Democratic 2020 U.S. presidential nominee Joe Biden speaks at his election rally, after the news media announced that Biden has won the 2020 U.S. presidential election over President Donald Trump, in Wilmington, Delaware, U.S., November 7, 2020.
Jim Bourg | Reuters
DUBLIN — With Brexit negotiations entering a crucial phase this week, Democrat Joe Biden’s projected U.S. presidential win will be adding a new dimension to the talks.
Speaking on Irish radio on Monday, Ireland’s Foreign Affairs Minister Simon Coveney said that the election result will give “pause for thought” among the U.K. negotiators during what he called the “endgame” in talks.
Biden, who has highlighted his Irish-American roots on many occasions, has stated his support for maintaining the Good Friday Agreement, the 1998 peace accord in Northern Ireland that the U.S. played a role in brokering. As such, he has expressed opposition to any Brexit moves that disrupt that agreement.
“Joe Biden is a real friend of Ireland,” Coveney said on RTE’s Morning Ireland show. “He’s been very clear that Ireland and peace on this island, north and south, means a lot to him.”
Biden, as well as House Speaker Nancy Pelosi, have stated that the U.S. will not allow for a trade deal with the U.K. if peace in Northern Ireland is at risk.
“Statements that have come from not only from Joe Biden but many on Capitol Hill that if the Good Friday Agreement and peace on the island of Ireland isn’t protected through Brexit, that securing a trade deal between the U.S. and U.K. would be very problematic,” Coveney said.
“I think now that Joe Biden is going to be the next president of the United States, I think that will certainly be a cause for a pause for thought in Number 10 to ensure that the Irish issues are prioritized.”
Brexit talks entered yet another crunch period on Monday as the transition period for the U.K. leaving the European Union winds down at the end of 2020. Issues such as fair competition, particularly in fishing, remain points of contention for both sides.
Transatlantic relationship
Brexit is just one of many issues that will be on the transatlantic agenda once Biden and Vice President-elect Kamala Harris are sworn into the White House in January.
Taxation remains a contentious international topic, with OECD talks around digital levies and minimum tax bases for multinationals putting Ireland’s low corporate tax rate of 12.5% in the limelight.
The U.S., under the Trump administration, has opposed European efforts to alter how big tech companies are taxed, and while a Biden White House may change its approach and tone, the debate will continue into 2021.
Changes to international tax standards will have a direct impact on Ireland, which relies heavily on foreign direct investment. The majority of the companies involved are American, including several tech giants like Apple, Google and Facebook.
The Trump administration reduced the U.S. corporate tax rate to 21% in a bid to encourage more U.S. multinational activity in the country. Biden has pledged to increase that to 28% while also imposing minimum taxes on U.S. companies’ foreign revenues booked overseas.
Peter Vale, head of international tax at Grant Thornton in Dublin, said Biden will face some challenges in getting measures like these across the line depending on who has control of the Senate.
“You’re probably looking more at tweaks to the existing regime than fundamental changes but even what those tweaks might look like is still a bit unclear,” Vale told CNBC.
“Both (candidates) have their pre-election pledges and Biden did commit to doing a few things in terms of increasing tax rate and also increasing the tax on groups that had IP overseas.”
He added: “I’m not sure how much of those changes he can get through without having both houses.” As it stands, the Democrats look unlikely to command a majority in the Senate.
In the coming weeks, Biden’s transition team will also take shape ahead of his inauguration. On Sunday, the Irish Times reported that former Connecticut senator and Biden advisor Chris Dodd is in the running to be appointed the next U.S. ambassador to Ireland.
