Eamon Ryan (Dublin South, Green Party)
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Question 90: To ask the Minister for Enterprise, Trade and Employment if he will assess the impact that a consistently weak dollar has had on Irish businesses; if he has made representations to the US authorities on the matter; and if he will make a statement on the matter. [18100/05]

Micheál Martin (Cork South Central, Fianna Fail)
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The evolving structure of Irish enterprises, particularly the growth in internationally-traded services and the manufacture of higher technology based products means Irish exports are higher value-added in nature and as such are more resilient to exchange rate movements. Transforming our enterprise base will be accelerated by consolidating our competitiveness strengths, helping existing firms with tailored competitiveness enhancing programmes and attracting foreign investment in sophisticated niche products and services.

Enterprise policy is being actively refocused towards creating the conditions that will make possible a sustained shift to higher skill, knowledge-intensive activities and in which advanced manufacturing expertise will be an important contributor to growth and employment. This is essential if our enterprises are to sustain competitiveness against adverse currency movements in exchange markets over which we have no influence. The range of incentives provided through the enterprise development agencies are designed to meet these objectives and to help enterprise operate at higher levels of skill, undertake higher order strategic investments, product development and innovation. The agencies want to be active and supportive partners with enterprise to help buttress their competitive strengths while building their capacity to expand into new products and markets where demand will be influenced more by product ingenuity and customer satisfaction than by simple cost-price considerations.

Global foreign exchange markets determine the external value of the euro. It is not within the capacity of a small open economy to artificially influence trends in exchange rates and nor should we try. Our focus should rightly concentrate on building a competitive economy and competitive and productive firms that will be able to consistently convert global business opportunities into expanding jobs and profits for Ireland. I would also point out that trade with the euro area accounts for about 35% of total external merchandise trade. A significant proportion of our trade is therefore not directly affected by the euro-dollar exchange rate.

While we saw a consistent weakening of the US dollar during 2004, this trend seems to have been reversed since the beginning of the year as the dollar has strengthened by about 7.5% since January. However, I am concerned that currency volatility can have a negative impact on small companies and their ability to manage these fluctuations to their competitive advantage. Enterprise Ireland, in association with the Irish Exporters Association and National Irish Bank, organised a series of foreign exchange risk strategy workshops throughout the country entitled, Managing Your Foreign Exchange Risk — a strategy for the future. These ran from June to October 2004 and were designed to inform exporters about foreign exchange rate risk and the strategies that they can adopt to manage and reduce those risks. A number of additional workshops were organised in response to excess demand from companies.