UN Centre for e-Business by Vision 2030

8760 cover.qxd

21/03/2007

15:32

Page 2

UNITED NATIONS CEFACT

SIMPLE, TRANSPARENT & EFFECTIVE PROCESSES FOR GLOBAL BUSINESS

10th UN/CEFACT Forum, Dublin, Ireland Hosted by CP3 Group

IRELAND The Gateway for Transatlantic Business

Trade Facilitation Global Standards which Save Time, Save Money & Increase Competitiveness

8760 cover.qxd

21/03/2007

15:34

Page 3

THURSDAY FINAL

21/03/2007

15:00

Page 1

CONTENTS www.ceo-financial.com The United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT): an overview

Forfás How Trade Facilitation Will Influence Irish Policy Going Forward

CP3 Group - Facilitating Trade

Chambers Ireland Supports Trade Facilitation and Welcomes UN/CEFACT

Irish Customs Positive on Trade Facilitation

Irish Exporters Association Benefits of Trade Facilitation to Irish Exports

Waterford at the Forefront of Economic Development

Transatlantic Business Dialogue Towards a Barrier Free Transatlantic Market

IMDO - Irish Marine Development Organisation

IIFA - Trade Facilitation and the Freight Forwarder

NITL - What the Transport and Logistics Industry Needs Going Forward

Banking and the Electronic Supply Chain

LCAC Trade Services Limited

Microsoft in Ireland - A World Class Location for a World Class Company

Diageo Ireland and its Global Success

C.E.O. Financial Ltd. accepts no responsibility for errors, mistakes or omissions. No unauthorised reproduction is permitted. Prior written consent is required from C.E.O. Financial Ltd. before any reproduction of any piece of this trade journal. Published by;

CEO Financial Ltd., Beech, Ballinclea Road, Killiney, Co. Dublin, Rep. of Ireland Tel: +353877473779 Fax: +13092945437 Email: office@ceo-financial.com www.ceo-financial.com

Design and layout by;

Design at DBA 56,Carysfort Avenue, Blackrock, Co. Dublin Tel: +353 1 288 7247 Fax: +353 1 288 3583 Email: info@designatdba.ie www.designatdba.ie

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:00

Page 2

THE UNITED NATIONS CENTRE FOR TRADE FACILITATION AND ELECTRONIC BUSINESS (UN/CEFACT) 1

1. TRADE FACILITATION IS A PREREQUISITE TO INTERNATIONAL TRADE. Business, trade operators and Governments generate information as part of the processes associated with the movement of goods, the transfer of services and related financial flows. National regulatory authorities amend or add formalities in some cases without consideration of the effect such changes may have on the overall trading system. This can easily lead to incompatible or inefficient regulations, information requests and controls. Furthermore, the use of nonstandard, country-specific, and agency-specific data is inefficient as regards to the international exchange of information among trading partners. It increases both the risk of error and costs for both 2 Governments and trade .

The frequent consequence is congestion at airports, seaports and inland surface terminals. This generates additional costs, estimated at 2-4 per cent of the total value of world trade. These costs further discourage small and medium-sized enterprises (SMEs) from considering trading internationally. New challenges are emerging for companies operating in international trade. These include the requests for advance information imposed by security authorities and the increasing complexity and geographic extension of 3 international supply chains .

1 Trade Facilitation: The simplification, standardisation and harmonisation of procedures and associated information flows required to move goods from seller to buyer and to make payments. 2 There are in an average trade transaction between 27 and 30 different parties involved, handling approximately 40 documents, not only for government authorities but also for related businesses. 200 data elements are required, 30 of which are repeated at least 30 times (APEC (1996)), of which 60-70 per cent are re-entered at least once (ETPAD (1998)). In addition these costs may be multiplied by data-entry errors incurred during the process (SITPRO (1991)). Similarly, Messerlin and Zarrouk (1999), p. 12 find that the average customs clearance transaction in the Middle East and North Africa takes between 25 and 30 stages to complete and takes between 1 day to several weeks, with border corruption being evident in the process too. 3 Customs procedures are only one aspect of improving the overall efficiency of the cargo clearance process. APEC (2000) cites a World Customs Organisation (WCO) study of clearance times at Indonesian ports, which found that the Customs clearance process for certain shipments took an average of 6.4 minutes, compared to 159 hours and 23 minutes for other activities involved in cargo clearance, including problems with incomplete documents, red tape involved in releasing goods from warehouses, and payment holdups even after the release of goods by Customs officials. Mikuriya (2001) shows that the biggest delay from cargo arrival to release is in the plane-to-warehouse and time-in-warehouse stages of the process.

THURSDAY FINAL

21/03/2007

15:00

Page 3

Trade facilitation aims at eliminating redundancies in international trade and transport data that needs to be submitted to authorities. Furthermore, it seeks to simplify 4 international trade and business processes such as ordering goods or payments. 5

2. INTERNATIONAL STANDARDS HOLD MANY ANSWERS TO GLOBAL TRADE ISSUES Facilitating trade through conventional measures, such as the reduction of tariffs, has been achieved over the years by the World Trade Organisation (WTO). Further gains in international trade can be obtained by addressing nontariff barriers to trade.

International standards influence all stages of 6 the international supply chain : order placing and fulfilment, transport, disposal and recycling. Unclear or insufficient information can cause a variety of problems within supply-chain networks. The standardisation of information exchange improves the quality of the information and speeds up trade.

2.1 Standards developed by consensus among trading partners serve as a lingua franca for trade One example of this lingua franca is the UN/EDIFACT standard for electronic commerce. This UN/CEFACT standard ensures that all participants can really communicate and understand each other electronically. The use of UN/EDIFACT by the bar-code community grew by 59 per cent during 1997 and 1998 and the UN/EDIFACT messages are translated into 21 languages.

3. UN/CEFACT 3.1 The role of the United Nations When simplified and standardised export documents were introduced in Sweden in 1957, it was felt that this initiative would be of real value only if the high-level of cooperation between the Nordic countries could be extended to cover trade in general at an international level. Attempts therefore were made to find an international body that could assume responsibility for a real international effort. One of the first international bodies to be approached was the International Organisation for standardisation (ISO). However, it turned out that ISO at that time was not engaged in administrative standardisation and had neither

4 Business: A series of processes, each having a clearly understood purpose, involving more than one Organisation, realised through the exchange of information and directed towards some mutually agreed upon goal, extending over a period of time. 5 Standards: A document, established by consensus and approved by a recognized body, that provides, for common and repeated use, guidelines or characteristics for activities or their results, aimed at the achievement of the optimum degree of order in a given context. 6 Supply chains: The "supply chain" is a multi-level concept that covers all aspects of taking a product from raw materials to a final product to shipping to a final place of sale, use and maintenance and potentially disposal and returned goods. Each of these levels covers many aspects of dealing with products and the business process for each level is both unique and overlapping with other levels.

