Joint Committee on Foreign Affairs and Trade díospóireacht -
Wednesday, 29 Apr 2015

Trade between Ireland and ASEAN Countries: Irish Exporters Association

Chairman

I apologise to the witnesses for the slightly late start but we have just some lengthy discussions on a number of issues. We are delighted welcome Mr. Hugh Kelly, president of the Irish Exporters Association, and Mr. John Nevin, chairman of the Asia trade forum of the Irish Exporters Association, to discuss trade links with the ASEAN countries. The purpose of this meeting is to provide a greater understanding of trading between the ASEAN countries and Ireland and the possibility of further inroads in developing trade to a market of more than 600 million people. There are 500 million people in the European Union and yet there is huge potential in the ASEAN countries. We will have an opening statement from Mr. Kelly and we will then take questions from members.

I remind members and those in the Visitors Gallery to ensure their mobile phones are switched off completely for the duration of the meeting as they cause interference, even when on silent mode, with the recording equipment in the committee rooms. I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against any person or body outside the Houses or an official either by name or in such a way as to make him or her identifiable. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the joint committee. If they are directed by the Chairman to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the matter of these proceedings is to be given and they are asked to respect the parliamentary practice that where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him or her identifiable.

I call Mr. Kelly to make his opening statement.

Mr. Hugh Kelly

To set the scene, I will explain the basis on which we are making our submission. I note many members will know about the Irish Exporters Association but it is the independent representative body for all exporters and we offer a range of practical help and support to Irish exporters under three main pillars. We act as the voice of the Irish export industry, we are a source of practical knowledge and we are a connecting force for Irish exporters. What sets us apart from some of the other agencies which act in this space is that we represent the whole spectrum of companies within the export industry, including SMEs, which are beginning to think about exporting for the first time, right through to global multinational companies, which are already exporting extensively from Ireland.

The Asia trade forum was an initiative we established within the IEA in 2011. Its strategy supported a clear vision to help promote and increase two way trade between Ireland and Asia. It was funded by partners from the private sector such, as Ulster Bank, Etihad and FCm Travel Solutions. The forum was, and continues to be, a successful example of collaboration between the private sector, led by ourselves at the IEA, and the Department of Foreign Affairs and Trade and State agencies, in particular, Enterprise Ireland.

We all want to see Ireland emerge as one of Asia’s preferred trading partners. In 2011, only 4% of Irish exports went to Asia compared to exports of between 20% and 25% which went to our EU neighbours. We suggested a target of 8% by 2016. We set out a plan and learned from it. There were three elements to our strategy. The first one was to help Irish businesses to get to know Asia better and for Asia to get to know Ireland better. The second was to connect experienced practitioners to inspire and assist others to realise their potential in the markets and to build efficiently on their success without repeating too many failures. The third was to highlight to Government the obstacles to Irish trade growth and to work closely with policymakers and State agencies to remove them.

What have we learned and what have been our successes? More than 1,000 companies have attended and participated at Asia trade forum events over the past four years. We have organised business visits to China, Malaysia and India and we have worked with the Asia-Pacific Irish business forum to increase collaboration. We have also worked with local chambers in Asia to unlock what we believe are powerful networks for Irish businesses. We have also supported and worked closely with UCD, UL and UCC on student programmes to increase knowledge of Asian languages, culture and business. With some success, we have helped lobby for improved visa access for Asian visitors.

Most important, and something from which we have learned, is that these initiatives have introduced practitioners to practitioners and provided a soft introduction so that off stage they can then talk one on one and share real stories about what they have done in Asia.

They can talk about the mistakes they have made. We all learn far more from failure than we do from success, or apparent easy success. That is a key element and an important point to consider in any initiative in which we are trying to learn from each other. We are delighted that by the end of 2014 Ireland's total exports to Asia passed the 8% target. We hope and believe we have played a part in that. There is room for much greater growth in our trade with Asia. New Zealand is an example of that and we want to champion and work with Government to achieve more ambitious goals and to develop and extend that Asia trade forum template.

We have a unique opportunity to reflect on the successes, feedback and learnings that we have gleaned from the past four years and to target more effectively opportunities in the emerging ASEAN bloc. While much of focus on trade with Asia to date has been on China, most Irish exporters are SMEs. Certain markets in the ASEAN bloc are arguably more accessible to SMEs than the larger single Asian markets. I have done business in Asia for more than 20 years, in India, China, Japan, Korea, Singapore, Malaysia, Indonesia and Thailand and what those experiences have highlighted to me is that English-speaking ASEAN countries, which have laws with which we would be more familiar, provide the logical starting point for many Irish SMEs venturing into Asia for the first time. The progression of the ASEAN economic community integration will now also provide a pathway for growth. In our written submission we state the Government, in difficult circumstances, is providing good leadership in assisting Ireland Inc. to increase its share of the Asian trade opportunity. The opening up of the new embassies in the ASEAN bloc, the increase in reallocation of State agency resources to the region and the increased number of high level State visits are all good for business. We also believe that the trade support being offered by our ambassadors overseas is already delivering dividends. We need to raise our ASEAN trade figures further and we are grateful for this opportunity to propose and discuss our learnings, experience, suggestions and recommendations with the committee.

With the permission of the Chair, I would like to ask my colleague Mr. John Nevin, who is the current chairman of the Asia trade forum to brief members on the proposals. We will then be pleased to take any questions.

