WEBVTT - IDA Ireland's Michael Lohan Talks Foreign Investment Challenges

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<v Speaker 1>EU US trade talks are said to be heading in

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<v Speaker 1>the right direction after a meeting between the European Trade

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<v Speaker 1>Commissioner mars Chefsovich and the US Trade representative Jamerson Greer yesterday,

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<v Speaker 1>which Aftervich also warns that the EU was ready to

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<v Speaker 1>defend its interests and negotiations as time ticks down on

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<v Speaker 1>the pause on Donald Trump's tariffs. So how is the

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<v Speaker 1>up ending of transatlantic relations affecting the environment for foreign

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<v Speaker 1>direct investment in Europe? To discuss, we're joined in studio

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<v Speaker 1>by Michael Lowe and CEO of IDA Ireland, the Irish

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<v Speaker 1>government agency charged with attracting foreign investment. Michael, good morning,

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<v Speaker 1>Welcome to Bloomberg Radio. How much more difficult is your

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<v Speaker 1>job gotten since Donald Trump became president?

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<v Speaker 2>Yeah, So I think what you're correc Stephen, you've outlined

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<v Speaker 2>we are seeing a shift in terms of the geopolitical landscape,

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<v Speaker 2>the industrial landscape. But in essence we've actually been seen

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<v Speaker 2>the industrial policy shifting for the last.

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<v Speaker 3>Twenty four months.

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<v Speaker 2>You know, we had the European Chips Act in response

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<v Speaker 2>to the US Chips Act and the Inflation Reduction Act,

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<v Speaker 2>so we've seen a significant change in policy. What we've

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<v Speaker 2>seen in the last six months, particularly is I suppose

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<v Speaker 2>the movement from the US US administration from a tarist perspective.

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<v Speaker 2>So that's in some ways compounding and increasing that level

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<v Speaker 2>of change.

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<v Speaker 3>But it's also important.

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<v Speaker 2>To recognize as well as that, you know, as for

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<v Speaker 2>an FDI perspective, we continue to see FDI investments flow.

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<v Speaker 2>Companies you know, are international by their very nature, and

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<v Speaker 2>by that means by that means that they need international

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<v Speaker 2>markets and international presence, and we continue to see that

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<v Speaker 2>flow happening, albeit that some decisions are taking longer than

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<v Speaker 2>would have here before.

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<v Speaker 1>How much is the uncertainty affecting that our companies simply

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<v Speaker 1>holding off? Are they? Are they pausing conversations with your

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<v Speaker 1>agency about investments?

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<v Speaker 3>Yeah, So I's two things.

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<v Speaker 2>Firstly, I think conversation actually is probably higher now.

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<v Speaker 3>Than it was in the past.

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<v Speaker 2>So I think the relationship and maybe that's where the

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<v Speaker 2>strength of an organization like IDA, where we have a

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<v Speaker 2>long standing relationship with our client companies, you know, So

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<v Speaker 2>that level of engagement, I would say is continues to

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<v Speaker 2>be high, and for us, that's critically important that we

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<v Speaker 2>stay close to our to our clients and to the

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<v Speaker 2>sectors to understand where their concerns are because you're X. Secondly,

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<v Speaker 2>there is has been and continues to be a level

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<v Speaker 2>of uncertainty, you know, and in some ways that uncertainty,

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<v Speaker 2>to my mind, was very much at its peak in

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<v Speaker 2>March April timeframe had possibly moved on as we started

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<v Speaker 2>to see maybe some movements around the tariffs and the

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<v Speaker 2>and the delays and negotiations, and I think we have

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<v Speaker 2>to continue on that trajectory. And from an Irish government

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<v Speaker 2>perspective and an idea perspective, we're very clear that we

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<v Speaker 2>have to continue those negotiations and that's why it's it's

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<v Speaker 2>heartwarming to hear the comments coming from Yester, the discussions

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<v Speaker 2>as you mentioned, and the fringes in Paris. You know

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<v Speaker 2>that we actually get Europe and the US to continue

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<v Speaker 2>to negotiate because the Europe and US relationship is so

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<v Speaker 2>important to the global trade. It's the largest global trade

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<v Speaker 2>in the world, and we need to find solutions, you know,

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<v Speaker 2>and a zero for zero tariff basis is really what

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<v Speaker 2>we're promoting at this point.

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<v Speaker 1>But the EU has also been taking a more as

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<v Speaker 1>a strident response to Donald Trump's tariff threats than for example,

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<v Speaker 1>the UK. Does that put Ireland at particular risk because

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<v Speaker 1>of it exposure in the major investment from US companies

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<v Speaker 1>in Ireland.

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<v Speaker 2>I don't believe it does, and I think it's appropriate

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<v Speaker 2>to do that. I think we have to plan, and

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<v Speaker 2>I think from an Ireland perspective and a European perspective,

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<v Speaker 2>our overarching focus is on negotiation and to get a

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<v Speaker 2>negotiated solution, but we also need to do scenario plans,

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<v Speaker 2>and I think in fairness to you know, at a

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<v Speaker 2>state level, at a European level, it's important we do

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<v Speaker 2>that so we can understand the consequences or not of

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<v Speaker 2>those decisions and we can prepare if that's what we

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<v Speaker 2>need to do.

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<v Speaker 3>But I would say it's even that it's important.

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<v Speaker 2>Like from a European perspective and an Ireland government perspective,

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<v Speaker 2>our fundamental principle is to negotiate, is to get a

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<v Speaker 2>position of mutual benefit. Because if we look at even

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<v Speaker 2>the FDI flows we talked about from Ireland to the US,

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<v Speaker 2>Ireland is the seventh largest investor in the US economy.

