Bernard Durkan (Kildare North, Fine Gael)
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Question 136: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if she Is satisfied that Irish exports can adequately compete on world markets having particular regard to the cost base; and if she will make a statement on the matter. [20218/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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Ireland has consistently been ranked higher as an economy in which it is easy to do business. This has seen the growth of a large number of successful new exporting companies.

According to the World Bank, Ireland is a leader in having the lowest cost for setting up a business. Ireland is also perceived as lightly regulated, which in itself, lowers costs for business. Ireland also has the third lowest rate in the EU of corporation tax, which lightens the tax burden on business and gives them an advantage over competitor countries.

We have an open, pro-enterprise and pro-business economy. However, current trading conditions for companies are difficult and challenging due to a number of factors including the devaluation of sterling, tough competition, and the global recession. Some issues are outside the control of Government as a whole, but where possible we are addressing Ireland's cost competitiveness as an essential element of our economic recovery.

Recently published indicators are in our favour with inflation, commodity and other prices falling. The Consumer Price Index figures released last week are an indication of falling Irish prices in a number of areas, with Ireland showing the highest cut in prices. This brings Ireland closer into line with average EU prices, going some way towards restoring our overall cost competitiveness.

Growth rates in Irish labour costs slowed significantly in 2008 and were lower than the EU average, with average wage inflation falling significantly across all sectors (excluding utilities) during the year. Indeed, there has been a rapid adjustment of wage and price levels. Public service wage rates reduced by 7.5% on average in February. Private sector pay rates are also declining. According to EU projections, unit labour costs will fall by 4% this year, compared with a 3% increase in the EU on average. That translates into a significant improvement in competitiveness and is positioning the economy for future growth.

In relation to the position of Irish exports on world markets, I welcome this opportunity to set out the factual position. Our manufacturing and services sectors are very successful on global export markets. Indeed, contrary to the impression given by some commentators, Ireland's export performance has been very impressive even during the current economic difficulties. Data for 2008 shows that our total exports were €153.8 billion; a fall of less than 1% on 2007 and our trade surplus was a very healthy €21.4 billion. This was a very noteworthy performance, when account is taken of the global recession and the adverse exchange rate between the Euro and both the US dollar and sterling, as the US and Britain are our two largest export markets. In addition, we have achieved considerable success in developing new markets, with significant export growth achieved to China, Malaysia, Saudi Arabia, UAE, Brazil and some of the new EU member states.

Further evidence of Ireland's strong performance is illustrated by the fact that Ireland's share of EU exports increased from 2.2% for the quarter November 2007-January 2008 to 2.5% for the same period a year later and in January 2009 it stood at 2.7%. The level of exports from the EU as whole, actually fell significantly - down 23.9% in the quarter December 2008-February 2009, so our performance is even more remarkable in that context.