With the looming threat of additional US tariffs over Greenland and EU discussions on retaliatory actions, Chambers Ireland has said that new analysis underlines and quantifies the harmful effect of trade policy uncertainty on investment throughout the European Union.
The latest report by Chambers Ireland and Eurochambres – the association of European chambers of commerce – is based on data from 24 European countries, spanning the past 25 years. The results show that:
- Trade policy uncertainty (i.e. tariffs, trade wars, and other forms of protectionism) significantly harms European business investments
- This negative effect is systematically more damaging to export-oriented countries like Ireland
- The effect grows over time, suggesting that we cannot yet gauge the full consequences of current trade uncertainty
Speaking at the launch of the report, Chief Executive Ian Talbot said that the turbulent international situation has specific and direct economic consequences for Ireland:
“As a small, export oriented economy, we cannot ignore the real threat that trade wars and rising protectionism pose to investment in Ireland. Without investment, we cannot hope for the growth, job creation and competitiveness that businesses need to prosper and maintain their socio-economic model.
Recent global trade developments clearly illustrate these effects. While the signing of the EU-Mercosur agreement last weekend raised hopes of more predictable international trading conditions, benefits will now not be realised until the Agreement undergoes referral to the European Court of Justice. Renewed tensions with the United States are also once again undermining business confidence.
At a time when uncertainty with one of our biggest markets looks set to continue, opposition to Free Trade Agreements like Mercosur must be reviewed by Government. We urge all parties to support efforts to widen our trade relationships to help secure our future.”
More favourable business conditions inside and outside the EU
Eurochambres President Vladimír Dlouhý commented: “Our businesses are caught between a rock and a hard place: on the one hand, export-oriented strategies are being undermined; on the other hand, growth within the EU has stagnated due to regulatory burdens and single market barriers.”
He said that European businesses need more favourable conditions, both within the EU and internationally: “Eurochambres urges EU policymakers to address both sides of this equation, pursuing new trade agreements with like-minded partners in growth markets, while getting to grips with regulatory burdens and obstacles to doing business within the single market.”