I thank the House for the welcome which has been given to the Bill, and the various Senators who extended their personal good wishes to me, not least from my predecessor. I appreciate it very much. It augurs well for the new Seanad that in a little more than an hour we heard 13 Senators speak. Perhaps the good example will float down the corridor. Even those who have graduated from another place have learned the good habits of the Seanad very quickly. Because so many points were made so quickly I am not certain that I can deal with every one of them individually but I will try to deal with all the major points made and perhaps those I overlook I can deal with privately afterwards, if necessary.
Reference was made by Senator Keating and others to the situation vis-a-vis the Comecon countries. I expressed my views on that point in the Dáil on 13th October at column 374 of the Dáil Official Report. I have nothing to add to those views, which still stand. As a result of what I said in the Dáil on that occasion I understand the Soviet Embassy issued a very lengthy statement of which Córas Tráchtála and CBF disputed the accuracy. I join with them in disputing the accuracy of the lenghty statement that was provoked from the Soviet Embassy. However, I intend that the pressure in this regard should be kept up and I am not without hope that there will be some developments which will make it worth our while trying to keep trade contacts open with Eastern Europe. This might, if developed sufficiently, result in our not withdrawing the trade representation which we have had there for some years past but which has paid so very little in terms of results in the past four or five years. I will not say any more on that point, but I hope there will be developments shortly which will make it worth our while to remain interested in this Eastern European market.
A number of Senators, including Senator Lambert, referred to the role of the Department of Foreign Affairs in trade promotion, and Senator Keating suggested that perhaps they should not have a dominant role or seek to take over CTT's functions in this respect. I do not think there would be any question of that or that that was suggested. I would not feel happy if they should try to do it, but I do not think there would be any danger that they would try. CTT's attitude is that they are very happy to co-operate with the Department of Foreign Affairs in the promotion of trade, as I think the Department of Foreign Affairs are happy to co-operate with CTT. This is particularly so where CTT do not have representation but the Department of Foreign Affairs do.
However, I think it is fair to make the observation in general terms that our Department of Foreign Affairs traditionally have not placed the same importance on foreign trade as some other countries have. The reason is partly explained by the fact that we have a foreign trade promotion body which a number of other countries do not have. For that reason our Department of Foreign Affairs do not have to engage to the same extent as the foreign service of other countries, but nonetheless I would hope that this cooperation will not alone continue but will intensify and grow.
In particular, I have in mind parts of the world where we do not have CTT representation — for example, the entire continent of South America. We have there one embassy, in Argentina. One would like to think that an Embassy in that situation would be able to make a fairly major contribution to the development of trade between the various countries of South America and Ireland.
Senator Lambert pointed out that we do not have trade representation in Northern Ireland. It is certainly a point that I will bring to the attention of CTT, but I think it is only fair to say at this stage that although Northern Ireland is a comparatively important export market for us, it is a market which can be serviced by all our exporters and potential exporters without any great difficulty. Potential buyers in Northern Ireland speak the same language as we do. We can get them on the telephone when the telephones are working. We use the same banks and we share the same island. The difficulties of doing business with them are minute compared with our difficulties in doing business with the Middle East or in the Far East, where language barriers, geographical distances and totally different fundamental customs and ways of doing business render it extremely difficult for the average Irish small exporter operating on his own to make an impact on those markets. He can make a major impact without any great assistance on the Northern Ireland market.
The fact that CTT do not have an office there is not therefore indicative of any lack of interest on their part in the Northern Ireland market. It is simply a recognition that the need for an office there is a great deal less than it is in some of the more remote parts of the world, in particular in the non-English speaking countries. This language difficulty which we labour under was adverted to by a number of Senators, I think quite rightly. It is a serious disadvantage which we have, more so than any other European country. We tend not to be able to speak any language other than our own and this has frightened off many of our people who could otherwise have done a fairly lucrative export market from trying to get into markets outside Britain, and this is one of the reasons that we have historically been so very heavily dependent on Britain.
Though a large proportion of our trade is with Britain, a comparatively small proportion of our CTT representation is there. This is for the same reason that we have not representation in Northern Ireland. The need for assistance to our exporters to the British market is not at all as acute because they do not encounter the kind of difficulties that they encounter elsewhere.
Senator McGowan suggested that CTT might make a greater effort to sell agricultural products abroad. The position is that traditionally, and by agreement with the various bodies concerned, CTT, except in an indirect way, have not tried to promote agricultural products abroad. There are other semi-State bodies, which in some cases are extremely successful, in other cases perhaps less so, engaged in selling Irish agricultural produce abroad. In particular, Bord Bainne come to mind as the outstanding example in that area. Their ability to sell Irish milk products throughout the entire world at competitive prices in an open market is very commendable. They are to be congratulated on the fact that they have been able almost entirely to avoid the fall-back position of intervention when it has come to selling Irish milk products abroad. The CBF have less power in this respect and I do not think it is fair to compare the two bodies for that reason. One would hope that CBF's functions and ability to sell will be increased and that they will be given a greater opportunity than they have had up to now to promote the direct sale by them of Irish beef abroad. The Pigs and Bacon Commission also have been a very successful body in selling pigmeat in various markets abroad.
