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President's Report 2022


Introduction

It was back in 1962 that, in preparation for the visit of President John F. Kennedy to Ireland the following year, two organizations were created as a measure to build institutional form around a structure to improve the relations between America and Ireland.

One was dedicated to cultural relations - the American Irish Foundation, which has since merged into the American Ireland Fund. Your Council was the other and was aimed at building business bonds between America and Ireland.

We cherish the shared commitments that connect us to our Council mission. During the past year, the Council has enjoyed outstanding support from members and from many benefactors, patrons and sponsors. On behalf of the Council's Board and the entire membership of the organization throughout the United States and in all parts of Ireland, we offer thanks for the support we continue to receive.



Tom Higgins
Council President & Executive Vice President FiServ, Inc.



Economic Relations

Of course, heritage connections don’t always translate into excellent business and economic relations. Investment and business decisions are affected principally by bottom-line financial issues such as taxation, operating costs, red-tape regulatory burdens, quotas, tariffs and other trade restrictions. Investment decisions have never been based on the heritage connections of the CEO or Chairman. The great-grandmother from Mayo may not hurt the investment decision prospects but sound financial basics drive those decisions. At least, that has been our experience. And Ireland continues its established tradition of being a welcoming place for investment from overseas, especially from the United States.


Thus, in economic connections the past year has seen a continued blooming and prospering of the business and investment connections between America and Ireland. And the concentration of American industrial capital in Ireland over a very long time has had a huge impact on Ireland’s economy – consider some basic economic stats in Ireland:


Goods Exports

Ireland is connected into the global supply chain of many U.S. companies. America was the destination for 27% of Ireland’s goods exports. This has steadily increased in recent years from just over 20% in 2003. By contrast, the percentage for the U.K. and the broader European Union has fallen in that period. Big players in exports have been sectors such as chemical and pharmaceutical products, medical devices, aircraft leasing and electrical equipment.


Services Exports

Like for goods exports, American companies selling into other markets from Ireland play a dominant role in Ireland’s total services exports. The buoyant computer services exports are linked to Meta (Facebook), Google, Amazon and other similar entities. A significant component of this has become royalties payment on intellectual property held in Ireland. These now show up in Ireland’s national balance of payments as a fast-growing and recent phenomenon.


Employment

An official figure on the number of people employed by U.S. firms in Ireland is not available, however many private estimates (including our own) show that as many as 200,000 people in Ireland are employed by U.S. firms – which is about one in ten of all jobs in the country.


Commercial Real Estate

Major high-tech American companies have had an outsize impact on Ireland’s commercial real estate market. Four U.S. companies – all high-technology outfits - accounted for six out of the top ten office deals in recent years.


Corporation Tax

 In the minds of Ireland’s economic development planners back in the 1950’s and in the 1960’s, corporate tax revenues were never planned to a be a major tax revenue source for Ireland’s national budget. This is one area where forecasting turned out to be defective. After all, Ireland offered such a sweet deal on corporation tax that the idea was the country would forego any revenue on that front. However, it has turned out differently. Ireland’s ratio of corporate tax to general government revenue is above the European average. It is now over 11% versus the less than 6% European Union average. One glaring weakness here is that 40% of the total corporate tax take in Ireland is by just ten companies.


Of the top 100 corporate taxpayers over half are U.S. firms, accounting for 52% of the take. Did somebody say something about too many eggs in one basket? And the forecast is for this imbalance to grow in future years as accumulated capital allowances are depleted and more U.S. corporate profits are exposed to tax and generate more income to Ireland’s exchequer.


The Pandemic Shutdown 

In last year’s President’s Report, I explained how the pandemic lockdown had severely impacted the operations of our Ireland-U.S. Council in-person programming platform. I also described the plans we had shaped to emerge strongly from those difficult times.


I am pleased to report that tonight we mark the full-year anniversary of our first event following the long shutdown caused by Covid. In the past year, we have successfully staged all our regular calendar of in-person event activities including our Winter Meeting in Florida, our Spring Corporate Lunch in Dublin, our re-launch (albeit on a modest scale) of our cherished Student Work Experience Scholarships Program, and our Annual black-tie dinner events in New York and in Dublin.


At this point, I must quickly add that we would not have been able to find our way through those difficult times without the generous support and important assistance from our Council members and friends in the United States and in Ireland.


It is fair to say that all the elements of our in-person events schedule play an important part in in maintaining the integrity of the Ireland-U.S. Council’s mission and objectives. 

Ireland’s Economy

In Dublin, the major economic worry these days is inflation. This has been seriously exacerbated by an energy crisis, that in Ireland’s case, appears unnecessary. Ireland possesses abundant natural gas resources offshore and onshore. But, there has been a lack of political leadership to access these reserves. Meantime, like elsewhere in the Western world, the price of energy is causing increasing hardship among consumers leading to ongoing political uncertainty.


It’s on everyone’s lips these days in Ireland – inflation at the gas pump and at the supermarket checkout is causing serious financial distress for many households in the country. It’s hardly different in the United States.


