An Irish MEP has questioned the EU’s ability to offer moral or economic leadership after it agreed to a 15% tariff in trade negotiations with the U.S., while the UK achieved a lower tariff of 10%.
Michael McNamara, the Irish MEP for Ireland South, was responding to an opinion piece by former Irish Ambassador to the EU, Bobby McDonagh, who said wrote that “as the world seems to be spiralling towards the unknown, the obvious choice for Ireland’s politicians and people is to reaffirm our support for and commitment to the European Union, which, warts and all, is incomparably better than the alternatives.”
McNamara hit out at the EU’s agreement to a 15% tariff, pointing out that the UK, “whose bargaining position was supposedly weakened by Brexit” had negotiated a lower tariff of 10%.
He said that if the European Union “is at its fundament a trading bloc”, the bloc compared unfavourably with the UK in the tariff talks and asked “how does the EU offer leadership, moral or economic, now?”.
Figures released yesterday showed that Ireland’s GDP shrank for the first time in almost two years tariff blitz sparked a sharp drop in corporate activity.
New trade figures show that Irish gross domestic product (GDP) shrank 1pc in the three months to June 30. GDP in Ireland is is inflated by the significant presence of multinationals, particularly in the tech and pharmaceutical sectors.
Ireland’s GDP had grown 7.4% between January and March as companies accelerated exports to get ahead of expected U.S. tariffs, and the 15% rate now agreed is set to threaten the economy.
Tánaiste Simon Harris has as that the 15% tariff was “regrettable” and said the EU “will continue to work with the US to underline the closely integrated nature of the EU and US pharmaceutical sector.”
But Danny McCoy, the chief executive of the Irish Business and Employers Confederation (Ibec) said that the tariff deal showed Europe’s weakness.
“It’s quite tragic that we are in this situation,” he said. “If Europe had equal strength, it could have confronted the United States.
“US businesses are now favoured coming into Europe without tariffs, and our European businesses are facing 15pc.”
Some commentators believe the lower UK tariff rate could be an incentive for EU companies to shift manufacturing to that country, with Alex Altmann, partner and head of the German desk at London-based accountancy and business advisory firm Lubbock Fine, telling CNBC that “the U.K. could be a big indirect winner”.
“If the tariff rate for the EU finally ends up anywhere near this 30% level then the U.K.’s much lower U.S. tariffs would offer a major incentive for EU companies to shift some of their manufacturing to the U.K. or to expand their existing U.K. facilities,” he noted in emailed comments.