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:00

Page 4

the mandate nor the resources to carry out a task that essentially involved negotiations regarding national legal requirements and international trading practices. Having considered all available options, Sweden, supported by the other Nordic countries brought the matter before the UNECE in 1960, where it was agreed to set up a Working Party to study this issue. Initially restricted to trade document standardisation, it was later mandated to deal with trade facilitation in general. The Working Party is the “ancestor” of UN/CEFACT. 3.1 About us

The primary objective of UN/CEFACT is to initiate simple, effective, transparent processes for international trade, thereby making the activities between the buyer, seller and relevant authorities more efficient, cost-effective and supportive of automation. 3.2 Our activities We concentrate on the following key work areas: • Facilitating national and international trading and business transactions and working towards the elimination of constraints, • Engaging in open dialogue to achieve improved coordination and cooperation with other organisations, and • Improving the ability of business, trade and administrative organisations to exchange products and relevant services effectively. 3.3 How we work To accomplish these goals, UN/CEFACT develops and maintains recommendations, standards and technical specifications that are time and cost-saving tools for companies, Customs authorities, and other actors in global 7 business . In doing so, we:

4. THE NEW FRONTIER OF TRADE FACILITATION Supply chains link producers with consumers. Some are confined by national borders, others span several continents. Products that we buy off the shelf in department stores have often made long journeys, using different transport modes, and have crossed a number of national borders. These “journeys” have become increasingly complex over the past decades. In the early 1990s firms moved toward more integration, improved data management, more complex relationships and increased material flows across borders. The development of the Internet reinforced the integration through the automated management of associated business processes. These modern supply chains blur the distinction 8 between trade facilitation and electronic business . 9

4.1 UN/CEFACT's answer: end-to-end interoperability from the buyer to the seller Against this background, it is important that all traders and government agencies have a precise and common understanding of the business processes, data requirements and data formats. This requires the use of a common methodology and set of standards to achieve the end-to-end integration of business processes and data. To assist in analysing and understanding business processes, UN/CEFACT has developed a Reference Model of the International Supply Chain.

The model can be represented by three processes: "Buy", "Ship" and "Pay".

• Apply a total transaction approach when working for the elimination of constraints; • Simplify procedures and documents, encompassing both border-crossing and other government and commercial processes; • Capture business knowledge in process and information models; • Map the information models to new information and communication technologies as they emerge. Figure 2: International Trade Transaction Model 7

UN/CEFACT Consolidated Documents Set (ECE/TRADE/CEFACT/2006/10) http://www.unece.org/cefact/cf_docs.htm Electronic Business: A generic term covering information definition and exchange requirements within and between enterprises, including customers. (Memorandum of Understanding between IEC, ISO, ITU and UNECE concerning standardisation in the field of Electronic Business) The seamless automatic cooperation amongst computer systems between a buyer and a seller

THURSDAY FINAL

21/03/2007

15:00

Page 5

cooperation between business partners. The ebXML project launched by UN/CEFACT in 2001 introduced the technique of Core Components (CC) which provide a syntax neutral way to describe both processes and data.

Three important projects based on this advanced methodology are the Cross-Border 11 Reference Data Model (CBRDM), UNeDocs and Single Window.

Based on this approach, UN/CEFACT is developing the next generation of trade facilitation standards for the Internet. They will improve international trade processes for commerce by enabling: • Buyers, sellers and relevant authorities to use processes that are simple, cost-effective and support automation; • Border-crossing procedures and other government, commercial and transport processes that are transparent and effective, reducing as much as possible unforeseen or undue delays or unexpected additional costs; • The greatest possible security during the physical movement of goods by the fast and efficient sharing of related information; and • Off-the-shelf software solutions using UN/CEFACT standards and recommendations to automate transactions and the flow of information. 4.2 The business relevance of technology Internet technologies and Extended Markup Language (XML) allow for developing new models of trading and 10 11 12 13

4.2.1 The digital container – The Cross-Border Reference Data Model The CBRDM acts like a container of data associated to the goods for efficient cross-border trade. It provides the definition of the information required by the transport sector and regulatory bodies such as Customs to clear the goods. It is an important instrument to simplify and harmonise data requirements between countries and industry sectors. Countries can define their specific, national data requirements and map the national data requirements against the reference data model. The common subset of data requirements in the cross border reference data model defines the complete information requirements for trade between these countries. This data model will include the data requirements for the business to Government and Government-to-Government processes in an international transaction. 12

4.2.2 From paper to paperless trade - the UNeDocs standard Today UN/CEFACT paper trade document standards are used worldwide. However in the 1990s it became clear that electronic business standards did not replace the existing paper based documents.

The goal of UNeDocs is to provide a seamless transition from paper to electronic documents. This is achieved by combining the existing trade 13 documents standards for paper documents with data modelling techniques, Core Components and XML. The resulting electronic document can be used in either paper or electronic form.

http://www.ebxml.org/geninfo.htm United Nations electronic Trade Documents http://www.cen.eu/uncefactforum/TBG/TBG2/tbg2_unedocs.htm Recommendation No. 1 on the UN layout Key for Trade Documents

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:00

Page 6

4.2.3 Single Window - enhancing the efficient exchange of information between trade and Government The Single Window for International Trade allows parties involved in trade and transport to lodge standardised information and documents with a single entry point to fulfil all import-export and transit-related regulatory 15 requirements . If information is electronic, then individual data elements should only be submitted once.

Establishing a Single Window facility can simplify and expedite information flows between trade and Government. It can also bring about greater harmonisation and better sharing of the relevant data across governmental systems, bringing meaningful gains to all parties involved in cross-border trade. It can improve the efficiency and effectiveness of official controls and reduce costs both for Governments and for traders because of better use of resources. UN/CEFACTâ&#x20AC;&#x2122;s Recommendation and Guidelines on Establishing a Single Window (Recommendation Number 33) details the key principles and steps required to establish a Single Window facility. 14 15

5. TWO CASE STUDIES OF BENEFITS OF TRADE FACILITATION 5.1 Developing countries One constraint to export expansion in developing countries is the role of trade transactions costs or the issue of trade facilitation. Transaction costs associated with international trade in goods are numerous. They cover costs of compliance associated with the collection and processing of information and charges for trade-related services. Increased transport and logistics costs are brought about by administrative processes and customs procedures, which delay goods in the warehouse. Other costs can be brought about by a lack of transparency or of uniformity in the interpretation of regulations and contracts. Finally, a category of transaction costs includes those related to standards. As technological advances help developed countries improve their inspection capacities developing countries are beginning to face more stringent standards requirements in industrialised markets. Developing countries have fewer resources to advance as quickly, and the costs for compliance seem to be increasing.