Mr. John Nevin

I thank the Chairman and members for the opportunity to speak to them. As Mr. Kelly has outlined, I took over as chairman of the Asia trade forum in July last year, having done eight years of work in Asia when I was in industry. I have identified two key elements. The Government is doing a great deal of good work on the ground but at the same time there are significant opportunities to improve, given the current level of resources, if we manage and plan better. Having said that, when one looks at the prize which trade with Asia or with the ASEAN region could generate, the resources are not nearly what they might be. Bord Bia has one office in the region. Tourism Ireland has two offices, one in Australia, if one includes it in the region. My colleague and I have come from a round-table discussion with the Japanese ambassador at which the IDA presented. The IDA has two people in Japan, which is still our largest export market and where we have a strong presence. We all understand the difficult times of the past five years from which where we have come but we must look at how we allocate resources versus what can be achieved on the ground. As I said at the launch of our recent Asia trade forum programme for 2015, if one builds it they will come.

We come before the committee today to ask for further leadership from the Government in bringing us to where we need to be in the next 40 years. I was around when we passed a referendum to join the then European Economic Community in 1972 and look at what we have achieved in the past 40 years or more since then. We are looking to the future and what we need to do is put ourselves out 40 years from now and ask ourselves where we need to be in Asia in 40 years time because it is the next opportunity. If we are not in the same space in Asia in 40 years as we are within our traditional markets, we will not be the success we are at present.

The recommendation we make in our submission are reasonably clear. We are looking for leadership, commitment, a strategy and a cohesive plan between Government, the State agencies and business. As an SME representative, we know we have many large successful companies that have gone from Ireland to Asia and succeeded with the help of the State agencies. They are large enough to go in on the ground, assess and decide if there is a market and they have the resources to do so. As SMEs, the hardest part of what we do is trying to find a partner on the ground that will bring us to market. Enterprise Ireland is great at getting us introductions to the telcos, the utilities and the major players, but for businesses to be successful on the ground they need to find a small partner that is already succeeding. We believe the best way to do that is to follow the British model, which is to use chambers and to bolster the Irish chambers on the ground. We need a format and a structure so that we utilise the diaspora. We all know of the Irish diaspora but we are not accessing or using Irish people as well as we could be. It has been offered to us on regular occasions.

We have set out in our recommendation what we think needs to happen for Ireland Inc. to succeed. We must appoint a Minister of State for Asia. We have a great chance to use ASEAN as a case study in how to do business better in the Asian region. There is no reason that Ireland Inc. cannot put a strategy together for those countries, look at the resources, the target markets, the sectors we wish to target and the resources that will be needed to back it. We need to bring in businesses so that they are linked into it and we would know what we would do in target markets in different countries and drive it home. The Government's Food Harvest 2020 is one of the better strategies I have seen that has been delivered on and is ahead of target. When Government and business sit down together and look at what is possible, we can achieve more together.

We are in the enviable position of having access to Government and have great relationships with Government and yet - it is an Irish characteristic - we are not utilising those relationships as well as we could be. We could bring more structure to those relationships and use that access to Government to drive initiatives and to bring business forward for the whole of Ireland.

Let me revert to what happened this morning at the meeting with the Japanese am ambassador. Brand Ireland is not nearly as visible in Asia as we need it to be. There is a job of work to be done in penetrating that market. Let us look at the role of Tourism Ireland. I alluded to the figures that of the 12 million visitors from China last year, we got 20,000 to 25,000 visitors. Tourism Ireland, if we are honest, does not have Asia on the map. There is good reason for that in light of its current resources. The low-hanging fruit is in the core markets in which we are strong in getting growth, but now we need to be sowing the seeds for growth from the tourism in that region. More importantly if we are to increase awareness of Brand Ireland in the region, we need to have tourism as a core building stone.

There is a significant opportunity for growth in education. We all know we have many Asian students in our universities but the feedback we are getting on the way we are selling our education offering to Asia is that it is not structured or cohesive and the universities are competing against each other rather than offering their own specialty services. They are tripping up over each other - I am sorry to use that terminology - but the visits to Asia are not as co-ordinated as they should be to get the best offer. We have had overseas delegations to the offices of the Asia trade forum, who have come through London and the United Kingdom and they are advising us that we are not hitting the targets that we should be hitting when compared to how successful they are in the United Kingdom. We have a preponderance to look back on year-on-year growth and see the improvement rather than to look at the size of the market and what our share of it should be. The education sector needs to work on that.

Chairman, if I may, as this point is a little off the track, but we found out yesterday that the funding for UCC's east Asian diploma programme has been pulled. University College Cork had the only programme available in Ireland that was training Irish students in Asian culture and business in order to do business in Asia. We in the Asia trade forum had linked in with UCC and had placements with Irish companies for the 25 students on the programme over the next three months. Irish companies are contacting UCC asking the college to provide more students with these skills in the following years.

If we are to build on our capability to do business in Asia, we will need to have Irish students coming through similar programmes with the competence to go to Asia and promote our companies well. I would urge the committee to have a look at the UCC situation to see if it can be reversed at this early stage. It is only the first year of the programme and it has been successful. The Korean Government has provided funding for it, in terms of lecturers and so on, and the Japanese are very much involved in terms of the provision of Korean, Mandarin and Japanese language and cultural studies and business awareness studies. It is a key programme.