The attitude of CTT is that the primary responsibility lies with those boards and it would be wrong of CTT in any sense to seek to muscle in. However, I myself saw in the past couple of months at the trade fair in Cologne, which is one of the principal food fairs in the world, the way these boards cooperated with CTT and vice versa in the promotion of Irish food produce. The Irish national stand there was organised by CTT, and various other bodies concerned were represented on it. Collectively it was a very successful effort with a high degree of co-operation between the various interests concerned, so much so that many people there said that they wished all these various bodies and interests could co-operate as well at home as they did abroad. CTT will continue to co-ordinate work of that kind and give all the assistance they can to the agricultural processing industry.
Senator West made reference to the Lomé Convention and to the Irish benefits, or lack of benefits, from the funds made available there. It is worth setting out briefly the position in regard to that. There are three different headings under which firms here can benefit from the funds provided by the EEC under the Lomé Convention. The first two of these are by means of works contracts and supply contracts and these constitute 84 per cent of the fund. They are awarded by public tender and there can be no question therefore of Ireland being given by prior arrangement a certain percentage of them. They have to be won in competition with other Community countries and, possibly, companies from outside the Community. They have to be won on the basis of competitive tender and we have no control over that situation.
On the question of consultancy work, to which 16 per cent approximately of the fund is devoted, a small number of Irish firms so far have got major consultancy work and quite a number of these have been short listed in Brussels. One is hopeful that the numbers in this respect will increase fairly soon. I am also hopeful that Irish firms who have won major competitive contracts in the Middle East, for example, will very shortly be able to achieve similar success in the contracts that are being awarded by tender under the Lomé Convention arrangements.
Senator Harte made reference to the footwear and clothing industries and felt that CTT could perhaps make a bigger contribution to the unemployment situation that has arisen in those industries in recent years, particularly since the advent of free trade. It should be realised that exports are increasing significantly in those fields and that a high proportion of production in those sectors are now exported. I have not got the latest figures for the ten months of 1977 but in 1975 our exports of footwear were £9.6 million; in 1976, £12.3 million and the trend for this year appears to indicate a continuing growth, notwithstanding the difficulties we are under. The trend in textiles is the same because exports have increased from £79 million in 1975 to £118.3 million in 1976.
This morning I met a deputation from the Irish footwear industry, representatives of the unions and the firms concerned, and we discussed these problems in some detail. I am familiar with the problems and certainly will give any assistance I can. In the course of the discussion I urged strongly on the people present that the best future for the footwear industry, to my mind, appeared to lie in export markets. I am very much at one with Senator Harte in advocating that again this afternoon. We have had an unfortunate situation in that 73 per cent of our home market in footwear is now accounted for by imports. The figure was about 35 per cent before our entry into the EEC. Nonetheless about 80 per cent of those imports, of leather shoes at any rate, are from the UK. They are not from the Far Eastern countries which are frequently blamed for these difficulties. Quite bluntly, there is not a great deal we can do about imports from the United Kingdom, whether it is of shoes or anything else.
The industry may well come round to the view — many of them already have—that its greatest hope for the future is in a positive policy of exports rather than trying to regain a higher proportion of what is a very tiny home market. We have only 3.1 million people and that was our home market in everything until 1st January, 1973. The great thing that happened from 1st January, 1973, is that our home market is today 260 million people. If one goes into a common market one has to accept at least the competition of one's fellow members of that common market. On balance we have benefited enormously by being in a common market. We have given our own people the opportunity to expand which they never had before and we have had the opportunity since 1973 to create employment on a very wide scale, something we never had when we were trying to sell to three million people.
While I know it is difficult for industries like the footwear and clothing industries to adapt as rapidly as one would wish them to adapt to this fundamental change, some of the firms are adapting and have done so extremely well. One footwear firm, for example, in Kilkenny is now exporting more than 80 per cent of its output and is increasing its output enormously each year. Of course, it is also increasing its employment considerably as well. That is where the future is and where the stability of employment will lie in firms of that kind. I hope smaller firms can be helped and encouraged to develop in the same way and not to think of the potential market for footwear as simply 3.1 million people in the Republic of Ireland but to think of it as 260 million people in Western Europe.