http://www.unece.org/cefact/single_window/welcome.htm

Recommendation and Guidelines on Establishing a Single Window, ECE/TRADE/352, September 2004, http://www.unece.org/cefact/recommendations/rec33/rec33_trd352e.pdf

THURSDAY FINAL

21/03/2007

15:00

Page 7

resources with which to tackle poverty; and • By improvements in infrastructure. 5.2 Landlocked countries The difficulties encountered by business from landlocked countries stem not from their distance to the final markets, but from the number of border-crossing processes that need to be managed. When transit countries introduce new measures without consulting or informing their regional partners, traders incur fines and experience delays. In some cases there shipments are sent back to their point of departure. Especially perishable goods shipments risk being entirely lost in a transit process. The effects for developing countries of trade transactions costs can be categorised as follows: • Effects on SMEs and, therefore, on enterprises in developing countries; • A high demand for labour to complete complicated procedures; • Effects on the capital standing of firms due to the long processing; and • Lack of predictability that entails significant disadvantages for enterprises in developing. Trade facilitation measures can benefit income distribution and poverty reduction in developing countries in a number of ways: • By changing the prices of traded goods; • By the need to be accompanied in areas such as transport and communications infrastructure; and • By increasing government revenue, boosting social and anti-poverty programme expenditures. The benefits and resulting growth can be achieved: • When trade facilitation measures are implemented by a wider range of policies falling under the trade facilitation agenda – including the level and variability of non-tariff barriers, effective infrastructure, level of international competitiveness, degree of state monopolies, etc.; • Through reducing trade transaction costs that can lower the price of imports and import substitutes, and raise the price of exports and exportables; • By trade-induced growth, which increases average incomes and government revenue, providing more

Corrupt Customs services can have an extraordinarily pernicious effect for landlocked country trade. Fully 46 per cent of the price of shipping a container from Rotterdam to the Georgian capital Tbilisi comes with the transit through Georgia itself. Of this, unofficial payments make up to nine-tenths. For these reasons, the cost of trade is significantly higher in landlocked countries (it costs respectively 66 per cent and 43 per cent more to trade from Paraguay than from other MERCOSUR countries with access to the sea). It is tempting to think that formal trade policy can address the issue. However, the “spaghetti bowl” of interlocking bilateral and regional trade agreements between the different countries is costly and confusing. A WTO agreement on trade facilitation is therefore needed for further integration of landlocked countries in international trade. To achieve its objective, such an agreement should be binding on Customs clearance time benchmarks. The TIR convention and the UN/CEFACT trade document standards are key instruments to this end. They allow simplifying and coordinating administrative procedures at border crossings. Nevertheless, such an agreement would need to be complemented by behind the “border reforms” and regional initiatives, such as regional facilitated transport corridors, simpler border control documents, and single window initiatives.

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:00

Page 8

HOW TRADE FACILITATION WILL INFLUENCE IRISH POLICY GOING FORWARD Dr. Ronnie O’Toole, Senior Policy Analyst, Forfás

The effectiveness and quality of regulation and the institutions that enforce them are major determinants of a country’s prosperity. The problem of the excessive administrative burden on firms is one that has been raised by a number of bodies, most notably the National Competitiveness Council and the Small Business Forum. Well-designed and efficiently enforced business regulation helps achieve social, health and safety, environmental and economic policy goals without imposing unnecessary administrative costs on firms or significant hidden costs, whereby the ability of firms to adapt to changing economic conditions, technologies and consumer preferences is weakened. Ireland continues to be one of the most open economies in the world to international trade and investment. The regulatory environment has played a key role in the development of Ireland’s international competitiveness. According to the National Competitiveness Council’s

Indicator Level of Regulation Labour Market Regulation Product Market Regulation Hours per year for filing corporation tax Administrative Costs Cost of starting a business

Year 2005 2006 2003 2005 2005 2005

Dr. Ronnie O’Toole, Senior Policy Analyst

Benchmarking Ireland’s Performance, the regulatory burden in Ireland is perceived as being relatively low. However, Ireland’s advantages in these areas are increasingly coming under pressure as many countries are recognising that the development of an efficient regulatory environment is an effective way of boosting competitiveness, and in November 2006, the European Commission proposed that the EU agree to reduce administrative costs by 25% at both EU and member state level by 2012. Accordingly, further improvements in Ireland’s regulatory regime will continue to be needed, while ensuring that this is done without undermining high standards of protecting public security, health and other regulatory goals.

Group OECD OECD OECD OECD EU-25 OECD

1=best; = improvement; = deterioration; Source: National Competitiveness Council’s Competitiveness Challenge 2006.

Ranking 4 12 5 3 5 14

Change ( 1) ( 3) ( 2) (new) (new) (new)

THURSDAY FINAL

21/03/2007

15:00

Page 9

The burden of regulatory compliance is not spread proportionately across companies of different sizes. Several UK studies have demonstrated that average compliance costs fall as business size increases, and that the disproportionate cost of compliance is the primary issue affecting small business. It is estimated that small businesses in the UK with two employees spend over six hours per month per employee on Government regulation and paperwork, while those with over 50 employees spend less than two hours per employee. The act of exporting or importing is one area where there is a substantial regulatory burden. Companies involved in international trade regularly have to prepare and submit large volumes of information and documents to governmental authorities to comply with import, export and transit-related regulatory requirements. This information and documentation often has to be submitted through several different agencies, each with their own specific (manual or automated) systems and paper forms. These extensive requirements, together with their associated compliance costs, can constitute a serious burden to both the business community and governments and can also be a serious barrier to the development of international trade. For example, an exporter from Ireland must comply with all the regulatory requirements of the Customs bodies of both Ireland and their destination countries, including revenue collection, protection and security issues. Further, many other governmental agencies can be involved, whether in Ireland or in other countries. For example, the Department of Enterprise Trade and Employment is mandated to manage the licensing system for dual use military/civilian goods, while the Department of Agriculture ensures food safety. Further, the act of exporting or importing requires far more procedures than simply dealing with government. Apart from the communication between the buyers and sellers, a number of service providers are also involved.

Most of the data required for each is common. Service providers include packers, freight forwarders, carriers, customs brokers, hauliers, Chambers of Commerce, and banks and other financial institutions. The data required by these private sector service providers overlaps the requirements of the regulatory authorities to a significant extent. As such, much of the work involved is

duplicated, and unnecessary. Costs are not only in direct monetary terms, but also arise from the effect of time delays and other uncertainties which may complicate the process of trade. Further, there can be substantial implications of â&#x20AC;&#x2DC;getting data wrongâ&#x20AC;&#x2122;. If a firm only has to enter data once, they can take care to do it properly, and greatly reduce the risks of incorrect data.

