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UCD Clinton Institute for American Studies

Transatlantic Affairs Newsletter
Volume One, Issue 4
January / February 2006

Ireland and the United States

The Irish-American Affiliation

According to the US Ambassador to Ireland James C. Kenny, Ireland and America “have a 150-year relationship” that he intends to see “deepened” and “broadened” by the end of his tenure in Dublin. Of course, for the Irish Government this is a laudable endeavour and one that can only enhance the Irish-American robust affiliation.*

At present, American companies create approximately 5 per cent of all jobs in Ireland, while roughly twenty-five per cent of American green-field investment in the European Union is in Ireland. This is despite the fact that Ireland accounts for just one per cent of the EU’s overall population. Placing the relationship in an international context, American companies have invested about five times as much in Ireland as they have in China.

However, recent statistics point to a somewhat uncertain future. According to the 2005 OECD finfacts, US FDI outflow recently hit a new record of 252 billion dollars in 2004-a rise of over 209 billion from the 2003 figures. However, during the same period, Ireland’s FDI inflow fell from 26.9 billion dollars in 2003 to 14.1 billion in 2004. Against this backdrop, it’s clear that Ireland needs to sustain its attractiveness to American business to remain competitive. While Ireland’s advantageous corporate tax rate is important, Ambassador Kenny argues that it is not crucial to future American investment “Ireland had a zero corporate tax rate in the 1950s and it didn’t attract investment.”*

According to the Ambassador, Ireland’s two central challenges are labour cost and the cost of living. In this context, education levels must be such that it can offset these difficulties.

The Irish government must do more to produce well-qualified graduates. As Ireland “moves up the value chain in terms of the quality of jobs it provides… it is in danger of outgrowing its educational output.”

* In 2004, Irish universities only graduated 16, 429 students, while the economy at large produced nearly 57, 000 new jobs requiring third level qualifications. Irish universities need to produce more graduates. “Irish universities are at a fork in the road. Do they go on and get better or do they become stagnant and stay the same?”*

Perhaps an indication of the Irish governments’ willingness to tackle this challenge is the commitment made in the 2005 budget to invest nearly 1.2 billion euro in the promotion of research and innovation in the Irish higher education sector over the period 2006-10.

*Kenny, James, C. “Are we entering a new era in Irish-American relations?” An interview with Ambassador Kenny by Public Affairs Ireland, July 2005

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The United States and the European Union

The First EU-US Informal Economic Ministerial Meeting

On 30 November 2005, under the UK Presidency of the EU, the EU and US held the first EU-US Informal Economic Ministerial meeting. The Ministerial meeting was designed to discuss transatlantic economic integration and shared economic challenges. This meeting follows on commitments made in the 2005 EU-US Summit meeting and is a reflection of the desire for the EU and US to further enhance an already close and productive transatlantic economic partnership.

The transatlantic economic relationship is the largest bilateral trade and investment partnership in the world. It encompasses six hundred million euro of trade and service each year and provides employment to around 14 million people on both sides of the Atlantic. Agreement was reached to take concrete action to tackle the most significant issues in the transatlantic economy, “including Intellectual Property Rights (IPR), regulatory cooperation, trade and security and improving innovation.”

The participants also recognised the need for further cooperation on the liberalisation of EU-US air services, the Financial Markets Regulatory Dialogue, and further development of the Visa Wavier process for new EU member states, which has been on-going since they joined the EU in May 2004.

* The next EU-US Summit is scheduled to take place under the Austrian Presidency of the EU (date to be agreed).

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A Renewed Partnership for Global Engagement US Perspective on the Transatlantic Agenda for 2006

Remarks by Nicholas Burns, Under Secretary for Political Affairs

From an American perspective 2005 was a productive year for the transatlantic partnership. Much of the acrimonious rhetoric that characterised relations since 2003 has ended and the US and EU having recognised we are “wed together in a long-term marriage with no possibility of separation or divorce” have reconciled and are now focused on meeting the global challenges together. In 2005, the transatlantic agenda shifted “from an inward focus on Europe to an outward focus” and this profound shift will drive the EU and US closer together in the years ahead.