To return to the core argument, we need a strategy and greater leadership. Government has done a good job but we need a strategic plan for Ireland Inc. for Asia and ASEAN, which comprises ten countries. We need to what we are doing in each of those ten countries over the next five years worked through to a business level. Government introduces us to the markets. It opens the doors for us to be able to trade in those places. The State agencies then link us up with the major businesses. For Irish businesses to be able to do business in Asia we need to work with the Chambers and give them a chance to learn the mistakes that have already been made in trying to do business in Asia. In other words, we need to link in with the people who have already made the mistakes and use those volunteers to help us bring business forward.

Chairman

Thank you. Before I hand over to members, I would like to raise two issues. Both witnesses mentioned the scarcity of personnel on the ground, particularly from our development agencies and, possibly, from our embassies. Reference was made to a meeting the delegation had earlier with the Japanese ambassador. Japan and Korea, in terms of the Japan Export Trade and Research Association, JETRA, and KOTRA, the Korean trade investment promotion agency, have many people on the ground. The British also have a huge number of people in their embassies dealing with trade. Is our lack of personnel on the ground a hindrance to our developing trade?

The fact that we do not have a direct air link into Asia was not mentioned. I understand that efforts in this regard have been under way for some time. We currently have an air link into China through ETHIAD Airways and to the Middle East through Emirates. Is the lack of a direct air link into Asia hindering our development of trade, be that in respect of cargo or passengers services, with Asia or the ASEAN countries?

Mr. Hugh Kelly

On the air link, we have seen a transformation in the number of companies travelling to the Middle East because of ETHIAD and Emirates establishing direct links. It has been remarkable. When I engage with and encourage companies to look to more distant markets very often in their view the nearest distant market is the Middle East because it is so accessible. I do not know how practical it is, but there is no doubt that a direct air link with Asia would help. Already, the ETHIAD and Emirates connection through the Middle East has helped greatly. It is a 14-hour journey from London to Singapore, which is probably the maximum amount of time anybody would want to fly anyway. Personally, I do not think one stop in the Middle East is too onerous. However, a direct air link would help. It would show a greater commitment to this area. It would certainly make Ireland more accessible coming the other way, which is very important. In view of the situation as it existed some years ago, we had to send people to see our competitors before they could come to see us. It was a crazy situation. We need to make it easy to invite potential partners in these markets to come meet us and understand what is different about us.

Chairman

Perhaps Mr. Kelly would elaborate on the scarcity of personnel on the ground issue in the context of Japan and Korea having a huge abundance of agencies in Asia.

Mr. Hugh Kelly

Ireland is a small country and so we cannot expect to match the 2,000 people that America has on the embassy site in Delhi. It is not practical for us to compete at that level. This is the reason we are recommending the continued and vigorous exploration of more collaborative partnerships. Unlike when one goes to America and one is just another Irish person, when one goes to Asia and reaches out to other Irish people the amount of support one gets its phenomenal. My office was arranging a visit for somebody to Korea, which I know is not ASEAN but the learning is the same. We were really struggling. The GAA produced a book of Irish people in Asia who are happy to support Irish companies. My CEO wrote to 16 of them randomly and then went home to his wife thinking he probably looked like a very lonely person. By the next day 12 of them had replied. Two more replied two days later, apologising for having taken two days to get back to him. The good will among Irish people in Asia is incredible. We need to reach out to them. They are waiting for us. In due course, when we are very successful in Asia, they will get fed up with us, as in the case of Britain and America where people believe we should be able to find our own way. Irish people in Asia are crying out for us to link it all together.

Chairman

Thank you. As a number of members have indicated their wish to speak we will move on as quickly as possible.

Deputy Brendan Smith

I welcome the contributions by Mr. Kelly and Mr. Nevin. Mention is made in the briefing provided that product exports to the ASEAN countries has decreased by 4% since 2011 while service exports have risen by 22%. Perhaps we could get a breakdown in regard to the product and service exports, including financial, ICT and insurance services. It was also stated that there is an opportunity to follow the British example and bolster the Irish chambers abroad. In this regard, are the witnesses speaking of direct financial assistance from Government to enable Chambers Ireland to have more personnel working directly at the coal-face? Also, has consideration been given to the promotion of Ireland on an all-island basis, rather than Ireland seeking extra market opportunities for this State while the Northern Ireland agencies do likewise? Surely, we are so distant from those countries there is merit in an all-Ireland promotion from the point of view of specific target areas. Has that been considered?

Recommendation No. 9 is that there be better top level cross-agency interaction to leverage off our collective strengths. That could be said by anybody about anything. If the delegates were in a position to lay out what promotional and State agencies we should have supporting our businesses in Asia and elsewhere, what proposals, in terms of structure and architecture, would they put in this regard to Enterprise Ireland, the IDA, Bord Bia, Tourism Ireland, the Department of Foreign Affairs and Trade? We could all call, and have done so, for better leverage, co-operation and collaboration between all the different agencies. The word "silo" was mentioned. We are very conscious of that. Every Department and statutory agency wants to work in a silo. They are all empire builders in their own way. They are very protective about their own boundaries. That has been the way since long before the foundation of the State and it will be the way in generations to come as well. If the delegates were to get what they believe would be the preferred structure of our existing State agencies, what would it look like?

