Thursday, 27 June 2019

Questions (7)

Brendan Howlin

Question:

7. Deputy Brendan Howlin asked the Minister for Business, Enterprise and Innovation the percentage of goods and services imported from the United Kingdom; the percentage of goods and services exported to the United Kingdom; the extent to which this has changed since the Brexit referendum in June 2016; and her views on whether businesses here have been able to find new markets outside of Britain. [25219/19]

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Oral answers (7 contributions) (Question to Business)

Question No. 7 is in the name of Deputy Howlin. I will allow Deputy Jan O'Sullivan to put the question. I am sure everybody else is happy with that.

It seems more likely now that we may face a hard Brexit with the change of Prime Minister in the United Kingdom. The question is around the percentage of goods and services imported from the United Kingdom and exported from Ireland to the United Kingdom, and how that has changed since the Brexit referendum in 2016.

I thank the Deputy for raising this issue.

The long-term response to Brexit is for companies across all sectors to become more competitive, more innovative and to diversify their export footprint into more international markets. The agencies under my Department have a wide range of supports available to enable companies to consolidate market share within the UK, and to become more resilient by broadening their sales to other international markets. These include a €300 million Brexit loan scheme for eligible businesses with up to 499 employees and the future growth loan scheme, which will make a fund of up to €300 million available to SMEs for terms of eight to ten years.

CSO trade data show that in 2015, 14% or €31 billion of the total value of goods and services imported into Ireland was from the UK. In 2018, this percentage remained at 14%, although the value increased to €39 billion. The total value of goods and services imported into Ireland increased from €223.1 billion in 2015 to €275.9 billion in 2018.

In 2015, 16% or €37.1 billion of the value of total goods and services exports was to the UK. In 2018, this reduced to 14% or €43.8 billion. Even though the value went up, the percentage came down. In the period 2015 to 2018, the value of total exports from Ireland increased by €77.6 billion or 33%, to a record level of €316 billion.

In 2018, the dependency on the UK as a destination for Enterprise Ireland client company exports reduced to 33%, down from 44% in 2007. While the UK is, and will remain, a major market for Irish companies, expanding the Irish export footprint in markets beyond the UK is a key priority. Against the backdrop of Brexit uncertainty, Enterprise Ireland client companies achieved record levels of exports in 2018 of €23.8 billion. The eurozone region saw growth of 7.6% to €4.8 billion, with Germany, France and the Netherlands each exceeding €1 billion in exports. Exports to North America increased from €3.87 billion in 2017 to €4.08 billion in 2018, an increase of 5.5%.

Additional information not given on the floor of the House

Ministerial-led trade missions support the Government's major drive towards market diversification. These missions are taking place to regions which represent the strongest growth opportunities for Irish exporters. Their focus is on promoting the innovative capabilities and competitive offerings of Irish companies to international buyers in sectors including internationally traded services, FinTech, high-tech construction, engineering, ICT and life sciences.

As well as the global efforts supported by our agencies, key to our success has been our commitment to trade liberalisation in order to open new markets for our indigenous sectors. With a small domestic market, further expansion in other markets is essential to our continued economic growth and, in this regard, Ireland will continue to support the EU's ambitious programme of negotiating new free trade agreements, opening new markets for Irish companies and increasing export and investment opportunities.

I thank the Minister for the information. There is some encouragement, in so far as there is growth in exports to the European market and the US market.

There is concern, and maybe the Minister can respond to this, that the level of imports is much the same as it was in 2015 and while the percentage level of exports to the UK has gone down, their value has gone up. Clearly, we are still very dependent on that market and we face, possibly, a hard Brexit. Can the Minister let me know what is being done to ensure that our dependence on the UK market does not continue to be as high as it is?

Later, in one of my own questions, I refer to research that was done by the ESRI and the Department on imports and exports. The research states that food products are particularly exposed in a relatively high dependence on the UK market because there may be tariffs as high as 18% in a hard Brexit scenario. Much of the foodstuff does not come under Deputy Humphreys' Department but a good lot of it, such as processed food, does. Is there a particular focus on food products, which are at risk in terms of the possibility of a hard Brexit?

Deputy Jan O'Sullivan is correct that food products form a significant part of our exports to the UK. Enterprise Ireland has been working closely with the food companies in terms of looking at new markets for their products, improving their processes and new products. For example, mozzarella cheese is something that is being developed in Carbery. That is a new product to get away from the reliance on cheddar, which, of course, is mainly consumed in the UK market.

Of course, the UK will remain a major market for Ireland, and for Irish companies, because it is our nearest and closest trading partner but we have been expanding the Irish export footprint in markets beyond the UK. That is a key priority for us. Our enterprise agencies are now opening new offices around the world to support our companies in competing and thriving in global markets.

Enterprise Ireland's strategy is to support Irish exporters to be more innovative, more competitive and more market diversified. We have had quite a number of ministerial-led trade missions. The Minister of State, Deputy Breen, and I have been in many different countries promoting Irish companies. I have just returned from a trade mission to New Zealand with a team of Irish agricultural technology, AgTech, companies looking at how we can increase our market share there. Moreover, there has been a specific emphasis on the Asia-Pacific region. We have visited China, Hong Kong and Singapore trying to increase our market share there.

In relation to food, the closer markets are more important in the sense that one does not want to be sending food thousands of miles across the world for all sorts of reasons. Will there be a step-up in efforts to get a greater extent of the market in the European Union and European countries generally?

We are concentrating on increasing our market share in Europe. There is a number of trade missions organised. A number have taken place in Europe but we are also doing more into Europe.

I visited Singapore a couple of months ago, for example, with a company in my own county. We see considerable potential to increase our market share in Singapore because they are particularly interested in food. One company is exporting in the region of 20,000 ducks per week to Singapore.

There are many more opportunities in that market. I was delighted when I was there to be able to open a chain of restaurants called Duckland for this businessman. He has a very successful company. He is focusing particularly on Irish produce and is using his Duckland restaurant chain to sell Irish products because he is very impressed with their quality. We need to continue to look for new markets because they are out there. At the same time, we will continue to trade with the UK. Only recently, I was on a trade mission to Manchester and Birmingham. We need to work more closely than ever before with our trading partners in the UK.