Oireachtas Joint and Select Committees

Wednesday, 29 April 2015

Joint Oireachtas Committee on Foreign Affairs and Trade

Trade between Ireland and ASEAN Countries: Irish Exporters Association

10:30 am

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.

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