EU laws threaten US business

US multinational companies are warning that excessive EU legislation is adding to the cost of doing business in Europe.

According to the chief executive of the American Chamber of Commerce, Joanne Richardson, businesses are concerned about excessive legislation coming from the EU and of the threat of tax harmonisation, which could hit the competitive position of American firms in Ireland.

Ms Richardson said Europe is becoming an expensive location for US multinationals.

“We do not want a situation developing where it is easier for companies to locate in developing countries. The objective must be to ensure that any legislation meets public policy goals without distorting the market or placing companies operating in the EU at a disadvantage to those elsewhere in the world.”

She pointed to the recent controversial EU law on chemicals (the Registration, Evaluation, Authorisation and Restrictions of Chemicals Act, REACH) as on example of EU legislation which has the potential to increase business costs.

“Our concern is that it would result in a costly, burdensome and complex regulatory system. This will not achieve the goals of REACH and will be of no benefit to anyone.”

Ms Richardson highlighted the American Chamber’s support for keeping Ireland's 12.5% corporation tax rate.

“There are continual mutterings at EU level regarding corporation tax rates, with some member states suggesting that rates should be harmonised across the Union.

“We believe that the EU must recognise that individual states should be allowed to maintain sovereignty over their tax regimes. Ireland in particular needs to maintain its current corporation tax environment, as it is one of the key initiatives in attracting foreign direct investment.”