Speaker 1: EU US trade talks are said to be heading in
Speaker 1: the right direction after a meeting between the European Trade
Speaker 1: Commissioner mars Chefsovich and the US Trade representative Jamerson Greer yesterday,
Speaker 1: which Aftervich also warns that the EU was ready to
Speaker 1: defend its interests and negotiations as time ticks down on
Speaker 1: the pause on Donald Trump's tariffs. So how is the
Speaker 1: up ending of transatlantic relations affecting the environment for foreign
Speaker 1: direct investment in Europe? To discuss, we're joined in studio
Speaker 1: by Michael Lowe and CEO of IDA Ireland, the Irish
Speaker 1: government agency charged with attracting foreign investment. Michael, good morning,
Speaker 1: Welcome to Bloomberg Radio. How much more difficult is your
Speaker 1: job gotten since Donald Trump became president?
Speaker 2: Yeah, So I think what you're correc Stephen, you've outlined
Speaker 2: we are seeing a shift in terms of the geopolitical landscape,
Speaker 2: the industrial landscape. But in essence we've actually been seen
Speaker 2: the industrial policy shifting for the last.
Speaker 3: Twenty four months.
Speaker 2: You know, we had the European Chips Act in response
Speaker 2: to the US Chips Act and the Inflation Reduction Act,
Speaker 2: so we've seen a significant change in policy. What we've
Speaker 2: seen in the last six months, particularly is I suppose
Speaker 2: the movement from the US US administration from a tarist perspective.
Speaker 2: So that's in some ways compounding and increasing that level
Speaker 2: of change.
Speaker 3: But it's also important.
Speaker 2: To recognize as well as that, you know, as for
Speaker 2: an FDI perspective, we continue to see FDI investments flow.
Speaker 2: Companies you know, are international by their very nature, and
Speaker 2: by that means by that means that they need international
Speaker 2: markets and international presence, and we continue to see that
Speaker 2: flow happening, albeit that some decisions are taking longer than
Speaker 2: would have here before.
Speaker 1: How much is the uncertainty affecting that our companies simply
Speaker 1: holding off? Are they? Are they pausing conversations with your
Speaker 1: agency about investments?
Speaker 3: Yeah, So I's two things.
Speaker 2: Firstly, I think conversation actually is probably higher now.
Speaker 3: Than it was in the past.
Speaker 2: So I think the relationship and maybe that's where the
Speaker 2: strength of an organization like IDA, where we have a
Speaker 2: long standing relationship with our client companies, you know, So
Speaker 2: that level of engagement, I would say is continues to
Speaker 2: be high, and for us, that's critically important that we
Speaker 2: stay close to our to our clients and to the
Speaker 2: sectors to understand where their concerns are because you're X. Secondly,
Speaker 2: there is has been and continues to be a level
Speaker 2: of uncertainty, you know, and in some ways that uncertainty,
Speaker 2: to my mind, was very much at its peak in
Speaker 2: March April timeframe had possibly moved on as we started
Speaker 2: to see maybe some movements around the tariffs and the
Speaker 2: and the delays and negotiations, and I think we have
Speaker 2: to continue on that trajectory. And from an Irish government
Speaker 2: perspective and an idea perspective, we're very clear that we
Speaker 2: have to continue those negotiations and that's why it's it's
Speaker 2: heartwarming to hear the comments coming from Yester, the discussions
Speaker 2: as you mentioned, and the fringes in Paris. You know
Speaker 2: that we actually get Europe and the US to continue
Speaker 2: to negotiate because the Europe and US relationship is so
Speaker 2: important to the global trade. It's the largest global trade
Speaker 2: in the world, and we need to find solutions, you know,
Speaker 2: and a zero for zero tariff basis is really what
Speaker 2: we're promoting at this point.
Speaker 1: But the EU has also been taking a more as
Speaker 1: a strident response to Donald Trump's tariff threats than for example,
Speaker 1: the UK. Does that put Ireland at particular risk because
Speaker 1: of it exposure in the major investment from US companies
Speaker 1: in Ireland.
Speaker 2: I don't believe it does, and I think it's appropriate
Speaker 2: to do that. I think we have to plan, and
Speaker 2: I think from an Ireland perspective and a European perspective,
Speaker 2: our overarching focus is on negotiation and to get a
Speaker 2: negotiated solution, but we also need to do scenario plans,
Speaker 2: and I think in fairness to you know, at a
Speaker 2: state level, at a European level, it's important we do
Speaker 2: that so we can understand the consequences or not of
Speaker 2: those decisions and we can prepare if that's what we
Speaker 2: need to do.
Speaker 3: But I would say it's even that it's important.
Speaker 2: Like from a European perspective and an Ireland government perspective,
Speaker 2: our fundamental principle is to negotiate, is to get a
Speaker 2: position of mutual benefit. Because if we look at even
Speaker 2: the FDI flows we talked about from Ireland to the US,
Speaker 2: Ireland is the seventh largest investor in the US economy.
