CHAMBER FEATURE GLOBAL TRADE
Making Sense of
Global SHIFTS
The two trends of globalisation and protectionism are at odds in the world today. Will Doyle, Boston College Policy Intern with Chambers Ireland, takes a look at where we’re headed and speculates on how Ireland can fit in.
T
he world stage has experienced a great deal of a change in a very short period of time. In June of last year, 51.9 per cent of the UK voted to leave the European Union, triggering Brexit. A few short months later, in November 2016, Donald Trump was elected President of the United States by 74 electoral votes, despite losing the popular vote by upwards of three million votes. These two events seemed to indicate the start of a dramatic shift in global trends, one towards protectionism and isolation rather than globalisation. Over the last few months, however, there appears to have been resistance to this pattern internationally. In France, Emmanuel Macron defeated the protectionist Marie Le Pen, while the drafters of the Trans-Pacific Partnership have indicated that the deal will move forward even without US support. This is promising news for the EU, and Ireland in particular. As it stands, Ireland may be able to capitalise on the departure of the UK and US from the global stage but ultimately, now more than ever, it needs to commit to a more globalised economy.
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In early July of this year, the EU and Japan committed to a significant trade agreement. The terms of the agreement stand to profoundly boost the Irish economy. The benefits include the removal of tariffs on 99 per cent of goods traded between the EU and Japan, the removal of customs
a similar deal, with equally beneficial effects for Ireland, removing tariffs and sparking new business opportunities. The more Ireland trades with other countries, the better its businesses will fare. The reduced presence of the UK and US on the global stage may provide an opportunity for Ireland to make its presence felt internationally. Brexit will certainly negatively affect Ireland, but there are also some reasons to be optimistic. Many companies are
I reland’s low tax rate and new impending status as the only English speaking country in the EU make it an attractive place for FDI, and a gateway for international business to the rest of the EU.” duties (which cost EU businesses 11 billion a year), and new opportunities for investment in Japanese markets. Together, the EU and Japan comprise 33 per cent of the world’s GDP. This trade deal is an enormous victory for those who believe that free trade benefits all parties involved, and sends a strong signal to protectionists that the world will move on without them. Ireland in particular will enjoy the removal of tariffs, especially with regards to beef, which had a 38.5 per cent tariff prior to the agreement. In January, the EU and Canada signed
leaving the UK to search for another place to base themselves. Ireland’s attractive corporation tax rate and impending status as the only English speaking country in the EU make it an attractive place for FDI, and a gateway for international business to the rest of the EU. The UK’s loss could be Ireland’s gain if Ireland stays committed to globalisation and free trade. As long as the US continues to retreat from the global economy with its trade policies, other countries will be looking to fill the void. As seen with Canada and Japan, the EU and
InBUSINESS | Q3 2017
26/10/2017 16:28