Wednesday 24 August 2016

Jobs are the priority and a free trade deal with the US would bring enormous benefits

Published 20/06/2014 | 02:30

A Dublin Stevedore
A Dublin Stevedore

THE solution to an employment crisis is job creation. Faced with a drought, the response is pretty simple – the first thing you do is source water, as much of it as possible, as quickly as possible, from anywhere it is available.

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Similarly in an employment crisis, the top priority is to create jobs, as many of them as possible, as quickly as possible, from as many different and sustainable sources as possible. And if an opportunity for job creation comes along, you grab it with both hands.

That is the approach that this Government has taken through our Action Plan for Jobs since assuming office in the teeth of a jobs crisis in March 2011.

Thankfully many of the sources we have tapped are starting to deliver results, with 70,000 jobs added in the past 18 months from a range of sectors and virtually in every region of the country. But with 260,000 people still unemployed, we have a long way to go.

Across Europe the challenges are similar. But at a time when government budgets across the continent are in difficulty, sources of jobs growth are not easy to find; 1930s-style massive public stimulus is not an option.

In that context, increasing trade and exports must be a key focus.

That is why in Ireland we have provided new supports for our exporters, for example doubling the number of trade missions, and we are seeing the results, with 12,000 jobs added in exporting companies in 2013.

At a European level, we are pursuing free trade agreements between the EU and other parts of the world. According to official estimates, two million jobs could be created across the EU by a range of such agreements currently in negotiation. This is an opportunity we must seize.

The most important of these potential agreements is between the EU and the US.

Given Ireland's particularly close economic relationship with the US, such a partnership holds out particular gains for Ireland.

Five hundred US companies employ over 100,000 people in Ireland, while Irish companies export over €1bn in goods and services to the US every year, in sectors such as food, life sciences, business services and ICT.

Research by Copenhagen Economics, published today, estimates that a comprehensive trade agreement would add 1.1pc to Irish Gross Domestic Product (GDP) – a massive gain and one that is much needed at a time of economic difficulty. This would equate to approximately 8,000 extra jobs here.

A comprehensive agreement would not only remove tariffs – direct charges imposed on EU companies seeking to export into the US and vice versa – but also non-tariff barriers, like differences in regulatory requirements or certification methods on each side of the Atlantic.

These impose indirect costs on exporters trying to sell their goods and services across the Atlantic by requiring them to comply with two different sets of regulations, which are in fact far more costly than tariffs.

While there are always winners and losers in free trade agreements, the overall impact is overwhelmingly positive – in this case 400,000 additional jobs across the EU and the benefits in Ireland are even greater, more than double the average across the EU.

The Copenhagen Economics analysis shows that gains to Ireland would come from the removal of tariffs and non-tariff barriers on both goods and services. Sectors which stand to benefit in particular include pharmaceuticals, ICT, food and manufacturing – crucial parts of the Irish economy, major employers, and areas which we have targeted for employment growth as part of the Action Plan for Jobs.

Last year, during Ireland's EU presidency, we pursued this as a top priority. Under my chairmanship this time last year, we managed to secure agreement among the 28 member states to formally open negotiations with the US on a broad and comprehensive agreement.

The negotiations are now effectively in the hands of the EU Commission and they are proceeding well, with five rounds of talks having taken place.

Today in Dublin, my department is organising a conference to update business people, farmers, trade unions and other groups that could be affected by a free trade agreement about its potential impacts on the Irish economy. The EU's chief negotiator for these talks, Ignacio Garcia-Bercero, will also be present and will provide an update on the progress of negotiations.

The crisis is not yet over. Although we have made progress in job creation in the past 18 months, many people are not yet feeling it and far too many people remain unemployed.

In Europe, just as in Ireland, job creation is not only crucial as a response to unemployment and emigration, it is also the most effective response to austerity, since increasing numbers of people at work leads to increased taxes and decreased social welfare payments.

We need to pursue any possible source of employment with single-minded determination.

A comprehensive free trade agreement between the EU and the US would bring huge benefits to Ireland and I believe we should do everything possible to support its early conclusion.

Richard Bruton is Minister for Jobs, Enterprise and Innovation

Irish Independent

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