Our US love affair may be heading for the rocks

IT’S no secret that our knack of attracting vast wads of inbound investment is the success story of our modern economy. Every secondary school student knows about our debt to the clever clogs in the IDA who exploited the potential of our rocky outcrop on the edge of Europe to piggyback on the prosperity of bigger nations.

The process began in the late 1950s when Taoiseach Seán Lemass and economist Dr TK Whitaker harnessed international trade and foreign direct investment to drive growth, turning our small agrarian country into a thriving manufacturing centre where multinationals employed thousands of university graduates on excellent wages and a service industry mushroomed to swallow up the new spending power.

In that way, a country with no reserves of oil or gas or much in the way of mineral deposits attained a US-style affluence while its more natural bedfellows like Greece, remained poor and relatively primitive. our sunlit uplands have also been darkened by clouds of uncertainty about our vulnerability to changes in tax policies. While these have intensified over the years, they are particularly acute now.

The toughening of international attitudes to our favourable 12.5% corporation tax regime is obvious, particularly since 2016 when the EU ruled that we had given Apple illegal tax breaks and ordered the tech giant to pay €13bn to the country in back-taxes. The ruling was overturned on appeal and now the OECD has taken up the fight for a minimum tax rate internationally.

OUR survival as a quasi-tax haven faces a greater threat from the US with its plans for a shake-up of its corporate tax system to fund its stimulus package. A drastic change in our low corporation tax will be the first-ever litmus test for why Mr Pfizer or Ms Microsoft stay in our lovely country when they could just as easily flit off to India or Islamabad. Or even go back home.

We flatter ourselves about the extras we offer the multinationals that override the financial gains of having a base in Ireland. We never demurred when Enda Kenny

promised we’d become ‘the best small country in the world in which to do business’, thanks to a plethora of innovations to encourage enterprise.

Our unique selling points run from the significant to the trivial: political stability, reasonable environmental standards, a good motorway network, an original pub culture and Lonely Planet once placing us on its list of the top 10 friendliest countries in the world. As the only English-speaking member of the eurozone, we pride ourselves on being a magnet for businesses establishing a base in Europe.

Perhaps Bill Clinton said it best when he told a conference that they’d ‘have to be nuts not to’ invest in Ireland which he claimed was ‘one of the most business-friendly countries in the world, with the youngest, best-educated workforce in Europe’.

Never mind that, time and again, multinationals have rapped us on the knuckles about our schools encouraging rote learning rather

than creativity and problemsolving. All of which we turn a deaf ear to while clinging to the fallacy that our education system is second to none.

To listen to some government ministers in the past, you’d almost believe that the cut-throat multinational sector is here because it likes traditional music and Guinness.

AFTER the false alarms struck by Obama and then by Trump who never really acted on his election rhetoric to bring US investment ‘back home’, it’s ironically Biden, the most sentimentally Irish US president since JFK, who looks as if he really might cut the umbilical cord.

While nothing is certain yet, not even if changes in the US tax regime will be detrimental to our interests, no one is betting on a favourable outcome, or on us not being about to find out exactly where we stand when it comes to the international business community’s regard for the Emerald Isle.

Who knows, we might make the gratifying discovery that their reasons for settling here have genuinely nothing to do with reducing their tax bill and all to do with sharing a common language, Western values and a young population.

Or like the gullible teenager sudBut denly dumped by the highand-mighty football jock, we might have to accept that they were just in it for the sex.

➤➤UNLIKE racing heroine Rachael Blackmore, who prefers to be admired as a jockey rather than a female jockey, Linda Doyle trumpets how she made history as Trinity College’s first female provost. Let’s hope she improves the culture so much that her successor’s gender won’t be an issue.