This weight of regulation and bureaucracy is likely to increase in the coming years given the new security environment with its emphasis on advance information and risk analysis. This drive for greater security is being led primarily by the U.S., though the U.K. is also at the forefront of introducing measures in this area. These two markets account for two-thirds of all Irish exports, and our continued success in them is critical to our future economic prosperity. One approach that has been adopted to address this problem by a number of countries and regions throughout the world is the establishment of a Single Window whereby trade related information and/or documents need only be submitted once at a single entry point. This can enhance the availability and handling of information, expedite and simplify information flows and can result in a greater harmonisation and sharing of the relevant data across governmental systems, bringing meaningful gains to all parties involved in cross-border trade.

The successful development, implementation and adoption of Single Window services will yield massive annual savings due to use of electronic over paper based systems and greater potential for security and control of goods movements between and through states and countries. The benefits for government include a more effective and efficient deployment of resources; correct (and often increased) revenue yield; improved trader compliance; enhanced security; and increased integrity and transparency. There is already work ongoing in this area at the EU commission, and the Irish customs is an active participant in these discussions. Trade Facilitation Ireland can provide a bridge between government and industry to ensure that the full potential benefits of a Single Window for Ireland are realised.

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:01

Page 10

CP3 GROUP - FACILITATING TRADE CP3 Group, the host of the United Nation CEFACT Forum in Dublin, is an Irish company committed to facilitating international trade with on-demand software services that are focused on assisting small to medium-sized enterprises engaged in international trade. CP3 Group are the consortium leader on an EU-funded, pan-European project to facilitate trade for SMEs. The five European Countries participating in this EU programme will see massive benefit derived from the fact that CP3 have taken that initiative across the Atlantic – connecting with the world’s largest economy, the United States.

Conor O’Riordan, Managing Director of CP3 Group

Managing Director, Conor O’Riordan explains the rationale behind the CP3’s mission,

THURSDAY FINAL

21/03/2007

15:01

Page 11

“9/11 changed everything. After that defining moment, it was made clear that the need to balance the competing influences of trade facilitation and trade security would come to the top of the agenda.”

“The US led the way with C-TPAT (CustomsTrade Partnership Against Terrorism) and the World Customs Organisation and the EU followed with the AEO (Authorised Economic Operator) programme. The EU has clearly defined implementation dates on the new regulation for its states. In addition the EU has also clearly mandated that it expects the private sector to lead with solutions that will actually increase competitiveness.” “Ultimately, these changes to the regulatory framework (under the WCO SAFE framework) will mean faster shipping times for companies which gone through the certification process.”

“However, Forbes magazine forecasted in 2005 that the major losers globally in this AEO programme will be the small and medium-sized enterprises and developing countries that cannot meet the cost of these new legislative requirements.”

“We are therefore committed to bringing all of the interested parties together internationally to make sure that these changes that are being made to the regulatory framework will result in considerable gains in competitiveness to all participants. The adoption of UNCEFACT standards can provide that capability. At a local level, Trade Facilitation Ireland was formed to embrace these standards. From an EU-US perspective, we are committed to adopting UNCEFACT standards in the Transatlantic initiative that we are leading,

www.TradeFacilitate.com” The transatlantic initiative will bring representative organisations in the US and EU together on a platform for electronic trade. This will deliver reduced costs to SME companies based on objectives defined by two major Transatlantic studies. One study from the Transatlantic Business Dialogue (2004), the other, a combined study between Eurochambres and the US Chamber of Commerce (2005) identified that

Key priorities were; -

to to to to

minimise costs to industry prevent barriers to commerce mitigate risk, & facilitate bilateral & global trade.

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:01

Page 12

The combined Eurochambres/US Chamber of Commerce survey of mostly small to medium-sized enterprise found that 55% of companies had a difficulty in their ability to find local partners across the Atlantic, 54% thought that they needed to know more about technical standards and certification, 48% needed more information regarding doing business in transatlantic markets and 34% had a deficit of knowledge regarding customs procedures.

The progress demanded from these studies are the cornerstones on which CP3 has built an online platform which will enable traders to save time, save money and increase competitiveness through secure electronic trade built to UNCEFACT standards. According to Elisabet Canestro, International Marketing Manager,

Elisabet Canestro, International Marketing Manager of CP3

Both studies mapped out the necessary steps transatlantic trade should take to facilitate open trade. According to the TABD, “Supply chain security in the Transatlantic context, through the incorporation of ‘Authorised Economic Operator’ (AEO) would allow unimpeded trade flows and by the US and EU working together to support the development and implementation of analogous efforts at international level through the World Customs Organisation.” The TABD study expressly called for the US & the EU to,

“Initiate a joint US-EU pilot project focusing on express carriers and other shippers, for customs authorities to analyse risk attached to cargos and shipments to third countries, exchange information on the results of this analysis, and promote cooperation on enforcement.”

“The EU expects the private sector to lead with solutions in this area, so CP3 see it as logical that the positive US capabilities/experiences to date are fused to any initiatives so as to maximize the opportunity for secure, competitive transatlantic trade for SMEs upwards. A successful transatlantic model would be then portable and benefit developing economies.”

THURSDAY FINAL

21/03/2007

15:03

Page 13

THURSDAY FINAL

21/03/2007

15:03

Page 14

CHAMBERS IRELAND SUPPORTS TRADE FACILITATION AND WELCOMES UN/CEFACT Conor Brennan - Deputy Chief Executive of Chambers Ireland

Conor Brennan

Ireland and the Irish Chamber movement understand the need for trade. In the period from 1930 to 1958 we erected high tariff barriers and focussed almost exclusively on our internal Irish market. It was a recipe for ruin from which we have learned crucial lessons. Trade creates wealth, opportunities and taxes from which all of society benefits. Post 1958 Ireland progressively reduced tariff barriers and actively embraced what is now called the Globalisation agenda. Our recent economic success has been built upon Ireland as open trading economy that is consistently recognised as one of the most globalised in the World. It is in this context that we welcome the arrival of the UN’s Centre for Trade Facilitation and Electronic Business (CEFACT) Forum in Dublin in 2007.

Following the September 11th terrorist attacks in New York, global security concerns increased along with a desire for enhanced traceabilility on import and export documentation. A new era beckons of more complex customs regulation following on the enhanced security requirements and legislation demanded by Governments around the Globe. Chambers Ireland are involved in a range of initiatives aimed at sensitising Irish companies to the implications of these changes and also helping them to embrace and deal with these new requirements.