From my limited experience of trade missions and so on, companies and industries do a huge amount of work themselves. Governments and embassies can only open doors, which is also the message from the delegates today. During some of the trade missions I was on I met individuals of small, medium and large companies who to their credit had been doing huge work in uncharted fields long before the State. Is there merit in the provision of direct subvention to companies to support their own marketing efforts while trying to source new markets in the emerging markets from our point of view? In regard to the ASEAN countries, I note the current population is 609 million and is projected to reach 680 million within the next five years. As such, it is an area of huge economic growth in most of the countries and an area of huge population growth as well.

An issue of concern to many of the civil society organisations is the need to be conscious at all times of human rights and industrial relations.

Taking the ASEAN countries, including Myanmar-Burma, there are major concerns about human rights and industrial relations. In the development of trade, we must be conscious that we are not dumbing down workers' rights and human rights.

Deputy Ruairí Quinn

I have read the recommendations and endorse much of what Deputy Smith said. We cannot do the job of the witnesses but they can tell us what we can do to make their jobs better and easier. The witnesses can decode No. 9 as a very polite way of saying: "Let us not offend them". However, if the witnesses do not tell us the truth, we cannot fix it. There are silos and complications and we are not getting the best return.

Would the following suggestions help in the area of education? I was very concerned to hear the comments by Mr. Nevin on the closing down of the UCC Asia programme, with which I was not familiar but which is essential. Enterprise Ireland was given responsibility for promoting Irish education abroad by the then Minister, Batt O'Keeffe. It was a good decision at the time and I supported it in opposition and in government. How do we say that at one level and say to the seven universities and the institutes of technology, particularly the bigger ones, that they must co-ordinate activities and co-operate rather than compete? How do we say to UCC that it should concentrate on south-east China? The market is so big. How do the witnesses suggest we, as politicians, the Minister for Education and Skills and Enterprise Ireland reach an agreement with third level institutions that this vast market of over a couple of billion people be carved up in a systematic way? In this way, Trinity College, Dublin and UCC would have a certain area. Is that what the witnesses are asking us to do? How could it be done within reason? How do we maximise efficiency and respect the right of people to make individual choices if they see an opportunity?

The Departments of Justice and Equality and Education and Skills, particularly the former, have set the criteria for bogus English language colleges in Ireland. These were backdoor access to a rich European market and nothing else. The message has got through. That side of it has been cleared up. There is a vast demand in the emerging middle class of ASEAN countries for quality European English language education for their teenage children or young adult children at third level. What barriers exist in access to visas and speed of visa applications? What can we do, given that we have an enormously positive product in Irish education to export? There is a hunger and a demand for it. What barriers exist? If the witnesses can bring them to our notice, we can remove or streamline them to remove the irritation.

Deputy Maureen O'Sullivan

I admit to not having much experience of south-east Asia but I have experience of countries in Africa. From my visits there, I know they are keen to do business with Ireland. The witnesses referred to the goodwill in the south-east Asia area, which is similar in Africa. One of the reasons is their respect for Ireland and their expectation that, when we do business, it will be in an ethical way rather than an exploitative way. There are grave issues of tax justice. A recent report showed that illicit tax flows from Africa amounts to between $50 billion and $60 billion annually. What is the commitment, on the part of Irish businesses doing business in south-east Asia, to doing business in a fully transparent way, to a register of owners and to country-by-country reporting?

Deputy Brendan Smith referred to human rights issues and some of the countries the witnesses hope to do business in carry out severe abuses of human rights. This morning, Indonesia used the death penalty against ten people caught trafficking drugs. I am not condoning drug trafficking but using the death penalty in that instance was barbaric.

We know the issues in Myanmar with certain ethnic groups and Laos is the poorest country in the region. It is open to exploitation by people. The witnesses are driven by profit and I am not saying anything against that. However, for Ireland to have a respectful and respectable position, we must be conscious of it.

I was at a meeting with a group from Colombia yesterday. Other free trade agreements have been disastrous because big businesses have come in, resulting in serious land displacement and land grab. Land that was used for food to feed the population was taken over for the profit of multinationals. Colombia was a major exporter of coffee but is now importing coffee. I am not saying that the witnesses should shout from the rooftops about human rights but, in our own way and in an Irish way, we can make these points forcibly and contribute to a better standard of living in those countries.

Another aspect is gender equality. Women are the poorest paid, most vulnerable and most easily exploited. I am interested in the response of the witnesses to these points about tax and human rights.

Deputy Eric Byrne

Can the Chairman allow me to speak now because I must leave the meeting?

Chairman

Yes.

Deputy Eric Byrne

The contributions and recommendations are excellent and one cannot disagree with any one of the bullet points. The former Minister for Education and Skills highlighted the issue of education. I am not familiar with the 25 students in UCC and the closing down of the course in its first year. I was involved in the twinning arrangements between Dublin and Beijing. In terms of the universities and institutes of technology, there was definitely a very divided approach to recruitment. The universities did their own thing and there was no co-ordination with Tallaght IT and DIT, which had stands at the same function. With regard to No. 6, the review of Irish education institutions' market approach in these regions, perhaps the witnesses can explain the loss of the course in UCC. We know what the Confucius society has just obtained in UCD. What is the role of the Confucius society in Asian education? DIT has Chinese staff members doing Chinese studies and I presume the same is true of Trinity College, Dublin. I refer to the loss of the school in UCC vis-à-vis the range of courses provided through UCD, Trinity College, Dublin and DIT. What failed in UCC?

