Shaping the Future of Transatlantic Trade - American Chamber hosts its 2020 Transatlantic Conference
Thursday, 5 March, 2020.
- The economic fundamentals of the Irish US business relationship remain very strong
- Increase in employment during 2019 with over 700 US companies now employing over 160,000 people directly in Ireland, and an additional 128,000 employed in supporting businesses
- Ireland commands 12.2% of US investment into the EU
The American Chamber of Commerce Ireland today hosts its 2020 Transatlantic Conference ‘Shaping the Future of Transatlantic Trade’ at Croke Park Conference Centre, Dublin. Incoming President of the American Chamber Carin Bryans will welcome guest of honour, EU Commissioner Phil Hogan to the event which will also feature the launch of the 2020 US Ireland Business Report with an economic chapter by Wall Street economist Joseph Quinlan, highlights the continuing growth and strength of the Irish US business relationship.
Commissioner Hogan will address the gathering of over 300 American Chamber members on the EU & UK/US Trade Relations. The American Chamber Transatlantic Conference will also discuss a number of the key themes and challenges that are central to Ireland’s continued success in winning US FDI, including; Transatlantic Business Relations - The State of Play; Taking Stock - Two Way Investment, Trade Relations and the current Geo-Political Climate; The Next Data Decade; Ireland’s Opportunity for the Digital Economy, and much more.
Guest speakers included Dr. France A. Córdova, Astrophysicist, Director of the US National Science Foundation and former Chief Scientist at NASA; Jason Oxman, President and CEO of the US Information and Technology Council; Dr. Orlagh Quinn, Secretary General, Department of Business, Enterprise and Innovation; and leaders from a number of US multinationals. The event will close with The Ambassador’s Perspective by US Ambassador to Ireland, Edward F. Crawford and Irish Ambassador to the US, Daniel Mulhall.
Speaking about the US Ireland Business Report, which will also be launched in the US during the Chamber’s annual programme of engagements for St Patrick’s Day, the President of the American Chamber, Carin Bryans, said “Our US Ireland Business Report shows that US direct investment stock in Ireland totalled a record $ 444 bn in 2018, while figures from the Bureau of Economic Analysis show that Ireland’s share of US investment stock in Europe was 12.2%. This is a relationship that delivers remarkable impact into the Irish economy, and one which is central to the country’s economic success.”
“It’s also important to focus on the success of Irish investment into the US, with a record 900 Irish companies active in the US market, investing over $146bn and employing over 110,000 people in the US. Ireland is now the 9th
largest investor into the US, demonstrating the truly mutually beneficial nature of this close business relationship.”
In his economic report, acclaimed Wall Street economist, Joseph P. Quinlan, said “The economic fundamentals of the Irish-U.S. relationship remain rock solid. Europe in general, and Ireland in particular, remain critical entities to the success of Corporate America, whether in manufacturing or service activities. By the same token, the U.S. market. remains among the most important in the world for European and Irish firms. As we have highlighted numerous times, no two other regions in the world are as deeply integrated as the U.S. and Europe, with Ireland a key hub for the transatlantic economy that generates total commercial sales in excess of $5.5 trillion each year.
“Investment trends suggest that the factors driving foreign direct investment continue to favour Ireland and the United State,” said Joseph Quinlan, “According to the most recent data from the United Nations, the United States remains among the top destinations for FDI projects (both size and volume), while Ireland continues to lead the world for attracting high-value projects, generating substantial inward investment with strengths in highly sophisticated sectors such as ICT, financial and business services and life sciences serving the European marketplace.”
“At the same time, 2018 and the first nine months of 2019 saw a large shift in US capital flows back to the United States as firms repatriated retained earnings in response to the 2017 Tax Cuts and Jobs Act. In 2018, U.S. firms repatriated over $750 billion and an estimated $350 billion in 2019, for a total of $1.1 trillion in total repatriated capital since the 2017 Tax Act. Recent declines in U.S. investment flows to Ireland, with net outflows of -$80 billion recorded in the first nine months of 2019, was expected and reflects more one-off policy changes than direct investment fundamentals.”
“The transatlantic economy is expected to expand again in 2020, led by the United States where one of the longest economic expansions in modern history continues. After expanding by roughly 2.5% in 2019 - the tenth year of consecutive growth - the U.S. economy is forecast to grow by an estimated 2% this year. That is hardly stellar but nevertheless a solid outlook for an economy that is now larger than $22 trillion.”
“The aftershocks from Brexit are still reverberating in Ireland, the pending trade negotiations are likely to paint a clearer picture on the real implications of Brexit. On the plus side, many multinationals have chosen Ireland as an alternative site from which to access the European Union, boosting aggregate investment. This, among other advantages, has seen Dublin ranked as the number one large city in the world for inward investment according to the Global Cities of the Future 2018/2019 report, which also endorsed Ireland’s capital city as the best in the world in the Large City and Economic Potential. The downside: the UK is Ireland’s second-largest export market and a key source of imports, meaning a negative outcome in trade negotiations could disrupt bi-lateral flows in both exports and imports, dampening demand and boosting inflation in the process. Indeed, in the first nine months of 2019, Ireland’s exports to the United Kingdom fell nearly 4% from the same period a year ago, while imports rose just 1.8%. No other nation in the EU is more exposed to UK’s epic decision to exit the European Union than Ireland. How Brexit plays out over the next years will have significant short and long-term consequences for Ireland.”
According to the 2020 US Ireland Business Report, Ireland continues to punch above its weight when it comes to attracting the capital of some of the world’s largest and most innovative companies. According to figures from the United Nations, of the top ten investor developed economies in 2017, the last year of available data, Ireland ranked 8th. Global inward FDI stock of Ireland totalled $909 bn in 2018 (the last year of available data). Only eight countries tallied more, including the U.S., Hong Kong, the United Kingdom, China, Singapore, Switzerland, the Netherlands, and Germany. All these nations - like Ireland - have certain attributes that stand out when it comes to garnering foreign capital.
In Ireland’s case, it’s not one factor, but many that draw foreign direct investment. First, U.S. multinationals prefer to invest in markets and economies that are healthy and growing, and on this basis, Ireland easily stands out from the rest of Europe and many emerging markets for that matter. Second, Ireland’s human talent - the nation’s young, educated workforce - remains a key attraction, notably among high-productivity sectors and innovative industries like pharmaceuticals and information technology. According to the OECD, Ireland has one of the most educated workforces in the world, with roughly 53% of workers between the age 2534 having a third level education qualification, almost 10% higher than the OECD average. Given Corporate America’s never-ending search for talent (notably now with the U.S. labour market nearly at full employment), Ireland’s young, well-educated and English speaking talent pool remains a key competitive edge for U.S. firms based in the country.
Another attraction of doing business in Ireland lies with pro-trade and investment government policies, with Ireland among te most successful nations in the world in encouraging the development of high-value added clusters of enterprise in advanced manufacturing and global business services in industries like data electronics, computer software, medical and healthcare technologies and finance. These sectors are at the cutting edge of growth and innovation, with leading firms increasingly dependent on Ireland’s business environment to drive growth.”