Peadar Tóibín (Meath West, Aontú) | Oireachtas source

I move:

That Dáil Éireann:

recognises that: — Ireland is the most exposed country in the European Union (EU) to a United States (US) tariffs war, and while a reprieve has been given to the pharma sector, the landing zone on tariffs is still not known;

— a full-scale tariff war will affect Ireland disproportionately, and while Ireland exported €223.8 billion of goods and services last year, one third of these exports, €72 billion, went to the US, of which €58 billion of this is made up of pharmaceuticals and chemicals;

— Ireland is a small open economy, and a fall in international trade, precipitated by the increase in global tariffs, will hit Ireland hard;

— Ireland is potentially facing a fall in employment and job creation, leaving many indigenous businesses, especially in the agri-food sector and drinks sector, badly hit;

— corporation taxes are likely to fall, and future public spending is in real danger; and

— the all-Ireland economy and the Windsor Framework will face significant challenges with differing tariff regulations on each side of the border, and products with integrated North–South supply chains will face major difficulties; acknowledges that: — Ireland's economy is unbalanced, and Ireland is heavily reliant on the foreign direct investment (FDI) sector and has a small, weak indigenous enterprise sector;

— Ireland has become a very expensive location to do business and has the most expensive net electricity prices in the EU;

— Irish firms seeking to grow are often located outside of Ireland; and

— Ireland has capacity shortages in many key infrastructure areas, from housing to transport to energy; and calls on the Government to: — take a stronger and more direct role in negotiating with the US administration, as the stated objective of the US administration is to reduce the perceived trade imbalance between the US and the EU, and seek if this can be addressed while protecting the Irish economy;

— demand that the EU pursues a pragmatic policy of de-escalation;

— ensure that the EU does not make retaliatory tariff decisions that makes a target for the US of key Irish enterprise sectors;

— significantly increase Ireland's diplomatic footprint in Washington DC, with the Republican Party in the US, and in the office of Permanent Representation of Ireland to the EU;

— develop Covid-19/Brexit magnitude supports for indigenous enterprise sectors that will be worst hit, providing export and market diversification supports, and provide increased grant funding for increased research, development and innovation;

— create sectoral taskforces to include relevant stakeholders, including employers and trade unions, and provide adequate income supports to workers who lose their jobs;

— continue to attract and support FDI, but also start to develop a stronger indigenous enterprise sector which is less mobile and less likely to move out of Ireland;

— reduce the reliance of corporation tax in Ireland's enterprise policy by investing in other competitive advantages, such as transport, housing, communications, energy, water and education infrastructure;

— reduce input costs to businesses, such as electricity, property, banking, insurance, and other utility costs;

— review non-human resource regulation on indigenous enterprise, with a view to cutting unnecessary red tape and bureaucracy, which will simplify and speed up the planning process, and improve investment opportunities for growing Irish firms;

— create a better regional and spatial delivery of Enterprise Ireland and IDA Ireland investments; and

— reinstate the Oireachtas Joint Committees on Enterprise, Trade and Employment and on Finance, Public Expenditure and Reform, and Taoiseach immediately.

I am proud to move the first Aontú Private Members' motion in the Dáil this morning. We have decided to use our time as best we can in an effort to make sure we fight for Irish jobs, which are in significant difficulty, fight for the standard of living for families and fight for the economic health of our country. All of these issues are in grave danger today. I believe this is a dark day for world history. It is definitely a dark day for the Irish economy and it has been a shock to many people as to how little time the political establishment has spend on this particular issue since the election. It looks like this particular issue has been eclipsed, in many ways, by the chaos in the Dáil over the last number of months.

Trump's global tariffs come into effect today in many parts of the world and the size and breadth of those tariffs are eye-watering. Absolutely nobody in this Chamber would have believed we would be looking at the size of the tariffs being implemented today. The idea that a 104% tariff is being placed on goods from China into the US is absolutely startling. It completely eviscerates the world economic order for the last 30 or 40 years. The EU is now facing 25% tariffs on cars, steel and aluminium, and the so-called reciprocal tariffs on all other EU goods of 20%. This creates an enormous challenge for so many Irish businesses.

