Multilateral agreement should protect pharma sector from Trump tariffs, Minister claims
Vivienne Clarke
Ireland's pharmaceutical sector will be protected from US president Donald Trump's tariffs under a long standing multilateral agreement, according to the Minister for Enterprise.
However, Peter Burke also said there was a plan in place to deal with any possible US tariffs on the sector.
Ireland is the one of the world's largest exporters of pharmaceuticals, according to the UN International Trade Statistics database. In 2023, the US was the top country for Irish goods exports, with Americans buying products worth €54 billion. Of that, some €36 billion related to pharmaceuticals and chemicals.
Pharmaceutical products are normally excluded from tariffs because of a World Trade Organisation agreement that dates back to 1994. However, speculation is growing that Mr Trump may continue to upend international norms and include pharmaceutical products in any tariffs against the EU.
Mr Burke told RTÉ's Today with Claire Byrne: “We know that the new Trump istration has appointed a new ambassador to the World Trade Organisation. And obviously tariffs are zero for zero. But pharma products are very much contained in a multilateral agreement that was established and dates back a long number of years, and that has always been the case for innovation in that sector. So I think it's very important that that will be protected.
“And also it's worth noting that some of the major companies that are involved in pharma in our country are here for 50, 60, 70 years. And when you consider in of that portfolio, about 67 per cent of all their exports go to the EU and the rest of the world as opposed to the US. So we are pretty diverse in of the portfolio that we have.
“Notwithstanding that I think we as a country always fight protectionism at every hands turn. And as an open economy, we know the challenge that tariffs do present. We've been here before back in 2018 when 25 per cent was put on steel, 10 per cent on aluminium. And obviously we brought in a suite of measures in the context of the EU response. They have been put on hold now and on the 1st of April this year. So we're working very closely and the Tánaiste, Simon Harris, has as well with the [EU] Trade Commissioner in that regard.”
Mr Burke said Ireland had a very diverse economy and should continue to focus on that diversity and work hard to protect the problems that could be controlled.
He predicted that inflation in the US would increase as a result of tariffs which, traditionally, were not successful. Open trade was important and Ireland needed a “strong trading relationship” with the US which meant it would be necessary to negotiate, he said.
“President Trump may change tack here. He may reduce these tariffs. He wants to negotiate. So I think what we have to do is, we have the established mechanism through the Trade and Technology Council and an EU context, we need to work to point out what Ireland is doing and the EU is doing in the American economy.
“So when we go on our trade mission and next week would be key, and focusing on the, you know, there's ten top companies in Ireland employ over 100,000 people in every state right across the US, all 50 states, some very regional locations from CRH to Kingspan, you know, huge amounts of investment going into the heartland.”
“One thing I want to do is really avoid a trade war, a tit for tat.”
Mr Burke also commented on a “very ambitious” Enterprise Ireland strategy to grow Irish businesses and increase exports.
“If you look at the growth that we have contained in the sector many of the targets are just aimed at growing beyond 6 per cent. So I think that's very reasonable considering we have to focus as a country on holding what we have, but also on the growth.
“If we can put an additional 8,000 jobs per annum onto our indigenous sector, grow our exporters to have 150 additional exporters into our economy, increase our research and development spend by 6 per cent, bringing it up to €2.2 billion.
“I think those are very achievable targets because we have so many high value jobs in our economy.
“One thing we're trying to do as a Government now is really control the problems under our jurisdiction, like our competitiveness. And that's why I really want to bring a competitive plan to Government before the next budget. I think that would be a very important priority.”
