Seismic changes are going on in world geopolitics, as a new administration starts in the US, while in Europe, Brexit foreshadows a changeable environment that inevitably will impact markets for IFS and indeed the entire Irish economy. That future will be far different from the simple world of the 1930s and 40s when Ireland was a small agricultural backwater in north west Europe that mattered little from a strategic political point of view. Political neutrality and ‘keeping the head down’ brought the Republic through WW2 with few of the negative outcomes that affected people elsewhere. But now, because of Ireland’s success as a trading nation in a more interconnected global economy, globally relevant issues must be addressed by the more globally influential country that Ireland has become. And stands taken.
Ireland has in recent years been in the process of articulating a coherent policy in the area of global tax policy, as it is now in the area of the legal framework of EU27 as it champions the values of common law principles within and beyond Europe.
Ireland’s success in aircraft leasing is another area where such wider global contact is inevitable. This has occasioned contact, and potential disagreement with China, as evidenced by an exchange of letters between President Michael D Higgins and President Xi in recent weeks on the issue of the refusal of a Chinese judge to allow an Irish leasing executive to leave the country.
There are others. There is no trade agreement between the EU and the UK governing financial services other than an aspiration to ‘equivalence’ towards which both sides to date are showing signs of ambivalence. This has all the potentialities of evolving in a negative direction, unless there is discussion and engagement between the EU and the UK in a cooperative and constructive dialogue - one that recognises the validity of competition between jurisdictions, but which also ensures that it is conducted on a level playing field that is fair, i.e. equivalent, and, in recognition of some common international legal principles of agreement.
Such tensions all have the potential to grow beyond levels they should. The lessons of the intolerance and inhumanity of the 1930s and 1940, across the world, should not be forgotten. Back then, Churchill, said ‘meeting jaw to jaw is better than war’. Going forward from this, and using sports analogies that we teach children, we can contest, and compete, instead of fight.
Fast forward 80 years, to a book, ‘Battlegrounds’, about US foreign policy in the current era published at the end of last year by former US National Security Adviser in the White House H.R. McMaster, (who resigned after 13 months in 2017). In it he writes, about China: ‘Competition should aim to convince Chairman Xi and party leaders that they can achieve enough of their dream without doing so at the expense of their peoples’ rights or the security, sovereignty, and prosperity of other nations’.
Such a third way, beyond appeasement, and beyond war, is competition. It is a concept that Ireland has discovered as a key to its success in its international economic policy strategies, notably in the tax sphere. It can be embraced in other areas, including financial services, human rights, and the rule of law.