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<v Speaker 2>There are almost as many people employed in US companies sorry,

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<v Speaker 2>but Irish companies in the US as there are US

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<v Speaker 2>companies in Ireland.

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<v Speaker 3>So this is a bilateral.

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<v Speaker 2>It supports a two way flow on two where benefits

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<v Speaker 2>and we want to protect that.

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<v Speaker 1>The figure that Donald Trump has been paying attention to

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<v Speaker 1>is the trade deficit in goods, in particular when it

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<v Speaker 1>comes to biomedical and pharmaceutical. That's a very large figure

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<v Speaker 1>when it comes to Ireland. What's your reason of those

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<v Speaker 1>sectors we've been reporting, for example about pharmaceutical companies scaling

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<v Speaker 1>back on office leasing in Dublin.

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<v Speaker 3>What witness or what effects are you saying?

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<v Speaker 2>Yeah, so I think from a life sciences or pharmaceutical perspective,

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<v Speaker 2>we look at that in context, and you're correct that's

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<v Speaker 2>where the largest deficit is in the goods from an

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<v Speaker 2>Ireland US perspective. But also put in the context that

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<v Speaker 2>eighty percent of that deficit is actually an unfinished product,

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<v Speaker 2>so it's actually product that's come back to the US

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<v Speaker 2>where there's further value being added for completion for US

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<v Speaker 2>or international international markets. So it's actually a key component. Secondly,

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<v Speaker 2>the integrity and I think the complexity of global supply

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<v Speaker 2>chains is critically important for life sciences companies in terms

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<v Speaker 2>of making sure they have dual supply and sure they're

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<v Speaker 2>able to have support international markets, and I think that's

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<v Speaker 2>not going to change that. The strength of those supply

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<v Speaker 2>chains is so crearly important to that in industry that

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<v Speaker 2>we believe that will be maintained. Yes, it may well

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<v Speaker 2>be challenged in the short term, but long term, I

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<v Speaker 2>think that's going to be maintained. I think from an

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<v Speaker 2>Ireland perspective, we see investment continuing. Just this year we had,

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<v Speaker 2>for example, ge Healthcare announced just over one hundred and

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<v Speaker 2>twenty million investment in their existing facility in Ireland to

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<v Speaker 2>support international supply chain.

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<v Speaker 3>So investments continue, but.

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<v Speaker 2>You're correct, albeit levels of uncertainty leads to longer decision

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<v Speaker 2>time frames.

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<v Speaker 1>Is it life sciences that you're most worried about investment

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<v Speaker 1>drying up in?

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<v Speaker 3>Well?

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<v Speaker 2>To be honest, I think if you look at the

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<v Speaker 2>tariffs and where they're affected on goods, obviously that's the

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<v Speaker 2>highest persentage from an FDI.

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<v Speaker 3>Perspective in Ireland.

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<v Speaker 2>Obviously there's other sectors that would be our food industry

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<v Speaker 2>as well from an Ireland perspective we need to be

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<v Speaker 2>conscious of and our drinks industry as well. But from

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<v Speaker 2>an FDI perspective, that is the one you know, life

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<v Speaker 2>sciences and medical device both significant in terms of their

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<v Speaker 2>their physical presence in Ireland, the innovation that's happening in Ireland,

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<v Speaker 2>so we're very conscious of that. But we're also very

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<v Speaker 2>conscious and aware of the strengths that the Irish sites

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<v Speaker 2>bring to the global supply chain and the global delivery

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<v Speaker 2>as well. So we have lots of strength to bring

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<v Speaker 2>to that conversation.

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<v Speaker 1>Are there companies that are threatening to pull out that

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<v Speaker 1>you've been working with?

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<v Speaker 3>No, absolutely not.

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<v Speaker 2>And the reason I say that is like these companies

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<v Speaker 2>have invested in Ireland many for fifty sixty seventy years.

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<v Speaker 2>They are embedded in Ireland, they have strong innovation, and

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<v Speaker 2>they're serving global markets. And maybe just to put in

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<v Speaker 2>final context and that if you look at all of

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<v Speaker 2>the experts from FDI in Ireland, eighty five percent of

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<v Speaker 2>those experts exports of goods and services are outside of

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<v Speaker 2>North America serving international markets. So primarily serving outside North America.

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<v Speaker 2>I think that's a key component to remember.

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<v Speaker 1>I want to ask you as well, Ireland as a

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<v Speaker 1>new review mechanism for FDI that came into force at

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<v Speaker 1>the start of this year for sensitive investments from outside

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<v Speaker 1>the European Economic Area.

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<v Speaker 2>Has that been used yet, No, it's certainly just coming

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<v Speaker 2>into force at this juncture. So that's in terms of

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<v Speaker 2>project screening pretty much. It's focused from an FDI perspective. Yes,

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<v Speaker 2>we have to be conscious of it, but it's very

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<v Speaker 2>much about national infrastructure as supposed to maybe mobile investment projects,

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<v Speaker 2>which is it's probably somewhat different. So I don't think

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<v Speaker 2>it's going to have a major impact in terms of

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<v Speaker 2>our investor.

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<v Speaker 1>You're getting many questions about it from clients, not.

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<v Speaker 2>At this juncture, to be honest, it's it's pretty much

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<v Speaker 2>in its early in its early stages of implementation. But

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<v Speaker 2>I think as we go forward it possibly could become

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<v Speaker 2>more to the four. But as I said, I don't

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<v Speaker 2>see it as been particularly onerous from a from an

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<v Speaker 2>idea perspective,