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Ireland signs trade agreements with China; There is no El Dorado on the horizon
By Finfacts Team
Feb 20, 2012 - 12:29 AM
|Trade agreements being signed in Dublin Castle between Ireland and China by Minister Bruton and Chinese Minister for Commerce Gao Hucheng, Feb 19, 2012. Taoiseach Enda Kenny (r) and China's Vice-President Xi Jinping, are in the background|
The Government on Sunday evening signed two agreements aimed at improving
Ireland’s trade and business links with China. However,
there is no El Dorado on the horizon.
Both agreements were signed by the Minister for Jobs, Enterprise and Innovation,
Richard Bruton TD, and by China’s International Trade Representative and
Vice-Minister of Commerce, Gao Hucheng, at Dublin Castle following bilateral
talks between the Taoiseach and the visiting Vice-President Xi Jinping who
arrived from the United States on Sunday morning.
Irish exports to BRIC countries (Brazil,
Russia. India and China from the original classification plus South Africa) are
very low and are mainly made by the foreign-owned sector. Exports to these five countries
only accounted for 2.3% of total exports in 2010 with China accounting for the
lion's share. Exports to India were at a decimal point.
Exporting to China
relation to China, for indigenous firms opportunities would be in niche areas
For a company to have
export potential, it has to generally first establish a domestic base/record and
unless it has a compelling product/service (in such a case it’s likely to be
acquired by a bigger overseas firm), it needs resources, perseverance and
Putting Mandarin on the school curriculum is a typical proposal from armchair
‘experts’ who have no experience of the challenges of selling in China - - 1.3bn
consumers and all we need is a very tiny slice of the pie!
In November 2009, Irish companies were warned by several senior executives who
run some of the country’s most successful indigenous companies, to be cautious
about expanding into emerging markets and focus instead on developed markets.
“More fortunes have been lost than made by getting in too early,” former CRH CEO
Liam O’Mahony told a conference on making businesses international at UCD’s
Michael Smurfit Business School.
O’Mahony, who ran the world’s second biggest building materials company from
2000 to 2008 and now chairs IDA Ireland, said Irish companies should consider
expanding into the US, UK and other mature markets before looking at countries
such as China. “Some of these markets are very large and there is still
scope to grow as long as you have value propositions,” he said.
O'Mahony’s advice was repeated by Glanbia chief executive John Moloney and Glen
Dimplex boss Seán O’Driscoll. “China is a long-haul, a slow-burn,” O’Driscoll said.
The first Memorandum of Understanding, on the Promotion of Ireland - China
International Trade in Services, envisages a programme of events designed to
encourage cooperation between the business sector in both countries.
Enterprise Ireland will be the key Irish body in helping strengthen a new trade
relationship with China. EI already has three offices in China and operate an
extensive range of supports to help Irish companies expand into the Chinese
The other agreement is a Memorandum of Understanding setting up a specially
mandated working group to promote investment between Ireland and China. This
will facilitate future investment and help identify any obstacles or
administrative hurdles which might impede the growth or promotion of bilateral
Activity under these new arrangements will be advanced under the wider framework
of Ireland's 'Joint Economic Commission' with China. This is a bilateral forum
involving both Governments. It meets formally every two years and is a regular
way to enhance our trade and economic links between Ireland and China.
Speaking Sunday afternoon, Bruton said: “A
crucial part of the Government’s Action Plan for Jobs is to increase trade and
investment activity with key markets such as China. We have already put in place
a series of measures to build on the work done in recent years, but we must do
more. The Vice President’s visit to Ireland is very welcome, and we are
determined to take advantage of this excellent opportunity to further improve
our links with China.
“These Agreements provide first of all for a comprehensive engagement between
our two Governments to deepen and expand our enterprise links in order to
provide substantial growth in the level of services trade. This will be of
assistance to Irish businesses seeking to break into the Chinese for the first
time and expand their activities there.
“Secondly, I see strong potential for increased inward investment as China seeks
to deepen its engagement with the EU. Ireland is very well placed to be the
target of such investment as the only English-speaking member of the Eurozone,
and IDA Ireland has already had some success in this area. The signature of this
agreement today formalises a mechanism for deeper ongoing engagement between our
enterprise support agencies, particularly the IDA and its counterparts in the
“These agreements are very welcome as we seek to grow our trade and investment
links with China and ultimately create jobs”.
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