireland's 2013 EU Presidency that the TTIP talks were launched and it is a pity that they did not produce the outcome we desired.

Ireland has been a major beneficiary of the phase of globalisation that began in the 1990s. As a small, English-speaking country with a highly educated population, we were well equipped for the opportunities that arose at that time. We would clearly be disadvantaged by any rolling back of globalisation and a resurgence of economic nationalism.

I am not blind to the challenges that are emerging today, especially from those who feel aggrieved that they have been bypassed by developments in the global economy. My country continues to believe in the utility of multilateral approaches to global problems. The solution to our current predicaments is to refurbish the fabric of the global system and not to withdraw into national silos.

I believe that Ireland and the US have considerable common ground and a shared stake in a world in which the rule of law continues to prevail and the democratic and tolerant values we share continue to act as an underpinning to our prosperity and security.

In Ireland, we are approaching an important milestone in our history for in 2022 we will celebrate a century of Irish independence. Our country today is vastly different from the one that began its journey as a sovereign state a hundred years ago.

Ours is now a fully developed western economy with a growing population, 17% of which was born outside of our State. We are a globally-connected country and are now exploring new horizons as a knowledge economy. We know that the future of Ireland lies less in making things than in making things up, in innovation and imagination applied to the challenges of today and tomorrow.

I hope that the future will see our unique Irish-US relationship continue to deepen with more extensive people-to-people connections, an intensified political dialogue with EU-US relations as a focal point, a further development and diversification of our two-way economic relationship and increased collaboration in education, science and technology and the arts. That would be a good way of building on the foundations laid by generations of immigrants and their descendants who helped make America the country it is today.

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