Belfast Telegraph

'America First' policy may trump Northern Ireland's special relationship with US

The President-elect’s protectionism spells uncertainty for our future economic prosperity, writes Ciaran McGonagle

On November 30, 1995, Air Force One touched down at Belfast International Airport. President Bill Clinton’s visit in support of the fledgling peace process at the time represented a virtually unprecedented intervention by a US president into Northern Ireland affairs. It created a precedent. Subsequent visits by both Clinton and his successor, George W Bush, ensured that Northern Ireland maintained a degree of prominence in the US foreign policy agenda.

Under President Obama’s administration, Secretary of State Hillary Clinton continued to build on her strong links with the region, making official visits in both 2009 and 2012. During her second visit, Deputy First Minister Martin McGuinness described Secretary Clinton as a “true friend” to Northern Ireland.

US engagement in the region, particularly during the protracted negotiations leading to the signing of the Good Friday Agreement in 1998, after which it emerged that President Clinton had made a number of quiet interventions in support of the process, represented not only a substantive and meaningful contribution to peace-building in Northern Ireland, but also a symbolic demonstration of how American “soft power” can be leveraged in furtherance of moral and humanitarian causes.

With the election of Donald Trump, one wonders, not only how a future US administration might now engage directly with Northern Ireland, but how Trump’s policies might impact upon the region more generally.

At this stage, it seems almost pointless to attempt any kind of reasoned analysis of the policy objectives of a Trump administration. To an extent almost unimaginable for any presidential candidate, other than a few demagogic pronouncements (“We will build a wall ... Mexico will pay”), Trump has been vague almost to the point of obfuscation on specific policy detail.

In fact, the Washington Post has claimed that, during the campaign, Trump “flip-flopped” on his federal minimum wage policy on 13 separate occasions, at various points being on every conceivable side of what is a relatively simple and binary issue.

Despite this, the thematic narrative running through Trump’s campaign was clear. His promise to “make America great again” and proto-nationalist devotion to the concept of “America First” was an unmistakable call for the reversal of globalisation in favour of nativism and economic protectionism. An idea embraced by the American people and with global sentiment seemingly shifting in a similar direction, the implications for Northern Ireland are worrying.

Throughout the past decade, Northern Ireland has sought to establish itself as an active participant in an increasingly globalised economy. While making limited progress toward reducing reliance on public-sector investment, the Executive has actively sought to take advantage of the desire of multinational corporations to reduce costs by establishing offshore operations in less-expensive jurisdictions.

Belfast has benefited greatly from such foreign direct investment, with a considerable number of companies establishing offices here, creating tens of thousands of local jobs in IT and professional and financial services.

The global uncertainty created by a material departure by the US from this global consensus on trade liberalisation, migration and harmonisation of regulatory standards represents a potentially significant recalibration of the global economic order that has largely prevailed since the end of the Cold War.

Trump, in addition to his pledge to reform US immigration policy and to deport millions of undocumented workers, has called for unilateral revocation and renegotiation of free trade agreements, such as NAFTA, and the slashing of both regulations and tax rates in an effort to repatriate jobs and funds held offshore by US corporates.

If Trump is successful, it is likely to have significant repercussions for economies such as Northern Ireland.

On the economy, Trump’s proposed reduction in corporation tax from 35% to 15% would be a direct threat to Northern Ireland’s long-standing policy objective to harmonise its own rate of corporation tax with the prevailing rate in the south, perhaps even precipitating a global race-to-the-bottom as countries vie with the United States to offer the most attractive economic and operating environment for multinational corporations.

On financial regulatory reform, Trump has displayed his trademark cognitive dissonance by declaring an intention to take a tough approach to Wall Street, while also being broadly in favour of financial deregulation. A repeal of Dodd-Frank, the financial and economic reform bill passed in 2010 in response to the financial crisis, would represent a seismic rebalancing of the current relationship between regulators and regulated financial institutions.

In areas from markets regulation to corporate governance to consumer protection, the power of regulators to maintain supervisory oversight of financial institutions could be curtailed considerably.

In the context of the UK’s impending exit from the EU, this introduces an additional layer of uncertainty. While the European Union, in response to Brexit, has recently mooted a more robust regulatory framework, a bonfire of financial regulation in the US could conceivably result in a geographic rebalancing of the financial services industry as firms move instinctively down the path of least resistance, embracing regulatory relief and perhaps even reducing the need for the extensive back-office, legal and compliance functions that have often found their homes in lower-cost jurisdictions, such as Northern Ireland.

Perhaps most significantly, Trump’s unabashed protectionist and isolationist rhetoric cast doubt on the continuation of existing US foreign policy and the manner in which US soft power may be wielded in future.

Trump has, for example, been equivocal on Nato, arguing that members should assume greater responsibility for their own defence funding and appearing entirely comfortable with the ascendency of an increasingly provocative and aggressive Russia.

On nuclear non-proliferation, Trump has been non-committal, suggesting, for example, that Japan and South Korea would benefit from establishing their own nuclear capacity, rather than relying on the continuing US military-led hegemony that has existed in Asia since the Second World War.

Finally, Trump has demonstrated either ambivalence, or ignorance, toward normal diplomatic protocols by choosing — incredibly — to meet Nigel Farage as his first official meeting with a foreign politician.

Would it, therefore, be reasonable to expect that a Trump-led administration would be as reliable, or dependable, a partner to Northern Ireland as previous presidents?

Might Colum Eastwood’s announcement shortly following Trump’s election that he would deign not to visit the White House while it is occupied by its next incumbent be perceived as an unforgivable slight by a man whose thin skin and propensity toward conflict at times threatened to fatally undermine his presidential campaign?

Much of this is speculation. That we currently know so little from a substantive policy perspective is perhaps the most concerning aspect of a Trump presidency.

While the world awaits in hope, if not expectation, that Trump may walk back some of his more extreme rhetoric, the one certainty appears to be that the process of deglobalisation, which in itself represents a material threat to future economic prosperity in Northern Ireland, has found a powerful, prominent and willing flag-bearer in President-elect Donald J Trump.

Belfast Telegraph

Popular

From Belfast Telegraph