The easiest way to target and create wealth in this country is in recommendation No. 4, with the emphasis on tourism, food and education. We spoke about education. Food is the jewel in the crown. With Asian food, there may be some competition to produce. In a market of 800 million people, there must be potential for food but Bord Bia only has two members in the field. I am disappointed to hear that Tourism Ireland is not milking its position in Asian countries because more and more Chinese visitors are coming here. I have entertained a number of them. We have a successful and sophisticated tourism industry and we are doing some work with DIT in Laos. It is trying to build infrastructure in tourism and it is being assisted by DIT in developing a college. I met some students.

We can build on such relationships and give assistance. In Laos, for example, we can assist it in catering for its the growing hospitality industry.

I wish to make a final point about education. I met a huge group of Omani students. I know this matter is not connected to the delegation but I want to use it as an example. The Omani Government has decided to send lots of Omani children to Ireland to learn the English language initially in order to access courses, although not PhD courses. They are being educated so they can be trained as electricians and motor mechanics to replace the foreigners who provide these services in Oman. These students are being upskilled when they come here.

The delegation has made excellent recommendations. I also wish to compliment the diaspora in Korea and its embassy. When I visited the embassy it had a wonderful female ambassador. Unfortunately, I cannot remember her name but she was very facilitative. I found there was a great relationship between the Koreans and us and it was not just because they like to drink a lot of good quality beer. There is a commonality between the Irish and the Koreans that we should exploit. Those are my questions or approbations.

Chairman

A number of issues have been raised and I suggest we deal with the first four questions on education and other areas and deal with the remainder later.

Mr. Hugh Kelly

I will reply in no particular order. The Confucius Institute in Ireland is Chinese-funded, so its focus is exclusively China. The UCC school programme may still go ahead but funding has been pulled from the Higher Education Authority. The news is so fresh and I am not sure what the exact implications are for same. That programme is the only one which teaches Asian languages. Mr. Nevin referred to the Korean embassies which funded a lecturer to teach the Korean language. The course contains language modules and cultural training which is so important.

In terms of tourism, there is a connection between education and tourism. Last year a programme was mooted in UCC. It was not approved for various reasons but it should be explored. It was an idea to run a third level programme to train the Irish hospitality industry how to welcome Asian visitors. The Lonely Planet guides advise anybody from Asia planning to come here to bring their own noodles because the food here is unpalatable. I know from travelling overseas that there would be reluctance to visit certain markets because one has to think ahead about food, comfort and everything else. We need to make Ireland welcoming to Asian visitors.

We were asked how to divide education and how to be more effective. Uversity is a model that promotes Ireland as a place for education in the arts. All of the participating colleges have worked together and have decided among themselves which college is better at teaching certain subjects rather than using geographical location. The Royal College of Surgeons has had huge success in Malaysia and when its sends a delegation to Asia, its value proposition is very clear - it is medicine. When Trinity College, Dublin, UCD and UCC travel to the same region, their value proposition is not so clear. Prospective students have the following questions. What is the speciality of each college? What sets them apart? To start with, how does one pick between UCC and UCD to start with, let alone between Ireland and England? Making it easier for students to reach a decision is down to good business. We must convince everyone involved that dividing the sector and working together to offer a total value proposition is more powerful than competing individually.

In terms of food, we are doing an awful lot right. Bord Bia is doing an excellent job but we need to have the confidence to do more and to commit more deeply. We will succeed - the evidence is there.

In regard to the all-Ireland question and whether we promote the whole island, I see no reason for not doing so. It is worth noting that the industries in Northern Ireland are incredibly different from ones in the Republic. The North has a lot of heavy industry and mining and the offerings complement each other. I know from my experience that when one gets to Asia, and perhaps a little bit out of sight of Ireland, one can see they work closely together and it is great. Former employees of Enterprise Ireland who now work with Invest Northern Ireland are still available and willing to help Irish companies and vice versa. There is great co-operation in the markets. Based on witnessing what these organisations have been able to do, I would advocate an all-island context as it has more positives than negatives.

The UK has put in place a chamber of commerce model in order to stretch its resources and that is why we think it is clever. With a bit of funding, the chambers of commerce here could look after certain markets which would allow Enterprise Ireland to concentrate its resources on other markets. The problem is Enterprise Ireland is spread too thinly. When we say to the Asian nations that we want to increase trade with them, they ask about our commitment. They ask how many people we have concentrating on this market to try to improve trade but the numbers are not credible and there is a mismatch. We need to give them evidence that we are serious. I suggest we organise public private partnerships or semi-public private partnerships by bolstering the local chambers of commerce, which are largely funded by subscriptions paid by local businesses. If we just top that up, then we will stretch our resources further. We cannot print money and we appreciate resources are limited. That is why we are pushing so hard for a more co-operative approach. That goes to the heart of the query about recommendation No. 9. We want more public private partnership, consultation and working together. There are a lot of private companies willing to contribute their time and resources to the cause but they need to be let in and trusted. The Asia trade forum has led to an increase in trust over the past number of years and we have what we consider to be a good relationship with Enterprise Ireland and IDA Ireland. The relationship is far better now than when we started so the forum has been a success.

