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27-05-2010

Transatlantic Economy provides opportunity for Ireland to capitalise on growth of US multinationals located here

The economic relationship between Europe and the U.S. continues to generate close to $4.28 trillion in commercial sales each year despite the global downturn.  Ireland has a strong opportunity to capitalise on the growth achieved by US multinationals located here and so increase its share of the transatlantic economy, Joseph Quinlan, Senior Fellow at the Center for Transatlantic Relations at John Hopkins University told delegates attending an American Chamber of Commerce lunch today. 

Mr. Quinlan, who is also a fellow at the German Marshall Fund, said “The importance of Ireland growing the strength of this relationship cannot overstated, particularly in terms of achieving sustained economic recovery.  Ireland was one of the few countries where U.S. affiliates grew their income last year and this was achieved in one of the worst recessionary years experienced by the Irish economy.  Across Europe income generated for these companies fell some 15% last year, but in spite of this Ireland managed to grow these profits by 7%.  Since 2000, income generated U.S. affiliates in Ireland has grown nearly four-fold from $5.8 billion to a record $22.3 billion in 2009. ”

Mr. Quinlan said that the contribution of US trade relations and the presence of US multinationals to Ireland’s economic growth remained undervalued.  “US investment in Ireland between 2000 and 2009 was three times the level of US investment into China and Ireland remains the fourth most popular country for US investment.  Between 1990 and 2007, US affiliate manufacturing employment fell roughly 32% in the UK and 18% in Germany, but soared 30% in Ireland.  That employment, as well as a strong export growth led by US multinationals was a significant contributor to the Celtic tiger economy”.   

Commenting on the outlook for a global recovery, Mr. Quinlan said; “The global outlook remains fragile as we have seen in the past few weeks with the Greek crisis.  The IMF expects Ireland’s economy to decline by 1.5% in 2010 compared to a 7.1% drop in 2009.  While this improvement is welcome, Ireland is still behind the curve in terms of projected global recovery.  The US is projected to grow 3.1% while the Eurozone is expected to rise 1% in 2010.  

“As we all now know, the real estate sector was the Achilles Heel for many nations and Ireland’s economic growth in more recent years was built on this house of sand.   However, given the strong base of US investment in Ireland the country is well positioned to secure a greater share of the transatlantic economic relationship as the US and Europe return to growth”.

Speaking at today’s lunch, Joanne Richardson, Chief Executive of the American Chamber of Commerce in Ireland said:  “Ireland’s drop from 19th to 21st in the latest edition of the IMD World Competitiveness Yearbook should act to focus the minds of all stakeholders on the need to maintain the path of fiscal rectitude.  We cannot deviate from the tough measures needed to restore our public finances and our competitiveness.  Regardless of the strength of the US-Ireland relationship, future investment has the potential to be lost if we do not address all areas of Ireland’s competitiveness.  

“Tax and talent remain two of our most potent competitive advantages and we must continue to protect our 12.5% corporate tax rate and continue to invest in the education of our current and future workers.  We have to benchmark ourselves against the best in the world and seek to attain their high standards.”
 
Barry O’Leary, Chief Executive Officer of IDA Ireland, said; “IDA is engaged with 471 US companies with operations in Ireland employing over 100,000. In 2009 Ireland secured 125 FDI investments, and while still only in the second quarter of 2010 we have already announced a variety of new start-ups, expansions and official openings by almost 20 US Companies.  Dun and Bradstreet, IBM, eBay, PayPal, Hertz, United Technologies, LinkedIn and MSD are just some of the US companies investing in Ireland.  While the competition for FDI remains intense, we remain confident of Ireland’s ability to attract new high quality, value-led investment. ”