Mr. Pat Ivory:

I thank the Chair and members for the invitation to address the committee and to exchange views on Ireland's engagement with the European Union in the context of the review of foreign policy and external relations currently being undertaken.

IBEC and our numerous sector associations are keen to support this review. We are committed to working closely with Government and policy makers at national, European and international level, to shape conditions to drive business and economic growth. IBEC recognises the significant role the Department of Foreign Affairs and Trade, Irish ambassadors and their embassy staff play in representing Ireland across the world. Taking responsibility for the task of representing Irish interests on a complex range of diplomatic and other issues contributes to a positive view of Ireland. This has been an important factor in restoring Ireland's reputation abroad and supporting economic recovery.

Ireland is a committed member of the European Union and IBEC is particularly conscious of the important role of the Irish permanent representation to the European Union. We meet regularly with Ambassador Declan Kelleher and Ambassador Tom Hanney and their staff to advance important issues of interest to Ireland at institutional level in Brussels.

During 2013, IBEC worked closely with the Department of the Taoiseach, the Department of Foreign Affairs and Trade, and the Department of Jobs, Enterprise and Innovation on delivering a successful Irish Presidency of the Council of the European Union for Irish business and Ireland as a nation. The six-month Presidency was marked by an impressive array of activities, seeking to make progress across a broad range of EU policy issues. This was the seventh time Ireland held the Presidency since our accession to the EEC in 1973. It was not just about Ireland having to manage the affairs of the European Union, but an opportunity to advance a positive, forward looking agenda in Europe and prove that our returning confidence as a nation was justified. While the true legacy of this Presidency will emerge over years, an initial assessment from a national EU and business perspective must be positive.

Ireland's Presidency programme sought to promote economic stability, jobs and growth. This programme has great synergy with the business community's message which was formulated by IBEC in its document, Driving Economic Recovery. In promoting economic stability in the European Union, the Presidency made progress in areas such as the Single Supervisory Mechanism, the capital requirements directive, rules for banking recovery and resolution and the European semester process.

The promotion of jobs and growth is an issue that is of crucial importance to Ireland and the Presidency prioritised negotiations for a political agreement with the European Parliament and the Commission on the multilateral financial framework which secured a €960 billion EU budget for the period 2014 to 2020. It also secured provisional agreement on a new €77 billion research and investment programme for the European Union under Horizon 2020. In conjunction with the Presidency, our work also placed emphasis on advancing a number of outstanding Single Market issues, along with tackling youth unemployment.

An EU negotiating mandate for the transatlantic trade and investment partnership was also secured during the Irish Presidency. We particularly appreciated the support of Ambassador Michael Collins during his time in Washington and we are committed to working closely with Ambassador Anne Anderson in the months ahead on advancing this important initiative. These EU-US negotiations not only have the potential to deliver from an economic perspective, but are also extremely important from a global strategic perspective. They should deliver higher GDP growth, create job opportunities and help restore the European Union's position globally. IBEC continues to work with strategic business partners in both Europe and the USA to advance these negotiations. We meet regularly with key EU trade negotiators to advance business interests in areas such as pharmaceuticals, medical devices, food and drink, the digital economy and internationally traded services. It is important to achieve the correct balance through this agreement in reducing tariffs, improving co-operation on regulation, opening public procurement markets and ensuring that data is able to flow across borders to support and maximise the potential of innovation for both manufacturing and services here in Ireland and in Europe.

During 2013, IBEC also organised several events promoting business priorities. These included an address by the President of the European Council, Herman Van Rompuy, to business leaders. The IBEC CEO conference focused on the strength of the Irish and European business model. Our CEO conference, held in the past few weeks, was also addressed by Lord Livingston, the Minister of State for Trade and Investment in the United Kingdom. A St. Patrick's Day event in the European Parliament, hosted with Irish MEPs, showcased Irish food and drink. The EU-US Business Round Table in Dublin Castle in April facilitated an important exchange of views with Karel De Gucht, the European Commissioner for Trade, and Michael Froman, who was then a White House economic adviser and is now the United States trade representative. The BusinessEurope Council of Presidents brought business leaders from across Europe to Dublin to agree priorities for the year ahead. We welcomed the support of the Government in the delivery of all of these events and initiatives.