In his remarks at the European Institute in Washington, Nicholas Burns provided a comprehensive list of areas and issues that he believed should provide the central focus of the US-EU partnership moving forward in 2006. While the overarching theme of the address was on broadening the transatlantic partnership through NATO, Burns touched on some specifics, including: working to advance democracy in Russia, Ukraine, the Caucasus and Central Asia. Key to achieving substantive success on these issues was the EU and US working together in every region through political, economic and security partnerships.

According to Burns, 2006 should be a defining year for the NATO alliance, and in this context, the European Union and United States should work together to extend its current mandate to include Africa, Asia and the Middle East. Burns praised the EU’s involvement in the Middle East and Iraq but also urged the EU to continue to play a constructive role in Iraq and the Middle East in the coming year. In his concluding remarks, Burns recognised the need to establish “a strategic consensus on how to engage a rising India and China.”

Burns, Nicholas. A Renewed Partnership for Global Engagement, December 15 2005.

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Diverging paths hurt U.S. and Europe

Bates Gill and Robin Niblett

According to Gill and Niblett, conflicting and divergent EU-US policy and approaches toward the economic rise of China could produce a substantial negative economic and security impact for the Atlantic partnership. The concurrent rise of China’s economic strength, coupled with its military and diplomatic expansion has created great unease among many in Washington and sparked off a resurgence of China-bashing in America. However, at the same time, China is welcoming with open arms many EU trade delegations that are seeking a piece of the economic action in the Chinese domestic market. “The EU has already become China’s leading trade partner, and China is the second-largest destination in the world for EU exports.”

Instead of working with the EU to capitalise on China’s emerging economic growth, Washington has, as of recent years, been preoccupied with preventing the EU’s proposed lifting of their 1989 arms embargo against China.* These efforts involved lecturing the Europeans about the potential security risks that China poses to Asia, “a region across which the US extends important security guarantees and maintains significant numbers of deployed forces.”

However, Europe has also been wary about consulting with the US on their policies toward China, especially in the economic sphere. Moreover, many Europeans believe that the US’s confrontational attitude toward China will create a self-fulfilling prophecy of Chinese militarism. This current situation serves the interest of neither the US nor the EU. According to Gill and Niblett, the “US and European leaders need to put as much effort into understanding their respective policies toward China as they are putting into their bilateral discussion with China.”

*Under continued pressure from Washington, the EU has shelved its plans to lift the embargo.

Gill, Bates and Niblett, Robin. Diverging paths hurt U.S. and Europe. Pacfic Forum CSIS, September 12, 2005. Available on the Internet at

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The United States and International Affairs

Is Washington Losing Latin America?

Peter Hakim

On taking office in 2000, President George Bush stated that relations with Latin America would form a fundamental tenet of US foreign policy. Washington publicly lauded the region’s progress toward democratic governance and capitalist market economies. However, according to Peter Hakim (President of the Inter-American Dialogue) after September 11, 2001, the US effectively lost interest in Latin America. “Since then, the attention the United States has paid to the region has been sporadic and narrowly targeted at particularly troubling or urgent situations.”

Furthermore, support throughout the Latin American region for Washington’s polices has diminished markedly. In fact, relations have diminished so much recently that today relations between America and Latin America are at their lowest point since the end of the Cold War.

The growth of estranged relations with Latin American has augured negatively for Washington. The US has lost support for its wider international agenda in the region and democratic progress is faltering, “in large part because of the dismal economic and social performance in country after country.” Moreover, US energy interests in the region are under threat, especially from oil rich Venezuela and according to Hakim, there is little reason to expect that the situation with Latin America will improve any time soon.

Despite this dismal assessment, there are some US policy initiatives that could help improve hemispheric relations. These include viz: changes in US farm policy that would lower barriers to the regions’ food and fibre exports; a solution to the US immigration problems, which would include a substantial increase in the number of temporary workers granted lawful entry into the US; and a US aid package designed to assist the region in efforts to achieve accelerated economic and social reforms. Unfortunately however, to date the US nor Latin America have demonstrated the will to reach an equitable agreement on any of these important issues.

Hakim, Peter. Is Washington Losing America? Foreign Affairs, January/February 2006.

