June 11, 2015
Thank you Chairman for the invitation to address this committee on a very significant opportunity for Ireland, the EU and the US: the Transatlantic Trade and Investment Partnership.
The American Chamber of Commerce Ireland supports an ambitious and comprehensive agreement, including strong provisions on regulatory coherence and cooperation both at the horizontal and the sectorial level. We are of the view that the agreement is urgently needed on both sides of the Atlantic for both economic and strategic reasons including; building on the existing strength of our economic ties to generate jobs and growth; addressing duplicative and unnecessary administrative hurdles for the trade of goods and services; elevating the strengths of our respective regulatory systems by enhancing coordination between regulators and encouraging the recognition of equally acceptable high standards.
As a key partner in transatlantic trade and investment, Ireland is likely to emerge as a significant beneficiary of a successful and comprehensive transatlantic free trade deal. TTIP would increase the volume and value of transatlantic trade and investment, create employment opportunities and boost incomes in both the US and EU, and improve global competitiveness of both parties. A recent report from Copenhagen Economics suggested benefits to Ireland from an agreement could include:
- GDP growth in the order of 1.1%
- Increase Irish real national income by €2.4 billion, (approximately 1.5%)
- 5,000-10,000 extra jobs in exporting sectors
- Increase real wages by 1.5% across all skills groups
- Increase exports by 3.8%
- Increase investment in Ireland by 1.5%
- increase trade and investment both with the US and with other countries
The American Chamber of Commerce Ireland represents the 700 US firms in Ireland that employ 130,000 people - accounting for over 70% of all IDA supported employment. Collectively US companies have invested $240 billion in Ireland and account for 26% of our GDP. In our report, The Irish-US Economic Relationship 2015, launched earlier this year, we highlighted the fact that Ireland now ranks as the number one export platform in the world for US subsidiaries overseas and in 2014 became the number one destination for US investment flows. In turn, according to the latest available figures, Irish businesses have invested a stock of $26bn in the United States and Irish firms in the US generated $62bn in sales in 2012. In fact, according to the OECD, Ireland is the 14th largest investor in the United States. In 2014 we exported goods to the value of nearly €20 billion to the US and imported €5.8 billion worth of goods in return. The US is our No 1 goods export market, while Ireland is the 13th largest trading partner for the US. The scale of the investment relationship, the trade relationship and the deep political and cultural relationship we share with the United States is unparalleled.
A comprehensive TTIP agreement would be of great benefit to businesses of all sizes throughout Ireland. Barriers to trade are an obstacle for any business, but larger companies can generally cope with the inconvenience and compliance costs and still do business globally. However, smaller companies do not always have the resources to deal with these issues and will often avoid exporting altogether. Simplified trade rules would deliver efficiencies and consumer choice through greater SME participation. Ireland exports 80% of everything it produces; meaning tens of thousands of Irish jobs depend on good foreign trade relationships. Reducing barriers to trade will have important implications for businesses of all sizes across the county. These barriers have a real impact on Irish businesses and their reduction, or removal, would have significant consequences for sectors in which Ireland is commercially active. For example:
Pharmaceuticals is one of Ireland's biggest industries - with nine of the top ten global pharmaceutical companies located here - and having a set of common standards would increase safety while cutting costs. Irish pharmaceutical products are thoroughly tested here so they can be sold throughout the EU, but they have to undergo costly testing again to enter the US market. This is despite the fact that Irish pharmaceutical plants have an exceptional record in terms of FDA inspections, and are rated extremely highly. TTIP aims to eliminate expensive and time consuming double testing without compromising safety standards.
The internet allows Small and Medium Businesses to sell their products easily across the world but exporting can be difficult. They can be hindered in their exporting abilities by having to comply with a variety of customs rates and import rules for all the different products they sell. By eliminating tariffs and streamlining customs procedures, it will become easier, faster and cheaper for online retailers to ship their products and access markets that were simply too complex to tap into before.
Key horizontal principles for a successful agreement would include:
- Regulatory cooperation and coherence: A focus on enhanced cooperation in EU and US regulatory processes will create a more efficient regulatory environment and enable a consistent and certain operating environment for businesses.
- Elimination of tariffs: Although tariffs are already low between the EU and US, they remain high for specific sectors and are still a tangible obstacle. Moreover, with complex global supply chains, these tariffs simply act as an unnecessary cost to companies seeking to compete on equal terms with companies in emerging economies.
- Common regulatory impact assessment procedures: Impact assessments of future regulations could benefit from a joint EU-US approach by identifying potential barriers to trade and investment upfront.
- Coherence with international trade rules: We support comprehensive trade agreements that reinforce the long-standing principles of the global rules-based trading system, including national treatment, non-discrimination and objective policy-making based on sound science.
The Chamber believes this EU-US trade and investment partnership agreement is the single best opportunity we have to accelerate growth and jobs throughout the transatlantic community. Importantly, this commercial relationship isn't based solely on commercial interests, it's also based on common values-democracy, civil liberties, and the rule of law, not to mention a long and rich history of friendship and strategic partnership. TTIP is unique because of its potential to set high global standards for 21st century trade and investments agreements around the world in such areas as protecting intellectual property, cultivating the digital economy, and combating trade and investment protectionism. Hence, the Chamber is very supportive of an ambitious and comprehensive agreement, including strong provisions on regulatory coherence and cooperation.
From the Chamber's perspective underpinning all of that commercial success has been our pro-investment and employment policy environment, our track record and the talent and agility of the world-class workforce located here in Ireland. The Irish-US economic relationship is increasingly focused on innovation and skills; we are the gateway to Europe for US firms and remain the location of choice for US investment. All of this indicates that a comprehensive and ambitious EU-US trade and investment agreement would be a significant benefit to Ireland. Ireland is ideally positioned to benefit from the anticipated increase in trade and investment flows that would arise from a successful trade agreement.
The EU-US trade and investment relationship is the largest and most important in the world, generating $5.5 trillion in total commercial sales a year and employing up to 15 million workers. Since the negotiations began two years ago the American Chamber has been advocating for a comprehensive deal. We have met with local businesses and communities across Ireland to discuss the potential of such a deal. We have been engaged with US and EU officials as well as communicating our support for an agreement that is ambitious, robust, and that ensures a high standard of protection for human health, for the environment, for the consumer and for workers. A successful TTIP could help to set the rules of international trade for decades to come.