Mr. John Nevin

I will respond to a couple of the other queries. In terms of direct intervention with companies seeking to do business and Deputy O'Sullivan's comments, we strongly advocate that a good business must be doing good business in the region. Therefore, businesses have a responsibility to stand up and perform correctly before receiving hand-outs or supports. We would be better trying to support the market entry service companies that exist and to enable their facilities to be available to the companies going out to do business in the region at a better rate. Also, companies seeking to get access to those skills should be validated as making the commitment that is required to get to market. Too often companies say they are going to be in Asia. They visit the region and think they will do business there but they really have not made a commitment to do so. We must validate the commitment of a business before giving it supports to go on a journey that it may not pursue.

Deputy Smith raised another issue. To reiterate a point made by Mr. Kelly, we have a working relationship with Invest Northern Ireland. When we host and run events, we invite it to present at our events, education seminars, etc.

In terms of a silo approach, we do not oppose such an approach. We think the silo and focused approach of the agencies has been very successful in its own right. The work that IDA Ireland and Enterprise Ireland do on their own is very good. In fairness to them and the other agencies, we can see from the outside looking in that there is a continuous onus on them to evolve and develop themselves. In terms of the major corporations, the buzzwords are cross-matrix structures within the business. Therefore, one still needs to bring the agencies together at a top level in order to utilise the knowledge available within the different agencies to penetrate the tourism market, for instance. We have a lot of businessmen who have top level relationship in many of the Asian countries. If we brought that back to the tourism industry, we might be able to help it see why it should focus more on the region and fast-track its ability to take business from where it is currently to where it needs to go.

Mr. Kelly has already talked about the food industry, which is good. However, the tourism industry is very much behind the food industry at the moment.

I sat with the ambassadors and tourism people in Dublin Castle in January, and they pretty much said that Asia is not on the radar, that we have markets closer to home that are more important to us and that we do not have the resources to focus on Asia. We are not here to address the resources issue today. As businesses, we must make the best use of the available resources and that is the key message we must bring, that we have a huge amount of capability in the market place, so let us harness it better. However, we need more resources in the tourism sector. It is not an either-or scenario. We need to look after our existing markets, but we must put resources behind growing those markets because there are large travel markets that are bypassing Ireland.

Many of the committee meetings we attend are quite difficult, but this one is about asking for money where the payback is obvious. We have gone from 4% to 8%, in terms of our exports to Asia and Enterprise Ireland has said there is more positive news to come from the region and will make an announcement on that tomorrow. We are on a growth trajectory with the work we are doing there. It is now a question of how we can fast-track that further. The payment is obvious for the commitment to resources required.

Deputy Seán Crowe

Cuirim fáilte roimh na toscairí chuig an cruinniú. The World Economic Forum discussed ASEAN and the main message was that it was all about potential. The focus was on the market of 600 million people. The forum highlighted the area had 100% mobile telephone coverage and 30% Internet coverage, the young age profile of the population and the projected increase in the next 20 to 30 years of the middle class. I suppose the region ticks all the boxes and we would all agree we need to expand our exports to this developing market.

What we plan should be based on mutual beneficial trade and should also focus on areas such as human and workers' rights, environmental sustainability and fair taxation. There are difficulties in this regard when we consider the countries involved. For example, Cambodia and Laos are renowned for land grabbing from subsistence farmers and Myanmar is emerging from a military regime. One of the issues that arose was the importance of ensuring the forthcoming elections in Myanmar in November are free and fair. Do Mr. Kelly and Mr. Nevin concur on this? How important is it that there is greater confidence in the region as a whole, not just in Myanmar, and how important is this for exporters and people who travel into these areas?

Mention was made of education and the pulling of funds by the HEA. Were there enough people signing up for the course or were the funds cut on the basis there was no demand for the course?

Mr. John Nevin

There were enough people. The drop-out rate on the course was 20% and I am told that it is 50% on average in other courses. The numbers signing up and the numbers sticking at the full course were strong. Also, a strong proposal was submitted in order to get approval for the course initially. To a certain degree, this came out of left field. It is a competence building course that helps Ireland trade in Asia in the future.

Deputy Seán Crowe

I suppose it is to do with the cultural briefing as well as the language issue. Is anybody else taking up the slack? Are there other courses for exporters or those travelling to the region? In particular, are there cultural briefings in regard to how to meet and greet, etc? I know of other European countries that have specific hotels for Asian tourists. Are there similar hotels in Ireland where we can be assured there will be no major faux pas made in regard to cultural issues or food?

In regard to Asian students coming to Ireland, are there any links cultivated with them when they return to the ASEAN countries? Do you see that as an important link? People have suggested they might have a grá for Ireland and might look back fondly on their time here. Along with the Irish diaspora, are these students seen as a possible link?

It has been mentioned that of the 12 million Chinese tourists that came to Europe, only a very small percentage came to Ireland. I understand there has been some movement in regard to visas and there is an agreement with the British Government, India and China. Do we need to develop this area further? In regard to clients coming to Ireland, has there been a difficulty with regard to visas for them? Is this a problem and should it be considered for recommendation by the committee?

I understand exports of goods to Asian countries are down 4% and services exports are up 22% since 2011. I presume this relates to IT and accountancy services and so on. However, do some of these services exports relate to multinationals putting services in regard to other Irish companies on the books? Can you explain why this is happening? In which services was there an increase and why has there been a reduction in goods exported? Is it due to the cost of getting to the market?

