Trading with Japan – Opportunities for Irish Business
Jul 7, 2017
by Emma Kerins, International Affairs Executive, Chambers Ireland
This week’s news that the EU and Japan reached a political agreement for a new trade deal is a welcome development for all those who support increased international trade. Japan is the fourth largest economy in the world and with a population of more than 125 million people; its market holds enormous opportunities for EU firms. Chambers Ireland has long called for and supported the EU’s trade strategy.
It has been a difficult few years for supporters of free trade with protectionism on the rise in many countries, including the United States. Further, following the UK’s vote to leave the European Union in June 2016, one of the main concerns of the Irish Chamber Network is the impact this exit will have on our economy. The almost certain reduction in trade between Ireland and the UK will have a disproportionate impact on our indigenous firms, especially exporting SMEs, which are hugely reliant on the UK as their primary market.
As part of Budget 2018, we recommend that Government take steps that support Irish business to be resilient and remain competitive. For example, Government must help SMEs through the provision of training on customs procedures, the use export documentation, and how to access new markets.
Government must also ensure that it adequately resources state agencies, such as Enterprise Ireland, Local Enterprise Offices and InterTrade Ireland, so that they can assist businesses in planning for Brexit. Of particular concern to the Chamber Network is that Government ensures that micro-businesses which operate cross-border are supported through such agencies. Further, we recommend that Government adequately invests in our diplomatic and trade networks abroad to ensure we will be in a better position to capitalise on opportunities in new markets.
Given the severe impact a Brexit will likely have on our SME exporters, we also believe that now is the appropriate time to introduce a trade finance programme for SME traders who wish to diversify into new markets. An Export Working Capital Scheme would target SME exporters with additional trade finance or working capital to process new orders or service new clients. Post-Brexit, there is an increased imperative to support SME exporters to expand to new markets, as access to UK market will become more challenging. Given the severe impact a Brexit will likely have on our SME exporters, now is the appropriate time to introduce such a programme. We can learn from our international counterparts. Examples of other OECD countries with such schemes in place include Australia, Canada, and Denmark.
We need more trade, not less, especially in the wake of the UK’s exit from the EU and the likely challenges that will bring. Building on existing vibrant trade links with countries like Japan must be part of how Ireland prepares for Brexit. We see our recommendations primarily as steps we can proactively take to help SMEs prepare for Brexit and help them limit any reduction in trade they might experience following the UK’s exit from the EU. However, Brexit aside, we also see that market diversification and state supports for SME internationalisation will have positive economic benefits for the firms operating in Ireland.
Read more about our Budget recommendations here