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Esmond Birnie

Whatever the result, the US will continue to play a key role in our economy

Esmond Birnie


Joe Biden and Donald Trump (Andrew Harnik/Elise Amendola/AP)

Joe Biden and Donald Trump (Andrew Harnik/Elise Amendola/AP)

Joe Biden and Donald Trump (Andrew Harnik/Elise Amendola/AP)

Biden or Trump, Northern Ireland's relationship with the US will remain important economically, even though America may continue to suffer an economic decline relative to China.

This year, the US was Northern Ireland's second largest market for exports and imports, behind the Republic of Ireland.

The US also remains the largest source of foreign direct investment here.

In 2020, 29,620 people were employed in US-owned businesses, up from 25,700 in 2016.

Those figures would suggest about 4% of all employees in Northern Ireland work in American firms, a conclusion reinforced by the recent transfer of Bombardier into US ownership.

In 2020 there were 220 US-owned businesses, an increase from 190 in 2016.

Admittedly, in terms of the number of foreign-owned firms, the Republic of Ireland has a bigger presence in Northern Ireland (305 in 2016 and 270 in 2020), but on average those firms are relatively small.

The total employment in Republic-owned firms in 2020 was 15,335 - about half that in American companies.

So, the US makes a very sizeable and welcome contribution to our economy. That will almost certainly continue regardless of US political turbulence.

In the longer term, it is important to recognise that the US is an economy in relative decline. Donald Trump's campaign slogan, "make America great again", may have been well chosen in political terms, but it is far from clear that his policies were all that successful in making the US great again in economic terms.

The latest IMF figures indicate that US economic growth in terms of GDP per capita averaged only slightly higher during the three Trump years at 1.9% annually, compared to the previous four Obama years (1.6%).

That leaves out the serious recession in 2020 related to the impact of the virus. One estimate is that the US economy is likely to contract by 4.3%, compared to 1.9% growth in China.

And that's the point - during the Trump administration, notwithstanding tariffs and a trade war, the US continued to fall behind China. By the most reliable measures, the Chinese economy was already larger than the US one in 2014, and by 2019 represented 19% of total world GDP whereas the US share was 15%.

Does all this matter to Northern Ireland? Well it does.

Whatever Tuesday's result, the economic-military contest between the US and China will probably intensify. Chinese investment here has increased. Although the latest official figures suggest only 10 Chinese-owned firms operated here in 2020, some are relatively large employers.

London's decision to exclude Huawei from 5G shows how there may be strategic sectors where a decision is made that we can no longer afford to rely on Chinese investment.

Esmond Birnie is a senior economist at Ulster University's Business School

Belfast Telegraph