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'Little to fear' from a new man in White House -- aide

A former economic advisor to the Clinton presidency has warned that foreign direct investment should remain a modernisation strategy, not an end strategy and that countries not adept at embracing idea-based economies will see reduced job opportunities and income as a result of globalisation.

Speaking to an audience in UCD yesterday, Robert Shapiro, who is also among the advisers to Democratic presidential candidate Barack Obama and a former US undersecretary of commerce, reiterated that Ireland should have little to fear from a new White House incumbent in the most likely guise of Mr Obama.

Among Mr Obama's planned reforms is that tax breaks for companies that send jobs overseas should end, and that public contracts should be awarded to companies that are "committed to American workers".

Mr Obama has previously said he will "level the playing field" for US business by limiting the ability of multinational corporations from using tax havens to "hide income overseas", and "firmly institutionalise the economic substance doctrine so we can stop companies from creating abusive tax shelters". Mr Shapiro said foreign direct investment into Ireland has been fuelled by more than just the low 12.5pc corporate tax rate, and that the usual suspects, including an educated workforce, have been more significant magnets.

But speaking at the same event, Citibank Europe's chief executive, Aidan Brady, said the second biggest cost for most corporations after wages is tax.

"I can tell you, when you lose that tax advantage you can say goodbye," he said.

"We need to make sure we lobby as hard as we can with Obama to make sure that we retain that tax advantage."

Mr Brady has recently forecast that there could be significant job losses in Dublin's IFSC due to consolidation in the financial sector.