Chambers Ireland are a partner at Trade Facilitation Ireland which has UN/CEFACT representation and voting status. Chambers are also partners with the hosts of the UN/CEFACT forum, CP3 Group, who, along with LGCSB are supporting a Transatlantic initiative which will provide Ireland with a competitive trading platform with the US. Through adopting UN/CEFACT and EU guidelines, CP3 have also established a pan-EU “eTen” project for Irish SMEs which will enhance the competitiveness of its users. The Chambers Business School, which is now Ireland’s largest private sector facilitator of training, will offer a range of

THURSDAY FINAL

21/03/2007

15:03

Page 15

training courses for business in Ireland that will prepare them for the reporting requirements demanded by this new era. Our network of 60 affiliated chambers on the island of Ireland will become key repositories of knowledge on this issue and will be able to process and route business queries on these issue to relevant subject matter experts. It is in this context that we are particularly proud to be associated with the UN/CEFACT forum, which is being hosted by our partners, CP3 Group. We believe that the presence of the forum here in Ireland can further sensitise businesses both in Ireland and internationally on the challenge of providing enhanced traceability and security. We note that the world customs organisation has now implemented legislation that specifically ensures that imported and exported goods are validated. We in Chambers Ireland are very much aware of the implications of these changes—national customs organisations are now responsible for both collecting taxes and significantly enhanced border security. Yet business will have to overcome some significant red tape arising from these changes. As members of a small open economy that, by necessity, must export if it is to continue to grow, Irish business must deal with different bureaucratic regimes and paper based systems as it deals with each new international market and, by extension, new customs authorities.

While we are strong supporters of EU plans to have a single electronic European trading ‘window’ by 2012, we fear that if these processes are not optimised by this date, then there is every prospect of a two-tier trading system building up in which some companies’ papers are speedily processed while others languish. It is clear that a paperless transparent system could mean significant savings for Irish importers and exporters.

Extrapolated for the World and truly enormous sums of money could be saved for investment in more productive areas that would enhance both wealth and the quality of life.

We support the contention that if an optimised trade facilitation regime was introduced into Ireland then we could actually be looking at a saving up to a billion euro in previously sunken administration and processing costs. This is why we believe that CEFACT can play such a crucial role in liberating both Irish and international businesses from this significant cost burden. We support CEFACT’s mission to improve business, trade and administrative organisations from all types of economies around the World. Finally, Chambers Ireland recognises the strategic importance of trade as one of the great builders of economies, societies and most importantly of peace. Across history the great trading societies—and those societies that traded with each other—have always sought to maintain peace in favour of mutually beneficial and wealth creating trade. We believe that CEFACT has a vital role in the ongoing Global effort to develop international e-business standards that can • Reduce costs • Simplify the flow of data • Decrease bureaucracy • Enhance security, and crucially • Generate trade and wealth creating activities that all citizens and businesses in our respective societies can benefit from. We are involved with and participate in UN/CEFACT policy development via our nominees on the International Chambers of Commerce. We are proud of their efforts as board members of UN/CEFACT. We greatly value their contribution as our representatives on UN/CEFACT’s deliberations. We recognise the huge opportunity for Ireland, and the World from your deliberations. We look forward to a successful outcome from UN/CEFACT’s meeting here in Ireland, we welcome you and wish you a pleasant stay here.

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:03

Page 16

IRISH CUSTOMS POSITIVE ON TRADE FACILITATION Revenue Commissioner, Josephine Feehily, talks exclusively to C.E.O. Financial about the strong history of trade facilitation at Irish Customs, and what the future has in store from a Customs perspective. “The first thing to note”, explains the Director General “is that Irish Customs is and always has been, very positive with regard to trade facilitation. I think that private business would agree with us on this point. We have a whole host of simplified procedures in place in order to make sure that legitimate trade is facilitated to the fullest extent. For example, there are very few Single European Authorisations in place and I am particularly proud of the fact that we have one in Ireland.” “With regard to entry processing, we began our paperless system in 1992 and have been effectively paperless since 1996. Our current figures show that 98% of imports are filed in a paperless manner, while 90% of exports are filed in this way.” “We see ourselves as a key partner with Irish business due to our strong history of facilitation of trade.” Ms Feehily provides Ireland’s importers and exporters with an encouraging message regarding the upcoming changes in the regulatory framework. “There are new regulations coming into play, but I would be concerned if the trade looked at these as a problem for competitiveness. I realise that the initial implementation of the various regulations will entail change for business and some cost, which we will do our best to minimise, but I see the suite of regulations as essential to maintaining the competitiveness of European trade on the global stage.” “From Revenue’s point of view, we are doing our best to take account of future needs in the context of the current project to replace our AEP (Automated Entry Process) system.”

Josephine Feehily, Revenue Commissioner & Director General of Irish Customs

Michael Gilligan of the AEP Redevelopment Team expands on this point:

“While the EU regulation on the new Single Administrative Document was the driver behind the development of AEP II, in developing the system we have built in the flexibility necessary to allow us to accommodate some of the future developments which are on the EU e-customs agenda.” “Over the last number of years the trade have lobbied for direct transmission facilities in relation to the submission of customs declarations. We have accommodated the trade in this respect and are introducing the use of web services for the transmission of such declarations. These declarations will now be submitted to Revenue through the ROS (Revenue Online Service) gateway. We are working with all the stakeholders in the supply chain industry and through programmes such as the Trader Assistance Programme which has been introduced to assist traders in moving to the new Custom entry processing system. We are working with large and small businesses with a view to ensuring business as usual on the introduction of these significant EU projects. We don’t want to leave anybody behind.”

THURSDAY FINAL

21/03/2007

15:03

Page 17

Ms Feehily outlines Irish Customs’ involvement in the Authorised Economic Operator (AEO) programme, the initial submissions of which, start this year. “During the Irish presidency of the European Union in 2004, I hosted a meeting of the director generals of EU customs. Very high on the agenda was the balancing of the competing interests of security and trade facilitation. The culmination of this meeting set the direction for the adoption of the AEO programme by the EU.”

“Although the AEO programme is potentially onerous on traders, we will make every effort to mitigate the effect of these requirements. The fact is that 9/11 happened, and because of that, countries are taking increased security measures to ensure that they properly monitor everything that comes into their space. Without AEO, this would be difficult for Irish and European business. In actual fact, AEO is the solution to the problem. Ultimately, these new regulations won’t delay trading – they will facilitate it within a security context.” “We are currently running our initial AEO pilot programme with six companies spanning the gamut from SME to multinational. We will learn lessons from this

period, so that we can refine our processes and procedures in advance of January 1st 2008 when the programme formally opens for applications. A further 300 days are allowed for processing applications so in practice it will be close to 2009 before the scheme is fully working”

With regard to creating awareness in the business community regarding the impending changes, Customs works in partnership with trade associations through the Customs Consultative Committee (CCC). “We are making the trade aware of the changes through the CCC and the member associations of it. When we have finished the pilot programme, we will engage with the trade directly.” The director general closes with a clear message to Irish trade; “In tax and in customs, Revenue has always worked hard to balance the implementation of regulations with the facilitation of legitimate trade and we will continue to do so. Our objective is to work in partnership with traders and their representative bodies to ensure the successful implementation of the entire EU e-customs agenda and I would encourage business to engage early with this agenda in order to make the transition as smooth as possible.”

