CAGE Analysis

Cultural. Ireland tends to be culturally close to the United Kingdom and Europe and this explains why the main trading partners are represented by the UK, the EU and the United States. First of all, Ireland, the UK and the U.S. share a common language, English, which makes trade and commercial cooperation easier than, say, between Ireland and Japan. The ease of communication also encourages companies from the mentioned countries to invest in Ireland and one can notice that the main foreign investors are also the U.S. And the UK. On the other hand, Ireland, similarly to the U.S. And the UK, is an Anglo-Saxon country, with Anglo-Saxon traditions and social norms. It shares similar customs with the UK. Further more, the significant wave of Irish emigres to the United States had an important impact on the evolution of the U.S. And the development of society took account of the influence that the Irish community has had on it. Many U.S. citizens still have an Irish ascendancy and feel a close connection to Ireland.

Administrative. The ties between the United Kingdom and Ireland are still very strong because of the former administrative ties. Ireland has been a British colony for over three centuries and, certainly from an administrative point-of-view, under significant English influence through much of its history. Nevertheless, the conflict in Northern Ireland has tended to stress the relations between the two countries, but this has definitely taken a positive turn in the last couple decade. Ireland is part of the European Union, as a trading and commercial block, which explains why much of the volume of its external trade is done with countries within the EU (motivation here includes lower custom taxes, greater accessibility on the market etc.).

Compared to the United States, as the case study points out, there were more governmental...

The relative closeness in geographical terms with the rest of Europe has meant that most of the volume of trade between Ireland and its partners is done with countries in the EU block. At the same time, the United Kingdom is the most important commercial partners, the small geographical distance playing the most important part in this sense. Nevertheless, it is interesting to note that the United States remains an essential economic and commercial partner for Ireland and one of the most important foreign investors. There are several explanations for this. First of all, in terms of foreign investors, a large number of American companies were attracted by the incentives offered by the Irish government during the late 1980s and throughout the 1990s. This increased the level of direct foreign investment from the United States into Ireland. These companies repatriated most of their income in the U.S. and, further more, many of the products made in Ireland were then resold on the American market, counting as Irish exports into the U.S. This explains why, despite the large geographic distance, the United States remains an important commercial partner for Ireland.
Economic. The Irish per capita income has been constantly rising throughout the last two decades and this has encouraged commercial ties with countries with similar income levels. The reason for this is explain by the fact that now the Irish population can afford more products and services than back in the 1970s and 1980s. At the same time, this has encouraged direct foreign investments from the United States and the United Kingdom, companies from these countries now identifying the Irish market as a profitable, premium market, where individuals could afford more expensive products.