Senator Mulcahy very forcibly made the point that there is a tremendous connection between exports and jobs. That is something many of us tend to overlook because we do not see the connection at first sight. There is no doubt that a high proportion of employment in Ireland today exists only because the firms giving that employment are selling abroad. If they were to lose their export markets the employment would be gone. For a country — I come back again to our minute population by comparison with so many of our neighbours — of 3.1 million people, the future of employment and growth lies almost exclusively in the export market. One cannot emphasise that too much. Where we are anxious to increase employment, we must in the same breath in practice almost invariably be anxious to increase exports too.
Senator Mulcahy referred to the need to have more Irish men and women abroad actually selling. There is a small side to CTT's operation, which was not referred to in today's debate in this House, but which I referred to in the Dáil and which is, perhaps, worth referring briefly to here, and that is the Irish Export Agency. It was established a few years ago to go out and do the actual job of direct selling which CTT have not done traditionally because they have been a promotion body rather than a direct selling body. That agency was started a few years ago on a limited scale on behalf of very small firms in distant markets, mainly the Far and Middle East. It has been extremely successful and I have — as I said in the Dáil — encouraged CTT to think in terms of expanding it without interfering with their basic objectives as a promotional body.
I do not think it is right that Irish exporters or potential exporters should get the idea that because there is a public export board here the whole question of selling abroad should be dumped on to that board with the kind of attitude: "Let the Government do it; exporting is something for the State to do." That is not so and CTT would not wish that impression to go abroad. The primary effort to to sell abroad must be the effort of the companies themselves. CTT will give every assistance available to them in that effort but the primary moves in that regard must come from the companies.
I recognise, and CTT do, that it is not always feasible for a very small Irish operation to sell in a distant market and in what to them is often a very difficult market with language and travel difficulties and totally different customs in every sense of the word from what we have here. Where very small firms are involved it is a very good thing that there should be some selling agency for them. There is another selling agency, something on the lines of the Irish Export Agency, which was set up in which the State have a 20 per cent interest and four major firms in Ireland have a 20 per cent interest also. That has not got off the ground as quickly as one would wish but I hope it will increase its activities in the years to come and that it will perform the same kind of function as the Irish Export Agency is. There is no question of their being in competition with one another. The world is big enough for the two of them to co-exist and proper for the benefit of all others.
I have covered some of the main points made in the debate and I do not wish to delay the House by going into any of the other points in any great detail but before I conclude it is appropriate that I should at this stage — although it was not mentioned by any Senators in the debate — make reference to the recent refloating of the pound sterling and the effect it might have on Irish exports. The situation is not a serious one from the point of view of exports. Obviously, some of our exports are not directly helped by this. They are marginally put at a disadvantage; but I would not like exporters, or the public at large, to feel that Irish export industries were in any sense seriously damaged by what happened in Britain on Monday and Tuesday. There are, of course, some obvious advantages to us in other areas. The inflationary situation will be marginally helped in the long run by the floating upwards of the pound as against the other currencies. However, so far as exports are concerned, a little over 45 per cent of our exports are into the sterling area anyway. To start off with they are not in any way affected, notwithstanding the statement the other night by a prominent Member of the Labour Party to the effect that our exports to Britain were put at a disadvantage. Something over 45 per cent, therefore, of our exports are in no way affected by this and we must think of something less than 55 per cent which potentially could be affected.
The revaluation has been something in the region of 4 per cent or a little above that, but it does not necessarily follow that our products in the 54 or 55 per cent non-sterling area will have the full impact of that passed on to them. The first reason for that is that a lot of our exporting manufacturers are already quoting and selling in the currency of the market rather than in sterling and they are not going to be directly put at any disadvantage at all. The revaluation is comparatively small and in many cases it will not be found necessary to pass it on either by the wholesalers or distributors. In some cases some of the manufacturers can absorb the difference, having had the benefit of movement in the opposite direction over the past couple of years.
In summary, therefore, I do not think our exporters need feel that any serious damage is done to them because while the £ is today at 1.86 dollars approximately, which seems quite a long way away from 1.58 dollars as it was for a few days 14 months ago, nonetheless, at 1.86 dollars our exporters are in a much stronger position than they were, say, two-and-a-half years ago when the £ was standing at well over 2 dollars. As the House is aware it stood at that, or at higher figures, for a long period. We are still at an advantage relative to the situation as it existed two or two-and-a-half years ago. Therefore, our export figures which have been very good over the past couple of years and which have been helped by the movement against sterling, will not be jeopardised to any significant degree by the relatively small movement in favour of sterling. I referred to this in my reply to the Dáil debate as reported in the Official Report, column 373 of 13th October and I indicated that I thought this might happen and that it was something we would have to bear in mind. It has happened now, but the volume of effective revaluation has not been so great as to create any major problem for the great majority of our exporters.
I should like to thank the Seanad for the welcome given to the Bill and for the useful, constructive and helpful speeches made on it.
