Dáil debates

Tuesday, 7 October 2014

3:15 pm

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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79. To ask the Minister for Foreign Affairs and Trade the effects on exports from Ireland as a result of the EU-Russian trade sanctions; the further trade opportunities that have been pursued by the Department to counter the negative impact of the sanctions on Irish exporters; and if he will make a statement on the matter. [37720/14]

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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Given that Russia is the third largest non-EU export market for Irish goods, after the United States and Canada, the sanctions being imposed by Russia on EU exports have to be of serious concern to us. It is not just about the direct impact on Irish exports; the indirect impact also means there is more competition among European exporters for a smaller market share. Can the Minister of State give an indication of the particular initiatives that are being taken by the Department of Foreign Affairs and Trade, or by the relevant State agencies, to address the difficulties that have arisen following the imposition of those sanctions?

Photo of Dara MurphyDara Murphy (Cork North Central, Fine Gael)
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I thank Deputy Smith for his kind words at the outset this afternoon. The crisis in Ukraine continues to be a major focus for the European Union. On 29 July last, the EU agreed a package of restrictive measures targeting sectoral co-operation and exchanges with the Russian Federation. These measures limit access by Russian state-owned financial institutions to EU capital markets, impose an embargo on new contracts for trade in arms, establish an export ban for dual-use goods for military end users and curtail Russian access to sensitive technologies, particularly in the field of energy. These measures came into force on 1 August. On 7 August, the Russian Federation imposed wide-ranging sanctions on food imports from the EU, the US, Norway and Canada.

In response to a marked intensification in fighting in eastern Ukraine, the EU moved last month to reinforce the restrictions put in place in July. They are carefully calibrated and can be intensified or lessened according to how developments unfold on the ground in Ukraine. The EU measures apply to future contracts and agreements. Our current assessment is that the direct impact on the Irish economy of these sanctions is likely to be modest. It is clear, however, that the retaliatory measures taken by Russia in August have greater implications for Ireland’s agrifood exports. The Minister, Deputy Coveney, has described the ban as a significant setback to our strategic plans to further access the Russian market. He is fully aware of the need to seek out alternative markets for Irish agrifood exports. He has already had some success in this regard, with the recent opening of the Philippines to Irish beef, pigmeat and sheepmeat and Vietnam to Irish pigmeat.

The Commission has also introduced a range of supports for EU farmers, growers and producers to mitigate the impact of the Russian ban that will benefit Irish food exporters.

Additional information not given on the floor of the House

Specific measures are being taken by other Government Departments and their respective State agencies to examine potential in markets other than Russia in order to help alleviate the effects on exports from Ireland as a result of the EU-Russian trade sanctions, not least the Department of Agriculture, Food and the Marine, in view of market access for beef exports to Russia. My Department will continue to liaise with other Departments and State agencies, including in the context of the Export Trade Council, in closely monitoring the impact on Ireland of these sanctions and taking necessary steps as required.

3:25 pm

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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I thank the Minister of State for his reply. In 2011, we exported food and drink worth approximately €150 million to Russia. In the meantime, there has been a substantial increase in these exports. The Minister of State referred to a modest impact, but this does not include the displacement factor. I know someone who exports a substantial quantity of food to Britain. His competitors are from central Europe. If they cannot export eastwards as they traditionally do because their products have been banned from Russia, they will export westwards. As such, some of our exporters are facing greater competition. I hope that the relevant agencies are not just examining the direct impact, but also the indirect impact of displacement.

I remember reading a figure in an Enterprise Ireland report to the effect that its client companies accounted for approximately 45% of total exports to Russia.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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A question, please.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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Between 2008 and 2013, the growth in sales was a phenomenal 87%. This shows the potential of the Russian market. Will the Minister of State assure the House that his Department and the relevant State agencies besides Bord Bia will ensure that some initiatives are taken to seek markets for other sectors, given the possible displacement of our products from Russia?

Photo of Dara MurphyDara Murphy (Cork North Central, Fine Gael)
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Measures are in place specifically to seek other markets. The Deputy is aware that sanctions have only been in place for a number of weeks. Bord Bia has established a helpdesk for exporters. We must also acknowledge that the recent discussions on this difficulty give rise to the hope that a political solution involving the EU and Ukraine will be found. This matter has the attention of the Minister for Foreign Affairs and Trade, our Department, the Minister for Agriculture, Food and the Marine, Deputy Coveney, and his Department.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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I thank the Minister of State. Perhaps he or his officials might check something for me. I have received representations to the effect that there is still great scope for some sectors that are loosely associated with the agrifood industry, including genetics, ingredients, food technology and agricultural consultancy, to increase their trade with Russia.

Does the briefing note prepared for the Minister of State by his Department mention adverse currency movements in terms of the ruble-euro exchange rate that could impact on us? If not, perhaps he might check.

Photo of Dara MurphyDara Murphy (Cork North Central, Fine Gael)
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If the Deputy has been contacted by groups that believe there is some potential, Enterprise Ireland would be more than willing to engage with them. If he passed on their details, we would happily facilitate him.

We are trying to secure a competitive advantage in new markets across a broad range of sectors, including the most vital one of agrifood products. The State has done significant work on trying to attract markets in Russia. The recent development is a setback, but we must be conscious of the bigger picture and our place within the EU. At this point, the impact is modest. As with Ireland through Bord Bia and the relevant Departments, the EU has a broad range of measures in place to support exporters and mitigate the effect on businesses and people to the greatest extent possible.

3:30 pm

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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As Deputy Kyne, who has tabled Question No. 80 is not present, we will proceed to Question No. 81.

Question No. 80 replied to with Written Answers.