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Clash of the Titans

Zbigniew Brzezinki and John J. Mearsheimer

In this interesting and reasoned article Zbigniew Brzezinski and John Mearsheimer proffer alternative views on the future of US-China relations. Adopting a more liberal perspective on international relations, Brzezinski argues that China is “almost fascinated, with the trajectory of its own ascent” and “is determined to sustain its economic growth.” As China continues to assimilate into the international system, its leadership, who appear “rational, calculating, and conscious not only of China’s rise but also of its continued weakness” are likely to avoid adopting a confrontational foreign policy approach that would antagonise the US.

Challenging this perspective John Mearsheimer - ever the realist – provides a pessimistic view of China’s rise and ineluctable clash with the US. According to Mearsheimer, “China cannot rise peacefully, and if it continues its dramatic economic growth over the next few decades, the United States and China are likely to engage in an intense security competition with considerable potential for war. As China grows economically it is likely to attempt to dominate Asia the way America controls the Western Hemisphere.

An analysis of the historical record indicates that the US are likely to react negatively to Chinese attempts to dominate the region. “The United States does not tolerate peer competitors.” It is likely America will seek to contain China and ultimately weaken it to the point where it is no longer capable of dominating Asia.

But what about nuclear weapons? Brzezinski argues that surely the nuclear age has altered the fundamental basis of the ‘classic’ realist perspective in international relations, “in a way that was already evident in the US-Soviet competition.”

Great powers are less able to go to war to defeat and enemy who possesses a similar nuclear deterrent without ensuring their own destruction. Professor Mearsheimer responds by positing that the context within which he sees a potential conflict emerging is when China’s economic development has enabled the country to obtain a military strength comparable to the US. In this scenario, the year is 2025 or 2030, not today. In fact, Mearsheimer doubts whether many of the political realities that exist today will be at all relevant in twenty or thirty years time. Hence, Mearsheimer turns to a realist theory of international relations to posit one possible future.

Brzezinki, Zbigniew and Mearsheimer, John J. Clash of the Titans. Foreign Policy, January/February 2005.

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The Blame Game

Stephen M. Walt

“Victory has a hundred fathers, but defeat is an orphan.” The continuing US involvement in Iraq is creating an untenable, unsuccessful and prolonged quagmire. The insurgency remains as effective as ever “and US troops and Iraqi civilians are dying at a higher rate than they were a year ago.”

The on going attempts to establish a stable and peaceful Iraqi State free of ethnic and religious divisions are failing, and public support for the war is plummeting in the US. So, who is to blame for this mess? According to Stephen Walt, politicians and pundits may point fingers at each other, but in the end the “buck stops at the Oval Office.”

In this cogent article Professor Walt stresses the importance of holding “the architects of defeat” responsible. The American people should not be “hoodwinked” by the myriad of after-the-fact alibis that, moderate democrats, administrations officials and conservative pundits have and will continue to offer as rationales to explain the failure and avoid accepting responsibility.

Moderate democrats, who backed the war, now argue that they were misled by the CIA’s faulty intelligence and deliberately deceived by President George W. Bush’s administration. However, given the amount of publicly available evidence that cast doubt on the administration’s case, the moderates who support the war effort “deserve no credit for being so gullible.”

Pro-war hawks allege that going to war was the right path to take, but the “operation was bungled by incompetent leadership in the Pentagon.”

William Kristol (conservative pundit) has concurrently called for the resignation of Secretary of Defence Donald Rumsfeld and the need for an increase in troops levels in order to succeed. According to Walt this excuse is indefensible. Given the nature of division in Iraq the war simply may not be winnable, irrespective of the number of troops America deploy. Moreover, if William Kristol et al thought that the US should have sent a much larger army to succeed, “they should have withheld their support until adequate forces were available.”

The Bush administration, including Secretary Rumsfeld squarely lay the problems on Baathist “dead-enders” and radical jihadis, supported by Syria and Iran. “It’s not the Bush administration’s fault we’re losing…it’s our enemies’ fault.”

However, just as the President was quick to claim credit when efforts were going well, he cannot escape responsibility when they turn bad. President Bush is the commander in chief that authorised the war in Iraq and the buck must stop with him.

Walt, Stephen M. The Blame Game. Foreign Policy, November/December 2005.

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Transatlantic Affair Editor: Frank Groome

If you have any comments or suggestions to improve this service please contact the editor frank.groom@ucd.ie

The William Jefferson Clinton Institute for American Studies at University College, Dublin, www.ucd.ie/amerstud