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:03

Page 18

IRISH EXPORTERS ASSOCIATION BENEFITS OF TRADE FACILITATION TO IRISH EXPORTS John F. Whelan - CEO, Irish Exporters Association Over 42 % of Irish merchandise imports are sourced from outside the EU and 37% of our merchandise exports go to non-EU countries. And whereas merchandise exports are traditionally seen as taking the main brunt of cross border trade bureaucracy, services exporters who now account for an additional 35% of our international trade, also increasingly face cross border barriers. In 2006 Irish services exports to non –EU countries accounted for 38% of the total , and we sourced 53 % of our services imports from outside the EU. Ireland is therefore unique amongst EU countries, the USA and Japan in it’s dependence on trading relationships outside it’s free trade zone. It is vital, to the long term competitiveness of the economy, not only that these trading relationships should be capable of being steadily improved but that they be expanded, particularly in the developing countries where growth potential for Irish exports are more lucrative.

John Whelan

Trade Facilitation is the name given to measures to simplify and reduce the impact on exporters, of import and customs procedures, security procedures, international payment and insurance formalities, and port and transport processes. On the 31 st July 2004 the WTO members as part of the Doha Development Agenda , agreed to launch negotiations on Trade Facilitation. This was the first time trade facilitation was to be on the WTO agenda. Few countries can benefit more than Ireland from faster progress towards a world where borders, instead of being barriers , are simply seams stitching countries together in even closer economic and business relationships.

The cost of trade compliance in terms of documentation, licences, transit lost time, double entry labour cost, etc to Irish industry is estimate at 4 billion euros per annum. A major opportunity exists to reduce the cost and improve the competitiveness of Irish exporters if trade facilitation can be focused on eliminating the unnecessary barriers associated with cross border trading. However, the recent stalling of the WTO negotiations is not helpful to reducing trade barriers, and the security tightening procedures emanating from the terrorist attacks on the Twin Towers in New York on 9/11 continue to reverberate across the globe, and increase export trade compliance costs.

Hence the initiative taken by the UN to develop and promote the Single Window concept to simplify international trade data requirements is very welcome. The Single Window is a practical application of a trade facilitation concept meant to reduce non-tariff trade barriers and deliver immediate benefits to all exporters and importers as well as the departments of Government involved in trade, such Revenue and Customs.

THURSDAY FINAL

21/03/2007

15:03

Page 19

The Single Window concept has already been taken up by the UK and some other EU member states.

The Irish Exporters Association set up Trade Facilitation Ireland in 2006 to help both the trade and Government departments to introduce the Single Window concept, at the earliest possible date into the Irish trading scene. Trade Facilitation Ireland’s vision for a Single Window is that companies will only have to submit export or import information once electronically, and that this information can then be used by a range of public and private sector bodies. This vision goes beyond what many countries have already implemented, and would put Ireland at the cutting edge of trade facilitation globally. Benefits for exporters and importers are seen as;

1. 2. 3. 4.

Cutting costs through reducing delays; Faster clearance and release; Predictable application and explanation of rules; More effective and efficient deployment of resources; 5. Increased transparency; 6. Ireland can become a leading destination for the Supply Chain Logistics operations of foreign multi-nationals; 7. Ireland can develop a niche, high-value software industry around developing Single Window solutions based on the Irish experience. The Single Window system should have the following features: • The system should be aimed at all businesses trading internationally but special attention should be given to

SMEs, and as such the system should be simple as possible to use. Comprehensive operating instructions and guidelines should be created for users. Help Desk and user support services, including training, should be established, especially in the early implementation phase of the project. The Help Desk can also be a useful means for collecting feedback information on areas of difficulty and bottlenecks in the system and this information can be a valuable tool in its further development. The need for and value of practical training courses for users is critical, especially in the early implementation phase of the project. • All options will be examined regarding user-charges for Single Window. This could range from a system totally financed by government (e.g. the Netherlands) to an entirely self-sustainable model based on user fees (e.g. Mauritius). Also, the potential for public-private partnerships should be explored. • Single Window will facilitate payment of government fees, taxes, duties and other charges, as well as facilitating payments between the consignee and other private sector bodies. This can be a very attractive feature for both government and trade. This element makes it essential that the banks are involved in the process at an early stage. • In order to ensure compatibility with other international systems and applications, documents and data models must be based on international standards and recommendations, particularly those developed at the UN/CEFACT and the WCO. The harmonisation, simplification and standardisation of all data used in international trade are an essential requirement for smooth automatic operation of the Single Window.

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:03

Page 20

WATERFORD AT THE FOREFRONT OF ECONOMIC DEVELOPMENT

County Waterford zoning

County Waterford is an attractive business location. The strategic location of the County between the gateway cities of Cork and Waterford ensure that the critical mass is in place to provide services and skills to a range of industries. Availability of serviced sites combined with world class energy, telecommunications and waste management infrastructure means that Waterford is a globally competitive location. Building on these strengths, Waterford County Council has put economic development at the top of its agenda. At an ‘Invest in Waterford’ seminar, which was held in October 2006, the County Manager, Ray O’Dwyer and the County Mayor, Mary Green, both made the bold statement

‘Waterford is Open for Business’. This is not a shallow statement, but is the first stage of a strategy that is being driven by Waterford County Council to attract investment to the County. Through the work of an Inter-Agency Forum, with representatives of IDA Ireland, Enterprise Ireland, FÁS, and other Government departments and state agencies, a range of actions have been already implemented to improve Waterford’s competitiveness as a business location. This forum provides an agile response that involves all relevant agencies to local economic development.

A marketing programme to promote the County as a prime investment location is being implemented. As part of this campaign, a website www.investinwaterford.ie was launched. This website is unique in Ireland as it provides investors with useful information on doing business in Waterford, including location maps and details of industrial and commercial land that is zoned and available for development.

