Free trade is the bedrock of the Irish economy but it is currently under threat from a range of forces that have the capacity to undermine our prosperity in the years ahead. The most immediate threats are external, but there are also internal tensions which if not confronted could undermine confidence in a trading system which has transformed Ireland from a poor backward economy half a century ago to one of the richest nations in the world today.
Earlier this week the International Monetary Fund, in an update to its world economic outlook, warned that the biggest current risks to the global economy revolved around threats to free trade. It specifically pointed to the dangers posed by a no-deal Brexit, as well as the threat of further US-China tariffs arising from the protectionist policies being pursued by US president Donald Trump. The IMF warned that these adverse developments could sap confidence, weaken investment and dislocate local supply chains, which would severely slow global growth.
Ireland will be hit far harder than most countries by the disruption of international trade. The fallout from Brexit is an obvious danger but the dependence of this State on the current international trade order may not be widely understood. We are one of the most trade-dependent countries in the world and any serious disruption could have a devastating impact on the economy.
Last year, Ireland exported € 316 billion worth of goods and services all around the globe. That represented a massive increase of 74 per cent since 2013 and it played a vital role in the remarkable recovery in the economy following the disaster of the 2008-2010 financial crisis. It was the strength of our exports that kept the State afloat when the public finances collapsed at that time.
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That is what makes the current range of threats to international trade so worrying. Brexit will be difficult enough to cope with, but an international trade war instigated by Donald Trump would make it infinitely worse. Boris Johnson, the new British prime minister, has spent most of his career lauding the principle of open markets yet he appears intent on taking the UK out of the world's biggest one on the worst possible terms. Trump has always advocated protectionism, but the reality of the full impact a trade war with China would have on the US appears to be giving him pause for thought.
The internal threats to Irish trade cannot be ignored either. Through a combination of anti-trade ideology and ignorance, the Dáil by a majority of almost two to one voted earlier this month to reject the Mercosur trade deal between the EU and South American states, whose overall impact on the Irish economy will be strongly positive. It is time the overwhelming benefits of free trade for this country were more robustly defended by those in authority at all levels.