Denis Naughten (Longford-Roscommon, Fine Gael)
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Question 65: To ask the Minister for Enterprise, Trade and Employment the action he intends to take to improve Ireland's export growth of only 1.8% in 2005, which the ESRI describes as disappointing in its latest quarterly report; and if he will make a statement on the matter. [17871/06]

Micheál Martin (Cork South Central, Fianna Fail)
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The reference by the Deputy to a 1.8% increase in export growth for 2005, from a report published by the ESRI, refers to the total volume growth of Irish exports in 2005. Figures published by the Central Statistics Office show that the total value of Irish merchandise exports for 2005 increased by 5% on 2004 export figures. This follows a 2% increase in the value of Irish exports between 2003 and 2004.

It has become common practice internationally to regard the value of exports, rather than volume, as the key measure of export performance. In an increasingly sophisticated economy, such as ours, where production is moving up the value chain towards higher-tech, higher value added products and services, the value of Irish exports is a much more appropriate measure than the volume of exports.

On that basis, the increase of 5% in the value of our exports in 2005, relative to 2004, continues the upward trend, which, with the exception of the global economic slowdown which occurred around 2002, has been a feature of our export performance since the early 1990s. I am heartened by the continuous improvement in our export performance against a difficult background of continuing low growth rates in the European and US economies in recent times. Given the very difficult economic circumstances in certain of our key export markets, any increase in export performance is a significant achievement and a rise of 5% is, therefore, admirable indeed.

The Irish Government is strongly supportive of Irish exporting firms seeking to increase their level of exports on world markets. My Department, through its agency, Enterprise Ireland, is active both nationally at developmental level and, through promotional activities carried out from a range of locations abroad, in assisting Irish indigenous companies to find new markets for their products and to increase their existing level of market share. Through its network of 33 international offices, Enterprise Ireland creates and implements successful strategies for market entry, development and growth in overseas markets. The activities of this network include arranging access to international buyers and increasing in-market trade promotion activities; increasing the number of overseas missions, raising the level of participation at trade shows and increasing the number and quality of incoming buyers; seeking to ensure increased international media coverage of the range of product and service providers in Ireland and the benefits of doing business here; and continuing to increase the number of incubation centres in key overseas markets, thus providing a low-cost market mechanism for clients with strong potential.

In this work, close co-ordination is maintained with other export promotion organisations, such as Bord Bia, Bord Iascaigh Mhara and non-governmental bodies such as the Irish Exporters Association. Enterprise Ireland is also assisted by our Irish Embassies abroad in facilitating the development of export markets for Irish exporting companies. In addition, the Taoiseach, my colleague, the Minister of State at the Department of Enterprise, Trade and Employment with special responsibility for trade and commerce, Deputy Michael Ahern, and I have been active in leading trade missions and will continue to do so, in conjunction with Enterprise Ireland, to existing, long-established markets and to the new EU member states, as well as to Asia, with a view to increasing the share of exports by Irish companies worldwide.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I acknowledge that the Minister and the Taoiseach are doing everything possible to advance new market opportunities for indigenous companies as well as for our foreign direct investment in the country, and that should continue. Whether one accepts the increase in value of 5% or in volume of 1.8%, as appears in the ESRI report, which I would expect the Minister to accept, the Irish Exporters Association has been signalling for some time the worries it has over our competitiveness and how we can best get our products quickly and cheaply to the European mainland. We touched on these matters recently when discussing energy.

Has the Government taken a comprehensive overview of the ESRI report? Will it take new initiatives to ensure businesses have the best possible opportunities to export the maximum volume of goods, particularly in the food sector where current efforts are concentrated? Companies such as Dairygold and Glanbia have concerns about the need to get Irish products to the market more easily and quickly to counter their current dependence on foreign facilities in the United States or United Kingdom.

Micheál Martin (Cork South Central, Fianna Fail)
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It is important to secure agreement on the issue of value versus volume because the former is a better index. While figures can always be used in different ways, I would prefer a lower volume of much higher value goods in the technological and pharmaceutical areas than a high volume of low value exports. It was somewhat unusual for the ESRI to focus on the volume aspect of the equation because it is the norm and also the common sense approach to continue to work on the high value side.

Notwithstanding that argument, the enterprise strategy group report which we are implementing, particularly in re-organising and restructuring Enterprise Ireland, has pointed in the direction of enhancing our skills in sales and marketing and internationalisation. Enterprise Ireland views this as a significant agenda item and is re-organising its footprint across the world vis-À-vis location and so forth, with a view to ensuring we have available to us the best skills and are best placed in the emerging markets to assist Irish companies to access these markets. The results achieved by Enterprise Ireland since the new strategic vision was announced last year have been very encouraging in terms of securing greater volume and value of sales overseas for its client companies.

Research and development is critical on the food side. Given the strong link between the marketplace and innovation and research and development, we want research and development to be informed by the needs of the market. In the past year, considerable work has been undertaken with Enterprise Ireland and the food industry in re-investing in and assisting research and development capacity in companies such as Dairygold, Glanbia, Kepak and, most recently, Dawn Farm Foods, all of which are moving into the higher value area of nutriceuticals, health enhancing foods and so forth, which have significant growth potential. Software is another significant area. I agree with the Deputy that we must consistently examine our approach to ensure we can continue to increase market share.

It is a pity we did not have a calmer debate on the services directive as it would have allowed us to discuss the wider trade implications of the directive for Ireland in terms of access to European Union countries, particularly on the services front. Many of our indigenous services could also benefit from the removal of some of the ridiculous barriers to access in place in several other EU countries. In any event, the debate has concluded. Nevertheless, this discussion highlights that on a calm day such as this the House can debate——

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Most Deputies took a constructive approach to the services directive.

Micheál Martin (Cork South Central, Fianna Fail)
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I refer to the wider debate on the issue.