THURSDAY FINAL

21/03/2007

15:04

Page 21

In parallel, the Council has established a website aimed at attracting workers to Waterford www.workinwaterford.ie. This website asks those who want to live and work in Waterford to register their skills with the Council. This site is also a useful tool whereby employers can target job opportunities to those who are looking for work in the County. The objective is to provide businesses with a database of potential employees seeking jobs in Waterford. According to Brian White, Director of Community and Enterprise with Waterford County Council, the Council is very happy with the response to the website to-date. ‘In a very short period over 250,000 hits the website. This illustrates the level of interest in working and living in Waterford’ he added. Developing skills in the County, Waterford Institute of Technology has benefited from significant capital investment. An increasing number of programmes and courses are being made available. WIT is also expanding its outreach programme and an MBA programme was launched in Dungarvan November 2006. Courses are taking place in the Chamber of Waterford County Council, where the next night decisions on housing, planning and zoning are made. In addition, the agencies in County Waterford have made strong links with third level institutions outside of Waterford, ensuring that all skills and education requirements businesses located in County Waterford can be squarely met. This is one of a suite of initiatives being driven by Waterford County Council and the members of the Inter Agency Forum. In an effort to develop entrepreneurship in the County, Waterford County Council, Enterprise Ireland, Waterford County Enterprise Board and

Dungarvan Town Council contributed €700,000 towards the development of an enterprise incubation unit in Dungarvan.

Ger Enright of Waterford County Enterprise Board stated that ‘the link with the Innovation Centre in Waterford Institute of Technology is important for us as it will help entrepreneurs in Dungarvan and West Waterford to be part of a network of innovation that is emerging throughout the County as a result of programmes run by WIT’. The Council acknowledges that an important factor is the availability of suitably zoned land. Strategic zonings have been designated in centres throughout Waterford County. ‘We want to show that we are serious when it comes to economic development’ stated Ray O’Dwyer, County Manager. ‘We have and will continue to put in place the lands, services and infrastructure required by investors. I am glad to see that the staff of the Council have taken a cando approach to economic development and we are committed to facilitating the processes as much as we can’ he added. Mr O’Dwyer also welcomed the recent announcement by the European Commission to allow continuation of Regional Aid to the South East beyond 2007. ‘Considering the success of Ireland, this was not anticipated. It will mean that Waterford will remain on a level playing pitch when compared with the regional aid available in the Border Midlands and Western Region until at least 2013. We welcome investors to visit our County and see that Waterford is truly a top-class business location’ he stated.

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:04

Page 22

TOWARDS A BARRIER FREE TRANSATLANTIC MARKET Kathryn Hauser, TABD US Executive Director & Marie-Therese Huppertz, TABD EU Executive Director

Many people might qualify the transatlantic relationship as “difficult”, due to rifts over political & military strategies and trade disputes, which regularly hit the press. However, this image does not reflect the deep level of integration that characterises our economic trade and investment relationship, which is in a very healthy state indeed. Economic ties between the EU and the U.S. are still by far the strongest in the world.

The TransAtlantic Business Dialogue (TABD), a group of more than 30 Chairmen and Chief Executives of major EU and U.S. multinational companies, has therefore made the establishment of a Barrier Free Transatlantic Market its main goal.

Europe and the U.S are each others main trading partners, representing the biggest trade relationship in the world, despite the impressive economic rise of other countries like China and India. A recent study estimates that the transatlantic economy continues to generate $3 trillion in commercial sales a year and employs some 14 million 1 people on both sides of the Atlantic . Importantly, investment flows across the Atlantic are very strong: in 2003, the total amount of two-way investment was over €1.5 trillion, composed of €731 billion of EU Foreign Direct Investment (FDI) in the U.S. and around €772 2 billion of U.S. FDI in Europe .

Today, the U.S. and EU governments are working towards the goal of reduced regulatory barriers on the basis of a very detailed work program spanning many areas.

A recent study estimates that the transatlantic economy continues to generate $3 trillion in commercial sales a year and employs some 14 million people on both sides of the Atlantic. And yet not all economic potential has been unlocked: many regulatory barriers for trade and investment persist. The OECD has calculated that further transatlantic liberalisation of trade in goods, services and investment is estimated to increase U.S. and European GDP by as 3 much as 3% . So there is room for improvement and much to gain. 1 2 3

Achieving such an ambitious goal requires both a well functioning multilateral trade system and much deeper regulatory cooperation across the Atlantic. The first priority is to reach a successful outcome of the WTO Doha Development Round. With this multilateral agreement in place, all businesses, including TABD companies operating globally can rely on predictable and transparent international trade rules to manage increasingly complex global supply chains and business operations. This will then enable further transatlantic economic integration, a goal which is supplemental and fully compatible with multilateral trade liberalisation.

While the TABD has welcomed the steps taken and the progress achieved so far, we have to recognise that more needs to be done to guarantee a favourable transatlantic business climate that will generate business expansion, job creation and global competitiveness. That is why the TABD strives for a politically binding “Framework Agreement” between the EU and U.S., which should provide the basis for the establishment of a truly ‘Free Transatlantic Market’ within an agreed timeframe. Such a Framework Agreement, which could be kick-started at the next EU-U.S. Summit. In the view of the TABD, such a Framework Agreement should be based on the principles of establishment of free movement of goods, services, capital and investment; enhanced transatlantic regulatory cooperation; and joint actions in key areas such as protection of intellectual property rights and innovation in a global economy; and accompanied by political oversight to ensure progress in its implementation.

D. Hamilton and J. Quinlan, The Transatlantic Economy 2006, Center for Transatlantic Relations. http://ec.europa.eu/trade/issues/bilateral/countries/usa/index_en.htm Organisation for Economic Cooperation and Development, 2005: http://www.oecd.org/dataoecd/6/4/35604630.pdf

THURSDAY FINAL

21/03/2007

15:04

Page 23

The establishment of the overarching principles of free movement of goods, services, capital and investment is a long term goal; it requires mutual understanding of each others regulatory systems, agreement to begin work to address existing regulatory barriers and develop mechanisms for cooperation before adopting new regulations and standards globally. Such a framework should include mechanisms for early warning through early notification before issuing new rules, a joint approach to impact assessments, cost-benefit analysis, and science-based quantification and analysis and post-regulatory monitoring. It should build a system allowing for both Congress and the European legislature to be part of the process and provide for means to involve other stakeholders. Furthermore, the U.S. and EU should commit to an open investment climate in their respective regions. In spite of the impressive magnitude of transatlantic investment flows, restrictions still remain and take many forms. These include foreign ownership restrictions, non-transparent or overly burdensome and lengthy notification and licensing requirements for non-residents, limitations in access to public procurement or resources in the areas of research and investment or other obligations in relation to special security requirements.

Measures to guarantee national security are of course justified and the TABD does not question their necessity. However, a balance between necessary security regulations and the free flow of people, goods, investment and cargo must be struck. Let us highlight just one recent example; New rules recently adopted by the U.S. House of Representatives to scan in foreign ports 100% of the cargo destined for the U.S., will inevitably jeopardise transatlantic trade.

