America and Ireland: Common Purpose, Common Goals, Remarks by Thomas J. Donohue President and CEO, U.S. Chamber of Commerce
Certified Public Accountants in Ireland
Royal College of Physicians
Introduction--Our Special Relationship
Thank you very much, Gail [McEvoy], and good evening everyone.
Let me begin by congratulating you on being elected president of this great organization.
CPA is playing a significant role in getting Ireland's economy back on its feet. It is a strong and powerful advocate for public policies that will ensure Ireland remains a good place to do business.
Indeed, its members' services are needed now more than ever to help restore and promote the soundness of Ireland's financial system and help the country stay internationally competitive.
I'm also delighted that the leaders of four organizations essential to Ireland's economic future are joining us tonight:
- Secretary General Sean Gorman of the Department of Enterprise, Trade, and Innovation;
- Barry O'Leary, CEO of the Industrial Development Authority;
- John Whelan, CEO of the Irish Exporters Association;
- And my good friend Joanne Richardson, who runs AmCham Ireland.
Thank you for being here.
This is my second trip to Ireland in four months.
In January I came to assess firsthand how Ireland was dealing with one of its most difficult economic crises in generations.
I am here this week to check on your progress and encourage you to stay the course.
Why are my members so focused on Ireland?
It's pretty simple--we have a vested interest in your success. As of 2009, the United States had $235 billion invested here--more than our total investments in Brazil, Russia, India, and China combined.
In the United States, Irish companies directly employ an estimated 82,000 Americans at over 2,600 locations in all 50 states.
In Ireland, U.S. subsidiaries employ roughly 100,000 people.
The value of trade between our countries exceeds $40 billion.
And let's not forget about our shared values and deep ancestral ties, of which I happen to be a product!
Ireland is also a key player in America's special relationship with its transatlantic partners. In recent years, Ireland has acted as a diplomatic bridge between the United States and the European Union, helping to smooth over differences and solve problems.
Put simply, the United States, Ireland, and the EU are truly interdependent. Both the American and European economies must be successful--or neither will be.
Progress in Ireland
While here in January, we had an opportunity to meet many senior business leaders and key representatives from the outgoing and incoming governments.
Joanne Richardson graciously hosted us at AmCham Ireland.
During this trip we will meet with the Irish Business and Employers Confederation, as well as the finance minister, the deputy prime minister, and Prime Minister Kenny.
Here's the key message I'm delivering: We believe in the Irish economy and the Irish people. You will rise again.
The Irish economy is proving its resiliency in the face of extremely difficult circumstances.
No matter what economist you talk to, all agree that Ireland's economy will grow this year and beyond.
Export growth is already robust and is one of the strongest in the EU. Overall exports grew nearly 9.5% in 2010. They are on target to grow this year and next, when Ireland is expected to post a current account surplus.
This, in turn, is helping boost increased business confidence and investment in plant and equipment.
Ireland also continues to attract foreign direct investment, a key gauge of confidence.
So I can tell you that the American business community still sees Ireland as a good place to invest. There are too many strategic advantages here for global investors to ignore for very long. I'm going to make sure that U.S. companies get the message when I return home.
However, U.S. firms will remain committed to Ireland only as long as it remains committed to its competitive strengths.
Given the pressures you have been under from the EU, the IMF, and the public, it would have been very easy to throw overboard the favorable tax climate that has helped transform this country into a sophisticated hub of innovation, technology, and services.
But instead Ireland has rightly said no, we're not going to squander our most important competitive strengths.
Why is that so important? Because budget austerity, while key, is not enough. The best antidote to sovereign debt is robust economic growth!
We can never lose sight of that--here in Ireland, in the United States, and throughout Europe.
In fact, growth is the only way we can overcome our demographic challenges, meet our social obligations, create jobs and opportunity, and instill a sense of confidence in the future.
That confidence in the future is critical. Without it, the young and the talented will look elsewhere.
The business and governmental leadership of Ireland understand this. We see evidence in the tough decisions that are being made and bold actions that are being taken.
You are strongly focused on recapitalizing your banks, cutting spending, creating jobs, enhancing competitiveness, and rebuilding Ireland's international reputation.
Ireland, in short, is proudly declaring itself "open for business."
We are encouraged by the government's new Jobs Initiative. While its funding approaches can be vigorously debated, the program's priorities are well-placed--encouraging tourism, retraining workers, investing in infrastructure, promoting R&D, and maintaining the countries attractive and competitive corporate tax rate.
And Ireland is not waiting for people to discover its positive attributes. Prime Minister Kenny has been an outstanding salesman for Ireland--and selling is something I know a little bit about.
His whirlwind travel schedule has taken him to America twice and to London, among other places, in less than 70 days.
This week he is leading the welcome to Ireland of the Queen of England--the first visit by a reigning monarch in 100 years. And then, the president of the United States. Not bad!
Perhaps more importantly, Ireland is committed to remaining an innovative and highly entrepreneurial society.
It's relatively easy to start a business here, and entrepreneurial activity is increasing.
One of the greatest advocates for entrepreneurism is CPA.
It has been a staunch defender of the 12.5% corporate tax rate. It has fought to minimize regulatory burdens. And its two reports on regulations and entrepreneurship have added tremendously to the public debate.