Speaker 2: There are almost as many people employed in US companies sorry,
Speaker 2: but Irish companies in the US as there are US
Speaker 2: companies in Ireland.
Speaker 3: So this is a bilateral.
Speaker 2: It supports a two way flow on two where benefits
Speaker 2: and we want to protect that.
Speaker 1: The figure that Donald Trump has been paying attention to
Speaker 1: is the trade deficit in goods, in particular when it
Speaker 1: comes to biomedical and pharmaceutical. That's a very large figure
Speaker 1: when it comes to Ireland. What's your reason of those
Speaker 1: sectors we've been reporting, for example about pharmaceutical companies scaling
Speaker 1: back on office leasing in Dublin.
Speaker 3: What witness or what effects are you saying?
Speaker 2: Yeah, so I think from a life sciences or pharmaceutical perspective,
Speaker 2: we look at that in context, and you're correct that's
Speaker 2: where the largest deficit is in the goods from an
Speaker 2: Ireland US perspective. But also put in the context that
Speaker 2: eighty percent of that deficit is actually an unfinished product,
Speaker 2: so it's actually product that's come back to the US
Speaker 2: where there's further value being added for completion for US
Speaker 2: or international international markets. So it's actually a key component. Secondly,
Speaker 2: the integrity and I think the complexity of global supply
Speaker 2: chains is critically important for life sciences companies in terms
Speaker 2: of making sure they have dual supply and sure they're
Speaker 2: able to have support international markets, and I think that's
Speaker 2: not going to change that. The strength of those supply
Speaker 2: chains is so crearly important to that in industry that
Speaker 2: we believe that will be maintained. Yes, it may well
Speaker 2: be challenged in the short term, but long term, I
Speaker 2: think that's going to be maintained. I think from an
Speaker 2: Ireland perspective, we see investment continuing. Just this year we had,
Speaker 2: for example, ge Healthcare announced just over one hundred and
Speaker 2: twenty million investment in their existing facility in Ireland to
Speaker 2: support international supply chain.
Speaker 3: So investments continue, but.
Speaker 2: You're correct, albeit levels of uncertainty leads to longer decision
Speaker 2: time frames.
Speaker 1: Is it life sciences that you're most worried about investment
Speaker 1: drying up in?
Speaker 3: Well?
Speaker 2: To be honest, I think if you look at the
Speaker 2: tariffs and where they're affected on goods, obviously that's the
Speaker 2: highest persentage from an FDI.
Speaker 3: Perspective in Ireland.
Speaker 2: Obviously there's other sectors that would be our food industry
Speaker 2: as well from an Ireland perspective we need to be
Speaker 2: conscious of and our drinks industry as well. But from
Speaker 2: an FDI perspective, that is the one you know, life
Speaker 2: sciences and medical device both significant in terms of their
Speaker 2: their physical presence in Ireland, the innovation that's happening in Ireland,
Speaker 2: so we're very conscious of that. But we're also very
Speaker 2: conscious and aware of the strengths that the Irish sites
Speaker 2: bring to the global supply chain and the global delivery
Speaker 2: as well. So we have lots of strength to bring
Speaker 2: to that conversation.
Speaker 1: Are there companies that are threatening to pull out that
Speaker 1: you've been working with?
Speaker 3: No, absolutely not.
Speaker 2: And the reason I say that is like these companies
Speaker 2: have invested in Ireland many for fifty sixty seventy years.
Speaker 2: They are embedded in Ireland, they have strong innovation, and
Speaker 2: they're serving global markets. And maybe just to put in
Speaker 2: final context and that if you look at all of
Speaker 2: the experts from FDI in Ireland, eighty five percent of
Speaker 2: those experts exports of goods and services are outside of
Speaker 2: North America serving international markets. So primarily serving outside North America.
Speaker 2: I think that's a key component to remember.
Speaker 1: I want to ask you as well, Ireland as a
Speaker 1: new review mechanism for FDI that came into force at
Speaker 1: the start of this year for sensitive investments from outside
Speaker 1: the European Economic Area.
Speaker 2: Has that been used yet, No, it's certainly just coming
Speaker 2: into force at this juncture. So that's in terms of
Speaker 2: project screening pretty much. It's focused from an FDI perspective. Yes,
Speaker 2: we have to be conscious of it, but it's very
Speaker 2: much about national infrastructure as supposed to maybe mobile investment projects,
Speaker 2: which is it's probably somewhat different. So I don't think
Speaker 2: it's going to have a major impact in terms of
Speaker 2: our investor.
Speaker 1: You're getting many questions about it from clients, not.
Speaker 2: At this juncture, to be honest, it's it's pretty much
Speaker 2: in its early in its early stages of implementation. But
Speaker 2: I think as we go forward it possibly could become
Speaker 2: more to the four. But as I said, I don't
Speaker 2: see it as been particularly onerous from a from an
Speaker 2: idea perspective,