IP protection obstacle for firms exporting to Asia

19 Feb 2007

The lack of intellectual property (IP) protection is seen as a major obstacle for Irish companies’ ability to boost trade in Asia, a vital market for companies in the technology sector.

Companies in the electronics and mobile software markets in particular are looking to Asia as a vital market not only for now but well into the future.

However, a new report by IBEC has found that not only is the lack of IP protection policy hampering progress but needless bureaucratic red tape from an Irish Government and EU level are also preventing trade opportunities from being exploited.

It is understood that in recent years Ireland has secured €8.5bn in exports from Asia but IBEC believes this could have been over €10bn if red tape and the lack of IP protection weren’t already taking their toll.

“There is substantial potential to increase Ireland’s level of trade with Asia,” explained Pat Ivory, director of trade affairs at IBEC.

“In addition to increasing sales of computer, pharmaceutical and food and drinks products, Ireland should also be targeting growth in emerging sectors such as medical devices and financial services.

“If Ireland does not move to exploit these opportunities, the business will simply go elsewhere. The Asian economies are set for enormous growth over the coming years and IBEC will be working closely with business to enable them to benefit from this,” Ivory said.

Asia, with 3.7 billion inhabitants (more than half the world’s population) and a combined gross domestic product (GDP) of over €7,900bn, offers enormous potential for trade in Irish goods and services. Real GDP growth rates in Asia are also very high from an international perspective and generally well above European levels.

GDP growth of between 7pc and 10pc is particularly impressive in China, India, Vietnam, Hong Kong and Singapore. A further welcome development is signs of an economic recovery in Japan, which continues to be Ireland’s major trading partner in Asia, with GDP growth of 2.7pc in 2006 and the International Monetary Fund forecasting growth of over 2pc for 2007.

Irish exports of services to Asia have increased to over €2bn in the last couple of years. Japan accounts for around 25pc of Irish services export to Asia, with China (including Hong Kong) accounting for 9pc.

This growth in services exports is particularly important given the lower current level of exports of goods (€6.5bn) to Asia when compared to earlier in the decade. Japan still accounts for around 35pc of Irish goods exported to Asia, with strong growth in exports to China (including Hong Kong) increasing its share to around 22pc.

“Ireland’s economic future will more and more depend on how we fare in the emerging growth markets in Asia,” said Gerry Murphy, director of International Sales Partnering at IBEC.

A survey of Irish companies by IBEC found four key areas that need to be addressed. It found that improved information on Asian markets should be available, new direct flights to the region will be required, technical regulations should be harmonised and a strategic plan from government to tackle non-tariff barriers must be developed.

By John Kennedy