The Philippines have not been mentioned, but we did mention the earthquake in Nepal. Did the typhoon that devastated parts of the Philippines have any impact on colleagues working in the region?

Deputy Bernard J. Durkan

I apologise to our guests for my absence from the earlier part of the meeting. Unfortunately, I was trying to fly two kites at the same time.

I wish to raise the issue of trade with China and the potential for growth. I realise there has been discussion on this already, but can our visitors give us some indication as to areas of opportunity. We are aware the food industry, IT and financial services provide opportunities for growth for this country. What other examples are there? With the current situation regarding the value of the euro vis-à-vis other currencies, is this not a good time to establish markets in a way that will be sustainable? We do not expect the euro will remain in the same position indefinitely and expect it will fluctuate somewhat. To what extent can provision be made for changes in the market value of the currency at a given time? What impact are changes likely to have in China and in south east Asia in general?

About 15 or 20 years ago a businessman said to me that the entire global investment would divert into south east Asia in the future. Much of it did, but not all of it. What advantages do we have when competing for investment with places like south east Asia? Our education system has already been mentioned in this regard. I am aware various universities have had an association with their counterparts in China over the years. I live in Maynooth and Maynooth university has had such a liaison in the past. To what extent can this area be developed further, with consequential benefits for both China and this country?

My final question relates to tourism. China has a huge population and is hugely important in terms of tourism. Is there a particular market we should target in China with a view to expanding tourism facilities here to meet the requirements of that market?

What do they go for, most importantly? The Chinese have done a fair bit in promoting their own heritage and archaeology is one avenue in this respect. We do not do enough in this country in that area despite having a rich culture. We could do much more. It is important to identify the countries and regions with similar interests. I remember visiting the rock of Masada a long time ago and that was most interesting. A great deal of work has been done there without disturbing the site in order to make it attractive to visitors, including those from colleges, schools and tourists from other countries.

Chairman

The witnesses may now respond to the questions raised by members. Given that we have opened two new embassies in Thailand and Indonesia, with a consulate general in Hong Kong, what is the importance of having a resident embassy? It is something that cannot be emphasised enough. There were ten ASEAN countries mentioned so where is the real growth potential for Ireland to do business? We did not mention Vietnam; the embassy there was traditionally an aid embassy but as Vietnam's economy improves, there will probably be far more emphasis on trade.

Mr. Hugh Kelly

Ambassador Damien Cole, based in Vietnam, is looking after a number of countries under that remit. The easiest countries to enter and those with immediate opportunities for Irish business to grow in are Singapore, Malaysia and Indonesia. We have called for an ambassador to be appointed to the key country of Indonesia and we were delighted that the decision was taken. It is a huge market with great growth potential. For the average small and medium enterprise, there is no doubt that entering a market like Singapore or Malaysia is easier and is probably a wise first step before trying to crack some of the other countries.

People can do this and naturally pick markets that are better established and generally supportive of human rights. That goes back to Deputy O'Sullivan's point, which we have not really addressed. Business naturally gravitates towards markets where it feels safer, there is a strong rule of law and where personnel can be comfortable in visiting. Business would naturally endorse countries moving towards more openness and forward thinking in terms of human rights, including equality between genders, although that may come later. My reading of why the authorities in Myanmar are making such an effort to open up is because they see the commercial dividend to be gained from improving the country's image abroad. There is no doubt that at the macro level, at which individual small and medium enterprises have limited ability to make an impact, there is a responsibility on the Irish Government to fully support a continued push for improving human rights.

Deputy Crowe asked who else is running courses. We ran many seminars in the Asia trade forum and collaborated with the younger cohort through the universities like UCD, where we have run a programme for four years. We have run a programme with the University of Limerick for two years where students are encouraged to develop market entry strategies for members of the Irish Exporters Association to learn about doing business there. The question was asked if any hotels in Ireland specifically cater for Asian facilities. I do not believe there are any, although the property at Fota Island has been bought by a Chinese company. Perhaps it will address the issue. Members asked if returning students are a valuable asset. They definitely are. There is the oft-cited example of ESB International sponsoring a student from Vietnam many years ago who returned to become deputy prime minister of the country. That connection is still invaluable to ESB International and it was a great investment.

The China opportunity is definitely significant but it is difficult because it is a big market. This goes back to State agencies and how they might work. I am a big believer that all of our incentives and programmes put in place must not just hand out money or encourage people through singular actions like attendance at a trade show but should be geared around supporting the right behaviour. The Dutch have done studies on how long it takes for a small or medium enterprise to break even in China, and the average is four years. If a company commits €50,000 to entering the Chinese market just in case it fails, it will fail. A trade fair is excellent for researching the market but it is not necessarily going to deliver the right partnership. Essentially, a company would be standing against a wall hoping that somebody will ask to represent the company. That is instead of working out what the company needs and going out. It is a superb forum in which to research and understand a market but it is only part of a strategy. There must be multiple visits to a market, a commitment to follow on and the securing of a trade partner, but that is the first rung on the ladder. People then have to visit the market regularly. I would like to see more support being directed to companies that truly commit to the market, as that is how success is delivered. It is not about getting more companies out there; perhaps there should be fewer companies but with deeper commitment into the market.