Maroš Šefčovič has threatened to create an EU anti-coercion instrument, the ACI, which could have an enormous affect on US businesses, their services to the EU and their access to public procurement tenders in the future. In fairness to him, the Minister for Foreign Affairs and Trade, Deputy Harris, rightly stated this would be the nuclear option in terms of the tariffs imposed on the world.

Ireland is the most exposed country in the European Union to the United States's tariffs. We have seen a reprieve for pharma so far, but the pharmaceutical sector was targeted again in the rhetoric of Donald Trump last night, which means it is very likely to be hit by a significant tariff in the near future. A full scale tariff war would affect Ireland disproportionately. Ireland exported €223 billion of goods last year and a third of these exports, €72 billion, went to the United States of America, of which €58 billion were made up of pharmaceuticals and chemicals. This is an enormous exposure.

It is interesting if you compare and contrast our exports to the rest of the EU. We exported €81 billion worth of goods to the EU in 2023. The EU is our biggest trading partner but it is not that far off where our trade with the United States is. There is only 12% of a difference. The Irish economy, as it is currently structured, is significantly integrated into the US economy. Ireland is in real danger and in serious trouble if this escalates. Escalation is the enemy of the Irish economy in the trade war with the United States.

We are not only exposed to the US. We are, by our nature, a small, open economy. Anybody who studied economics for the leaving certificate or in university will have learned all about the fact we are very exposed to international trade as well. This increase in global tariffs will affect international trade in a significant fashion. It is estimated that there is a 60% chance of a global recession and this will hurt Ireland hard.

There is no doubt in my mind that we are exposed significantly because of the economy that has been build by generations of Fianna Fáil and Fine Gael governments. The indigenous sector has been the poor relation of enterprise development over the last number of decades and, as a result, we have a massive exposure to FDI. I want to say very clearly that FDI is good, FDI has a significant positive effect in this country and FDI should be nurtured but our dependency on the FDI sector has put us in this over-exposure situation at the moment.

We have another difficult aspect to consider here and that is the all-Ireland economy. As there are now two different tariffs in both parts of Ireland, that means we have an added complexity. In recent years, we have tried to navigate through the Windsor Framework to make sure the all-Ireland economy can function but now we will have a situation where whiskey from Cork has one tariff while whiskey from Antrim has another tariff. There are many enterprises along the Border that have integrated supply chains, which really makes it very difficult to understand how these companies will be dealt with in terms of these tariffs.

The economic vista facing this country is significantly poorer. Unless there is a resolution of this, we could be a looking at a situation not too dissimilar from the economic crash in 2008. We could be looking at situations where we are talking about reduced taxation receipts, reduced public expenditure and the word "austerity" word could be used in the next two or three years. This is how deadly serious the situation we are in at the moment is.

I mentioned FDI and so on but one of the things we have to do is use this situation as an opportunity to reset the Irish economy to a certain extent. I said that FDI was good but FDI is normally used as a transitional economic policy by developing countries. Typically, a developing country would use the FDI to bring in capital and expertise to be able to grow its economy so it can then develop a strong indigenous enterprise. That has not happened. That second element of government policy has never really happened in this country.

As a result, Ireland is very much exposed to the movement of FDI. Indigenous enterprise is stickier, less mobile and less likely to leave this country if the prevailing wind changes. Foreign direct investors are far more likely to leave.

One of the other threats to this country concerns corporation taxes. Again, the Government has really focused on a very small basket of competitive advantages, and that basket contains, primarily, low corporation taxes. It is true that Ireland’s membership of the EU attracts FDI, that Ireland’s being an English-speaking country is useful to US firms and that Ireland has had a well-educated workforce, but the primary tool Fianna Fáil and Fine Gael have used to attract FDI has been the provision of bargain-basement corporation taxes over the years. Fianna Fáil and Fine Gael have made this country a tax haven. In fact, Ireland is considered by the Tax Justice Network to have leapfrogged the Bahamas to become the ninth most significant tax haven, according to its ranking. That makes us a target of the US because Trump sees our corporation tax rate as a threat to his economic model.

