Mr. John Whelan:

I thank the Chairman for the invitation to address the joint committee. The likelihood is that exports will remain the only significant source of a positive momentum in the economy for the next few years and, that being the case, safeguarding and expanding the export base will continue to be a critical important objective of the Government's overall economic strategy. We are concerned that the stimulus measures being given to many of our competitor countries are not being repeated in Ireland and that obviously puts our exporters at a competitive disadvantage. Moves recently by the Federal Reserve in the US in terms of Ben Bernanke's statement on quantitative easing whereby the US is going to stick at it until such time as it reduces the level of unemployment effectively means that our exports not only to the US but to the Middle East and Asia, where the US dollar is the main trading currency, will also be under competitive pressure. That is not a good platform for us to be looking towards as we head into the last quarter of 2012 and into 2013 and emerge from a year that has been not particularly good for Irish exports on a relative scale. In addition, the fact that the Bank of England has commenced quantitative easing once again will make our exports to the UK increasingly less competitive and, as a consequence, our cost base will look more expensive to an English buyer.

Our main markets in the eurozone, which account for 37% of our exports, are dragging along; they are just coming out of recession and are now back into it again. We seem to be facing a double dip scenario there and that makes it very difficult for our exporters to grow their exports. It is a situation that needs positive stimulus by Government to help us to achieve a greater level of growth.

Many exporters are doing reasonably well but others are not doing as well as they could. Due to the economic circumstances faced by many exporters in most European markets, they are nervous about investing and as a consequence they are not creating the jobs they potentially could create. The jobs growth targets of the trade and investment strategy to 2015 are not being met. The underlying export figures which lead to such growth in jobs are not what they need to be. To have jobs growth we need to stimulate the export sector further. We are all conscious the home market is difficult and it will continue to shed jobs. In our submission today we have indicated a number of areas which need to be addressed which would assist exporting companies as well as those which would like to start exporting. This would also assist companies doing a certain level of exporting and which could do more but need greater access to finance. The committee must understand that companies already exporting to particular markets must be incentivised to enter other more distant and risky markets. Otherwise they will take the safe option and who would blame them. If the objective is to create more jobs through exports we must incentivise companies. Issues with access to finance at present are not helping and we will delve further into this.

If the US and UK Governments reduce the cost base for their exporters and use a currency mechanism to help them to have stronger exports, then we must respond in some way, shape or form. We have indicated a number of areas which need to be watched and addressed. As we approach the budget we could hit the tipping point between increasing the cost base and keeping the export industry competitive. We can steal a march by targeting fast-growing export markets, but these markets are more distant and new to exporters. As a consequence there is higher risk and more working capital is required. This brings us back to supporting mechanisms. A wide range of companies trade only on the home market. With the proper incentives they could be introduced onto export markets. This needs further addressing.

Committee members are familiar with the fact that our food and drink sector, particularly agrifood, is the largest of our indigenous export sectors, accounting for approximately €8 billion. In the first six months of this year it saw a downturn, having grown by 25% in the previous two years. This is indicative of the factors I indicated to the committee. Mr. Bernard Coyle heads our food and drink council and his company has been actively exporting for many years. He will speak about some of the issues in the food and drink sector, in particular the cost of doing business.