There was a question of what sets Ireland apart to position it for growth in the Chinese context. The Irish Government has done an excellent job building our relationship with China and it regards Ireland very warmly. Consider peripheral countries and what is happening in Greece and Italy. I had a report from our director from China a while ago and he mentioned the huge investment from China in Ireland. I asked him why this came about and he told me it is because the Chinese like Ireland. We have done the diplomatic part very well and we should continue to make that investment.

Deputy Eric Byrne

The ambassador is excellent. He has a lovely wife and children there. He does a phenomenal job in engaging and not just with the Irish diaspora. It is a great embassy.

Mr. Hugh Kelly

The Deputy is referring to ambassador Paul Kavanagh. Our prior ambassador was a fluent Mandarin speaker.

Chairman

He was there for nine years.

Mr. Hugh Kelly

It makes a difference.

Mr. John Nevin

Embassies on the ground are essential, as is the attitude of our ambassadors. They are very commercially focused and they know they are there to help Ireland Inc. succeed. It is great to see that. We would like to see a bit more collaboration between ambassadors and the Department of Foreign Affairs and Trade, as well as State agencies and business, in order to drive this forward. We do not have the resources of other countries but we can be smarter about how we use resources. We are not as smart as we could be yet. We are relying on relationships and, to a certain degree, the journey we have ahead is different to what we have had in the past. When we brought American businesses here, we had geography on our side as we are on the way to Europe. We had low-cost labour, the English language and well-educated people, as well as access to Europe. We are now a high-cost society in the value-adding area. Culturally, it is a different market. Government and business must learn about doing business, trading and engaging with these countries. We have spoken about ambassadors being prepared and in some cases in the UK, ambassadors do nine months of training before going to certain market so they are up to speed on how to engage and work through bureaucracy like that in India, for example. There is an education part from ambassadors through to business on doing business in Asia. As the numbers show, we can succeed and we can win.

Chairman

The Indian economy is recovering very well. How difficult is it for Irish exporters or people to do business in India, given the size of the country? It may be difficult politically to work there.

Mr. John Nevin

India is the future. I have come from a scaffolding company which did business in India - a traditional manufacturing business. We had a €40 million order backlog with India in 2011 and it was zero by 2012 because the Indian Government did not deliver on its part of the deal. The power stations were built but the interconnectors were not put into the power stations to take the energy away. That was the frustration of India. Under Prime Minister Modi, all that has now been addressed and that scaffolding company is now back doing consistent, good business with India. The country is complex but Prime Minister Modi is making a difference and businesses engaging with India are seeing the benefits.

India has 900,000 engineers coming out of college every year. A million jobs are being created there every month and the plan is to create 120 million jobs over the next ten years. That is happening. It is different from what it was four or five years ago. Like all of these places, there will be bumps in the road but the progress is almost inexorable and we have to stress the need to be in that space.

Chairman

In respect of Indonesia, which Mr. Nevin highlighted, do the State agencies have any plans to have somebody on the ground in Jakarta, given that it is such a big market of 250 million people and that we have opened a new embassy there? Are there plans for Thailand as well?

Mr. John Nevin

I have the file of where the partners are for this year, as nominated. I cannot remember if there is anybody, apart from the embassy staff, in Jakarta.

Chairman

They are concentrated very much in China, Singapore, Japan and Korea.

Mr. John Nevin

That is correct. There are no such plans that we have seen.

Chairman

We will meet them over the coming weeks so there will be an opportunity for the committee to ask what plans they have to expand on the ground given their resources. It would be an opportunity, particularly in Indonesia.

Mr. John Nevin

To return to the Chairman's point, it is not about which country is the most important but rather the sectors we choose to target in those countries. We have some very successful infrastructural business at the moment in Myanmar and so on. While infrastructure could be big in Myanmar, aviation is big in India and China. Food is already big in China and has huge potential in Indonesia. We need to pick the sectors rather that just picking a country and bringing all of our services there.

Deputy Maureen O'Sullivan

As Mr. Nevin mentioned Myanmar, may I ask if there are Irish businesses or investment in areas where there has been ethnic conflict and tension? Is the Asia trade forum being directed by the Government towards areas that suit the minority groups in Myanmar?

Mr. John Nevin

That is a question above my pay grade. I cannot answer it at present. The businesses I know of doing business there are working with the Asian Investment Bank. It is being funded through that bank which, as a rule, would mean it is going to be more ethically correct in its approach. Denis O'Brien tried to win a contract out there and did not succeed but still went ahead to build the pylons and so on. There was an element of goodwill towards the work he was doing there, even though Digicel did not win the telecoms contract there.

Chairman

One good thing is that our ambassador, Brendan Rogers, has taken over responsibility for Myanmar from ambassador, Damien Cole, our ambassador to Vietnan. That means he is responsible for two countries on which he will be able to focus.

Mr. John Nevin

Ambassador Rogers is doing a review of the chambers as well to see if we can work more closely with them.

Mr. Hugh Kelly

To wrap up, what is our big ask? All the elements are there. There is a lot of goodwill and huge opportunity. We just need to pull it all together into a cohesive strategic plan. We ask for serious consideration to be given to the appointment of a Minister of State with responsibility for Asia.

Chairman

As the witnesses will know, we are preparing a report on doing business with ASEAN countries. Their contributions today and their nine-point plan and recommendations will be very useful to us and will form an important part of the report we hope to present before the end of summer. I thank Mr. Kelly and Mr. Nevin for appearing before the committee. We had a very interesting, comprehensive and informative meeting.