Let me show how precarious the situation with corporation taxes is. Ten CFOs are responsible for 40% of the corporation tax paid in Ireland. That is an incredible figure. Considering that corporation tax now represents 27% of the Irish net tax intake and is the second biggest head in tax receipts, and that ten individuals determine 40% of the corporation tax paid, it is startling that we would have such a narrow tax base. We are here all the time listening to the Government on the need to broaden the tax base, yet the reality is that it has become narrower and we have become significantly dependent in our budgetary expenditure on that narrow tax base. That shows how under threat our expenditure will be if we lose the significant elements of the corporation taxes. For sure, manufacturing companies will not leave overnight, but much of the corporation tax is paid on intellectual property and already we are seeing a reduction in intellectual property in Ireland.

Ireland has an incredibly unbalanced economy, so we really need to develop our indigenous sector. We need to build a strong one that is able to compete internationally so we do not have the weakness in the future. How do you build a strong indigenous sector? One of the first things you do is make Ireland a good place to do business. Right now, Ireland is extremely expensive. Irish electricity prices are the highest in Europe and that is hurting foreign direct investors and indigenous businesses alike. Ireland has endless capacity shortages. We have shortages in key infrastructure, from housing and energy to transportation, and these represent competitive disadvantages in business.

Most businesses will tell you they want a number of things. They want low-cost inputs, to be able to transport their products with ease in and out of the market, to be able to communicate properly with the rest of the world, to be able to ensure red tape and bureaucracy do not hamper their development, a good investment environment within the economy, and well-educated people. If most businesses have these, they will be happy to do business in a location. However, we do not have them. The main frustration for so many people has been the incompetence of the Irish Government in making sure the infrastructure in this regard is built.

What we are looking for in this motion is simply for Ireland to take a far stronger negotiation stance with the US Administration. Aontú and I believe Ireland could be a bridge between the US and the EU in terms of the negotiation. We also need to understand what the US wants. The US has a perception that there is a significant trade imbalance with the EU. We have to address that perception to be able to properly negotiate with the US. We also need the EU to be pragmatic and de-escalate. An escalation would be massively damaging to this country. The EU cannot out-bravado Donald Trump. Donald Trump is unencumbered by common sense, political pressure and international convention, so the idea that we can somehow out-bravado him on this, given that he has launched a 104% tariff on China, is absolutely wrong. I actually believe the best retaliation is no retaliation until we properly negotiate what the EU does.

We also need to ensure the EU does not make targets of Irish sectors for retaliatory tariffs. There was a danger regarding bourbon and Irish whiskey, and I am thankful for the efforts the Government has made to knock bourbon off the retaliation target list from the EU perspective. We need to significantly increase Ireland’s diplomatic footprint in Washington DC and the Republican political party. Most of Ireland’s influence over recent years has been on the Democrats. It has been weaker in respect of the Republican Party, and we in Aontú are reaching out to that party at the moment.

We also need to increase the staffing of the Permanent Representation of Ireland to the European Union, which is not at the level that is necessary at present. We need to develop what I would say are Covid- or Brexit-magnitude supports for indigenous businesses to ensure they are ready in those sectors most hit in terms of exports. We need to provide export-diversification supports and ensure relevant firms have the ability to hold on to staff if they go through a period in which income has collapsed. We need to create a sectoral task force where relevant stakeholders, including employers and trade unions, can start to steer its direction. Those stakeholders would have far more knowledge about their own sectors than most people in this House.

We need to continue to attract FDI but we really need to develop stronger indigenous enterprise, which is less mobile and less likely to leave the country. We need to reduce our reliance on corporation taxes by properly investing in other competitive advantages, such as those associated with transport, housing, communications, energy, water and education infrastructure. I am aware that the Government is going to state it has changed the corporation tax system and accepted the OECD’s best formula on corporation tax; however, truth told, the Government was pulled in that direction kicking and screaming. At meetings of the finance committee, I sat in front of Fianna Fáil and Fine Gael Ministers who were absolutely against the idea of changing and regularising our corporation taxes to make them more internationally fair. Corporation taxes are very important.

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