Moving away from the apocalypse now unfolding in the British houses of parliament, there are reasons for business to be hopeful that 2019 may work out better than expected, writes John Whelan.
The first glimmers of hope emerged last week across the Atlantic with a cooling off in sabre rattling by the US against the second largest global economy China.
Steven Mnuchin, the US Treasury Secretary, indicated he would scale back tariffs on Chinese goods in return for authorities, there, indicating they would ramp-up purchases of soya beans and other agricultural products as well as a wide range of industrial goods from the US.
More important for European and Irish businesses was the announcement, on Friday, by the European Commission that they were prepared to eliminate all tariffs on trade with the US, in a new free trade deal.
Cecilia Malmstrom, the EU trade commissioner, said Europe wanted to work towards a zero trade tariff deal on industrial goods with the US, something which would have wide implications for many business sectors.
The European motor industry will be particularly affected, as currently it is protected by a 10% import tariff on all cars imported from the US. Whereas the US only charges a 2.5% import duty on European cars entering America.
The US is the number one destination for the EU auto trade, with €40bn worth of cars heading across the Atlantic each year.
The move by the European Commission comes in response to the threat by Donald Trump to introduce penal import duties on European cars, unless the EU buys more goods from the US and reduces the trade imbalance.
Ireland’s agri-food companies will be watching with concern the relentless push by the US negotiators to get free access to the European and Irish markets for their beef.
However, Cecelia Malmstrom emphasised that while Europe was ready to reduce all tariffs on industrial goods, there was no scope for including foodstuffs in the proposed trade expansion deal.
Nevertheless, as soya beans have garnered special mention on many occasions by Donald Trump, the EU committed to further increase imports of American soya beans, rendering the US the main supplier of soya beans to the EU.
Tariffs on transatlantic trade in industrial goods are already low, averaging 4% for goods entering the EU and 3% for goods to the US. The elimination of these tariffs, small and all as they are, would still be beneficial to Irish traders of industrial goods, given the enormous volume of trade between the two economies.
But, of even more importance to Irish traders will be the proposed agreement on regulatory convergence. This will reduce the red tape and bureaucracy around such products as medical devices and pharmaceuticals which are two of the biggest exports from Ireland to the US.
The expected reduction and removal of these non-tariff barriers will be of benefit to both the large US corporations who have manufacturing facilities here, but also the wide range of smaller indigenous companies, who struggle with the two-year plus process of getting approval for sale of their products into the market.
The European Commission must now give the green light to the proposals by the 27 EU member states before negotiations can formally begin with the US.
It is hard to say, given Mr Trump’s bluster and unpredictable negotiating style, if an agreement can genuinely be concluded.
It may follow the route seen where US trade negotiators have managed to agree potential deals with China, only to have them rejected by Mr Trump himself and impose further tariffs. Cutting trade barriers to zero would be an extraordinarily complex political challenge on both sides of the Atlantic.
John Whelan is managing partner of international trade consultancy The Linkage-Partnership.