 Despite such bad news, however, on the macro level Ireland as a country has never been as economically prosperous. The fast-growing population and labor force indicate strong economic conditions. Ireland’s unemployment rate in the second quarter of this year was 4.5%, the lowest level since 2005. Many economists suggest that this is close to full employment in Ireland’s economy

More on Brexit

Political turmoil in London always causes ripples in Ireland. The economy in Northern Ireland displays worrying overreliance on British Government spending. The lion’s share of people employed in Northern Ireland receive a Government paycheck.


The British Government is now wracked by division on economic policy that are likely to have significant implications in Northern Ireland. The Cabinet in London led by a succession of, count them, three different Prime Ministers in five weeks, seemed to have set eyes on a “supply-side” solution to the problems of inflation, imminent economic recession and Brexit-related trading weakness. Then, abandoned these economic plans causing confusion in the financial markets and serious worry about the future economic prospects.


It is now clear that there will be major Government spending cuts and hikes in corporate taxes which incidentally will make Northern Ireland less attractive for American industrial investment. All of this looks like a shift to an opposite solution based on a “Keynesian” economics model. None of this will be good news for Northern Ireland.


Meantime, the European Union and the United States have continued to make it clear that fresh trade agreements with the United Kingdom post-Brexit will be impossible if there are violations of any elements in the Northern Ireland Protocol enshrined in the Good Friday Agreement. So far, we hear little from London about, for instance, reintroducing border customs posts on the island of Ireland. Time will tell.

A Referendum

Political turmoil in London always causes ripples in Ireland. The economy in Northern Ireland displays worrying overreliance on British Government spending. The lion’s share of people employed in Northern Ireland receive a Government paycheck.


The Good Friday Agreement signed in April 1998 allows for a national plebiscite on the future of Ireland. We in the Ireland-U.S. Council will support activities aimed at building a fountainhead of information and studies aimed at promoting informed opinion in advance of such a referendum. It seems to us that this process has been all but abandoned to one Political Party in Ireland. We hope to encourage positive developments in this area in the period ahead.


American Investment in Ireland

Every year the stock of American operating capital invested in Ireland continues to grow. Today, there are some 900 American corporations operating in Ireland, directly providing some 200,000 jobs and supporting a further 150,000 jobs in the wider economy. Payroll in those companies topped $13 billion while spending on goods and services neared $10 billion with a further $7 billion being invested in capital goods. Total U.S. industrial capital invested in Ireland now tops half a trillion dollars. Ireland exports 75% of its national output. Ireland’s success has been attributed to its business-friendly environment fostered by Ireland’s government over many decades. Low corporate tax rates for manufacturing and service companies that extend well into this 21st century have attracted significant foreign investment. Favorable tax rates are supported by various grants that aid industries looking to either start up or expand a company in Ireland. Ireland has also invested significantly in both telecommunications systems and an effective transport infrastructure.


Ireland’s youth is mostly bilingual and highly- educated overall. Ireland possesses only 1% of Europe’s population yet has been able to lure close to 25% of U.S. manufacturing-industry investments within Europe. Exports account for three-quarters of the national output, a level that is unique in Europe, and makes Ireland arguably the most open economy on earth.

Ireland's Corporate Investment in America

Conversely, employment by Irish businesses in the United States has reached 110,000 and foreign direct investment from Ireland into the United States economy hit $250 billion — ranking Ireland in the top

nine investment sources to the United States. The strong performance of Irish businesses in the United States was accelerated by resilience and preparedness developed in response to the 2016 Brexit referendum. Additionally, Ireland’s considerable strengths in life sciences, construction, engineering, smart energy, smart-city and digital technology enabled Irish firms to support the U.S. government and business roll-out of COVID-19 remediations. According to an OECD report, Ireland is fifth in the world for the export of COVID-19 related products and services and sixth in the global market of countries responding best in terms of innovation to the pandemic.

Council Membership

We welcome new members in our Ireland-U.S. Council family for our mission and activities on both sides of the Atlantic. As a membership organization, we are always eager to greet new members. We ask our existing members to assist in putting out this good word. Our Council mission is an attractive one. As economic relations grow and prosper between Ireland, north and south, and the United States, so too will the economic prosperity of the people on both sides of the Atlantic.

Our Thanks

The business conditions in Ireland and in the United States and between our two countries have clearly improved despite the Covid challenges of the past 18 months. The outlook for the future shows great promise. Our mission is to enhance the business bonds and commercial connections between the United States and Ireland and our efforts are always aimed at ensuring that they continue to flourish. We extend our thanks to all our members, supporters, sponsors, and friends in the United States and in Ireland for their participation and support of our programs and activities this past year. As we head into 2023 and beyond,

it is our hope that you will assist us by sustaining your commitment to that tradition of support and loyalty.

Creating connections since 1963

The Ireland-U.S. Council is the premier platform in the exciting and dynamic trans-Atlantic business universe connecting America and Ireland . This is one of the world’s most rapidly-expanding bilateral relationships embracing billions of dollars in trade, investment and tourism. Embrace connection today for expansion in the future—complete your member application today.

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