IBEC also supports the work of the Export Trade Council and its role in driving effective implementation of the Government's trade, tourism and investment strategy, Trading and Investing in a Smart Economy. We welcome the inclusion of private sector members on this council, which includes four Cabinet members and the heads of State agencies relevant in the trade and tourism arena.

IBEC appreciates the work of ambassadors and their teams in a range of important global markets that helps to open doors for Irish business. A key element of the Government's strategy relates to the 27 priority markets that were identified and in which local market teams have been established, headed by ambassadors and comprising representatives of embassies and relevant State agencies. This team Ireland approach has facilitated the drawing up of focused local market plans and greater co-ordination among State agencies such as Enterprise Ireland, the IDA, Bord Bia and Tourism Ireland. This development should help to support the important contribution made by Irish companies trading and investing abroad.

At recent meetings of the Export Trade Council, IBEC has presented an overview of the trade agreements currently being negotiated by the European Union. These agreements should open up markets and provide opportunities for Irish business. Their impact should be considered in the current review of priority markets for Irish trade promotion and export agency support. The IBEC paper recommends a focused strategy that includes support for established markets, such as Canada, the USA and Japan, as well as support for emerging markets, both large, the BRIC countries, and smaller countries, like Korea, Singapore and Vietnam.

The potential to do business with African countries should not be forgotten as they can provide significant opportunities for future exports, growth and investment. The Department of Foreign Affairs and Trade’s Africa strategy and annual Africa-Ireland economic forum are initiatives which should be further developed in the coming years. The World Trade Organization agreement on trade facilitation reached in Bali in December 2013 provides for capacity building in developing and least developed countries. The agreement presents opportunities for Ireland to facilitate such assistance bilaterally, or through international organisations, to assist developing and least developed countries to implement its provision. If properly implemented, it should lead to more harmonised customs rules and procedures that will result in lower transaction costs and smoother trade flows for Irish businesses.

The success of Irish exports as a significant driver of economic growth depends on market access. Manufacturing sectors such as pharmaceuticals, medical devices, food and drink and internationally traded services such as financial and computer services offer significant potential for export growth. IBEC acknowledges the important role Irish embassies have played in helping to secure market access. We recommend this work be intensified in collaboration with EU missions and foreign governments to resolve market access issues as they arise.

Irish embassies also provide important networking opportunities for Irish businesses by hosting receptions that bring key decision makers together with visiting delegations from Ireland. Many Irish companies, particularly small and medium-sized enterprises, appreciate these efforts to open doors and provide access for companies and foreign officials in various locations. Increasingly, the Department of Foreign Affairs and Trade is ensuring all staff who take up places abroad have an appreciation of economic and commercial factors that drive the Irish economy. IBEC believes enhancing training and information for diplomats abroad can be important in delivering opportunities for increased trade and investment. We are happy to continue to support these efforts. We are pleased to directly support the new public-private sector exchange programme with a diplomat from the Department of Foreign Affairs and Trade having joined IBEC for six months.

Ireland continues to face significant economic challenges. While export growth and continued foreign direct investment have contributed to economic growth, we cannot be complacent. If Ireland is to continue to attract foreign direct investment, grow exports of goods and services and attract greater numbers of tourists, a fully co-ordinated and focused effort by various State agencies, Irish ambassadors and embassies will be vital. On a broader policy point, Ireland, once again, needs to reduce taxes to compete more vigorously in attracting foreign direct investment. At 52%, we now have one of the highest marginal income tax rates in the OECD, well above the average of 36%.

IBEC is committed to developing strategic alliances with international business partners, as we have found this to be an effective way to advance common interests and goals for Irish business. It was interesting to note in the recently published medium-term economic strategy that it was the Government’s intention to intensify its strategic engagement with European institutions and member states to shape a strong, growing and competitive European Union. IBEC will be keen to contribute to developing this more structured engagement on a more focused set of interests and priorities.