Minister for Finance Michael Noonan has played down concerns about expected changes in US tax and trade policy, ahead of a planned meeting with US commerce secretary Wilbur Ross.
Speaking in Washington, Mr Noonan said he was due to hold meetings with Mr Ross, a former investor in Bank of Ireland and a senior figure in the Trump administration, on the fringes of the IMF spring meetings. He is also due to meet IMF managing director Christine Lagarde.
Mr Ross’s department is conducting a review of a number of countries which run a large trade surplus with the United States including Ireland. It is understood that Ireland’s export of pharmaceuticals and medical devices to the US is the primary driver of Ireland’s $36 billion surplus with the United States.
Confident
Mr Noonan said that while he is going to listen to the commerce secretary’s concerns he is confident that “in the general scheme of things they will not have many concerns about Ireland”.
“The way multinationals work is that, as well as having a home base as many of the pharmaceutical companies have, they have regional headquarters. And there aren’t circumstances really where any aspect of multinational America is going to produce everything in the US and export from here,” he said.
He said that companies will always have regional centres. “What we have done is position ourselves to be the regional centre for Europe. For all the reasons that are being recited now on Brexit we are very confident we will retain that position. We’re English speaking, we’re a common law area, we have the European regulatory regime on pharmaceuticals which would apply to sales right across the EU and I think that will continue.”
He will also raise currency concerns, highlighting the fact that Ireland is tied to the single currency. Germany also runs a high trade surplus with the US, an issue that was raised by Ms Lagarde on the opening day of the sprint meetings.
Mr Noonan's discussions take place days after Minister of State Dara Murphy held meetings at the US commerce department on Wednesday.
Repatriation
On taxation, Mr Noonan said he had listened to US treasury secretary Steve Mnuchin speak on Thursday, and that he expected the US administration to introduce some system to ensure the repatriation of profits to the US.
“I was convinced after listening to him that they’re going to have an arrangement for the repatriation of profits or some kind of arrangement whereby a charge is made on the profits whether they’re repatriated or not,” he said, noting that he had put less emphasis on the idea of a border adjustment tax on imports which had previously been mooted by the administration.
He also expected a cut in the US corporate tax rate and a reduction in the personal tax rate.
“That group of issues wouldn’t be of be great concern to Ireland because we know that the movement generally internationally is lower corporate tax anyway,” Mr Noonan said.
The Minister met investors and financial media in New York earlier this week, before travelling to Washington.
Central Bank governor Philip Lane is also attending the annual gathering of finance ministers and central bankers.