All of these things confirm something we've known for a long time--that the Irish economy is based on the resourcefulness, intelligence, and grit of the Irish people, who are well educated and industrious.
That hasn't changed. And that bodes well for your future.
The Transatlantic Relationship and the Future of the Eurozone
So Ireland is facing a full range of challenges, but it is headed in the right direction.
One way we can speed recovery and job creation in both our countries is by taking decisive action to strengthen and expand the most important trading and investment partnership in the world--the transatlantic partnership.
One idea I'd like to suggest is striking an agreement between the United States and the EU that would simply eliminate all tariffs on trade in goods.
This could boost transatlantic trade by more than $120 billion in 5 years. It would generate GDP gains of $180 billion--a budget-neutral stimulus to the American and EU economies.
Our two countries would be among the first and most clear beneficiaries of a zero tariff agreement because so much of our trade is intra-company transfers. Tariffs between us amount to a nuisance tax that simply drives business elsewhere.
And wouldn't such a bold move turn heads around the world!
A zero tariff agreement does not mean we would overlook the important work we must do together to facilitate trade in services, to harmonize divergent regulations, and to strengthen the global financial system.
It certainly doesn't signal any less of a commitment on our part to the global trading system.
It seems like everyone else is negotiating new deals to further expand trade. Why should the largest and most important trading partners in the world--the United States and the EU--not do the same? What are we waiting for?
Expanding transatlantic commerce will drive growth on both sides of the Atlantic.
As I have suggested, growth is the key to resolving the debt crises here and in the United States.
It would help restore confidence and stability in the Eurozone--and this is critical for us all.
The current sovereign debt crisis has led many to question the Eurozone's viability.
Some argue a single currency deprives European nations of too many monetary policy tools to properly manage their economies, recover from crises, and foster long-term growth.
Citizens in many so-called creditor nations resent having to "bail out" the so-called periphery countries. There are protests in the streets in nations enduring austerity programs.
None of that--however understandable--changes the fact that Europe is stronger, more prosperous, and more secure when it is united.
Dissolution of the Eurozone and the common currency would unravel decades of European progress.
Surrendering the benefits of a unified market, the efficiencies of a common currency, enhanced competitiveness, and lower inflation and interest rates would leave Europe poorer, not more prosperous.
It would also undermine one of the Eurozone's signature accomplishments--the free movement of people, goods, services, and capital that have significantly enhanced Europe's competitiveness.
The Eurozone can and must weather this crisis. The steps taken by the EU so far have been appropriate, necessary, and effective. More steps may become necessary as events develop.
I have just come from Berlin, where I met with key business and government leaders, including Chancellor Merkel.
I commended Germany for its vital leadership during this crisis under very difficult political circumstances--which probably wouldn't win me many votes if I were a politician in Ireland!
But I also reminded the Germans that preserving the Eurozone was in their own best interests since so much of their trade, finance, investment, and mutual security and social stability is tied up understandably and rightfully so in Europe.
The United States government and our business community are committed to a strong and united Europe.
An unraveling of the Eurozone and its common currency would have catastrophic economic consequences for Europe, the transatlantic commercial relationship, and the global economy.
We cannot allow that to happen.
Conclusion--Stay the Course!
We understand this has been a very difficult time for Ireland and her citizens. We commend the government and your people for taking tough steps to ensure a better future.
We understand there are difficult days ahead and additional shared sacrifice will be required.
We respect your courage and perseverance. Stay the course!
Remember, Ireland is not alone. All countries are going to have to develop sound policies that meet the needs of their people in a fiscally responsible way--while also maintaining and strengthening their competitive positions worldwide.
It's a difficult balancing act, especially as populations age and demands for health care and pensions grow.
In many ways, Ireland is blazing new trails on the kinds of issues and challenges that the United States and others are struggling to face up to--the need to restrain public spending and curtail unsustainable public payrolls and other entitlement programs. While, at the same time, fostering growth, enhancing competitiveness, and attracting the best talent.
As each of our countries struggle to repair and grow our own economies, we must never forget that our destinies are tied together.
I can assure you that in the United States, the Chamber will remain the strongest champion of keeping the American economy open to Irish ideas and investments.
We will continue to fight policies that aim to punish or penalize U.S. companies that want to do business in Ireland and elsewhere.
Most of all, we will remind everyone that Ireland is, indeed, open for business.
As an Irishman in good standing, I know something about the character of your people. My accent may be Long Island, New York, but my spirit is Irish. I have no doubt you will prevail.
Each of our countries must summon the will and courage to make the tough choices, to take the political risks, and to embrace the sacrifices to build a brighter future.
I know what choices America will make ... and I know what choices Ireland will make. We will choose the future, we will choose to be bold ... we will choose to engage ... and we will choose to lead--together.
For America, Ireland, and the EU, the path to prosperity is a shared one and a path we must walk together. We have a common purpose and common goals.
With that in mind, and knowing there are difficult steps ahead, I will close with that most famous of Irish blessings:
May the road rise to meet us.
May the wind be always at our backs.
I want to thank CPA for the opportunity to be here tonight. And I very much look forward to hearing your questions, thoughts, and concerns.
# # #