Immediate steps are being taken to work towards mutual recognition of supply chain security standards, which have been developed under the EUâ&#x20AC;&#x2122;s Authorised Economic Operator status and the Customs and Trade Partnership Against Terrorism in the U.S.

Ultimately, the EU and U.S. must develop a sustainable long term solution, by coordinated investment and by utilising existing technologies to establish cost-efficient capabilities to secure travel and trade. [We must] work towards mutual recognition of supply chain security standards, which have been developed under the EUâ&#x20AC;&#x2122;s Authorised Economic Operator status and the Customs and Trade Partnership Against Terrorism in the U.S. Improving global competitiveness of our highly interlinked economies requires new way of thinking and approaching common challenges, such as climate change and energy security, the impact of pandemics or demographic trends on our health care, and the impact of rampant counterfeiting and piracy; TABD is convinced that cooperation is a means to enhancing transatlantic innovation capacities through joint research programs and other joint actions. That is why TABD supports the Joint IPR Enforcement Strategy and advocates more cooperation and joint efforts in other areas, such as energy efficiency and security.

German Chancellor Angela Merkel, who has taken up the EU and G8 presidencies, has acknowledged that the U.S. and EU economies are based on the same values and that the two blocs should make further transatlantic economic integration a priority. This vision has been supported by the EU Commission President Barroso. Importantly, the U.S. Senate and EU Parliament have called for completion of a Transatlantic Market by 2015. The TABD encourages government leaders on both sides of the Atlantic to use this favourable climate to establish a true Barrier Free Transatlantic Market. Lastly, and importantly, political oversight and implementation of the Framework Agreement and its objectives must be guaranteed, by agreeing on a roadmap of steps to implement the principles outlined above, and by submission of an annual progress report to the U.S.-EU Summit Leaders prepared jointly by ministers responsible for overall implementation of the Barrier-Free Transatlantic Market.

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:04

Page 24

IMDO - IRISH MARINE DEVELOPMENT ORGANISATION SPEARHEADING THE DEVELOPMENT OF THE IRISH SHIPPING INDUSTRY Mr. Murphy began by outlining the tasks with which the IMDO is charged; “The Irish Marine Development Organisation was first established in 2000. Our statutory mandate is to support the development of the shipping sector in Ireland. We advise the Government in terms of policy development, including tax and fiscal policy and business development in the area, including research. Overseas development and marketing of the sector is also a function that we fulfil and is very important.” In terms of the development of the sector, the IMDO has been active working right across the entire shipping and maritime transport services sector: Murphy elaborates,

The IMDO is the first dedicated development, promotional and marketing agency for the shipping services sector in Ireland. It is a branch of the Marine Institute which comes under the Department of Communications, Marine & Natural Resources. The Institute was set up under the 1991 Marine Institute Act. CEO Financial spoke to Glenn Murphy, The Director of the IMDO regarding trade facilitation and the role that the IMDO plays within Ireland’s dynamic economy.

“Prior to 2000, the main stream Irish shipping industry was facing a slump due to the relocation of operating companies to what were at the time, more tax-friendly locations. Irish ship owning and operating companies fell to less than 40 ships in a short space of time. The Government obviously saw this as a problem which needed addressing and we advised them on a strategy which included changes the tax structure with regard to maritime operators. Ireland now has one of the most attractive tax rates in Europe for shipowning, management and ship operations. We are one of the most benign and competitive economies in this regard. As a result of this, that trend has been reversed. We are now seeing considerable growth throughout the sector as a whole. This is reflective of the global growth in this area. There are now about 170 ships owned and managed in Ireland, which is continuing to grow.” Where else has there been growth in the sector? “Well, an interesting point to make on that front is that, the Irish shipping services sector is an important link in the chain for the Irish economy. In 2006 we estimate that goods to the value of 120 billion euro passed along and

THURSDAY FINAL

21/03/2007

15:05

Page 25

THURSDAY FINAL

21/03/2007

15:05

Page 26

through the all Ireland maritime supply chain. Shipping companies and Ports in Ireland have continually invested and reacted ahead of the curve and have been a silent but effective partner in the Celtic tiger success story. Contrary to the popular belief that capacity should be adjusted to meet demand – we have seen that companies that invested in creating added capacity have actually facilitated more growth and improved economies of scale for exporting companies. The reduction of “per-unit” costs that increased capacity brings, has lead to increased volumes ultimately being shipped. We have experienced an 84% growth in capacity on LO-LO (Lift On-Lift Off) and 86% growth in RO/Ro shipments, over the last 10 years.” That’s good news for the industry and for export markets such as the US.

“Yes, the US is now the largest export market and very important market for Ireland. Despite the fact that our shipments will go via major European ports, continued investment in frequency of services to the main continental hubs provides greater choice, frequency and competition for Irish exporters to the US.” People often don’t realise the far-reaching extent of the shipping sector and how it overlaps with many other aspects of the economy. “In terms of employment; over 8,600 people are employed in the sector nationwide, within approximately 350 companies. These companies boast a combined turnover of €1.6 billion – so it is very considerable. This business is derived from everything from the ports, liners and ships, all the way to the banking, financing and leasing that is involved. Many banks also now operate in the specialised area of maritime banking.” What does Murphy think of the Authorised Economic Operator programme and the impact it will have on the Irish shipping industry?

“Well, we understand from the promoters that the AEO programme should ultimately lead to gains in efficiencies, and if this means that Irish goods are more competitive in the global market place well then this level of innovation

is something that we support. The IMDO are enthusiastic about anything that is focused on competitiveness and maximising our productivity. If we can continue to help Irish companies to reach other markets and deliver competitive advantages to them while doing so – that is a positive thing.” I ask the director his views on the United Nations CEFACT conference coming to Dublin and Ireland’s plans to become a seminal trade facilitation hub? “I think it’s a great news that such an important gathering of UN decision makers is coming to Dublin to discuss trade facilitation”, he responds, “Ireland has a track record of tackling issues that appear difficult, doing things well and setting examples. It is therefore important that UNCEFACT are coming as it provide Ireland with a fantastic opportunity to take the lead on this important issue.”

THURSDAY FINAL

21/03/2007

15:05

Page 27

IIFA TRADE FACILITATION & THE FREIGHT FORWARDER By Colin Walsh, CEO of the Irish International Freight Forwarders Association

Ever since the international trade markets and fairs of the Middle Ages in Europe, when the complications of domestic as well as international trade caused merchant traders to look for specialist expertise, to manage the movement of their goods, the freight forwarder has been dealing with matters of trade facilitation as a matter of routine. Some of the "complications" of those days included; many different standards of weights and measurements; customs charges applied by the hundreds of local authorities through which goods passed (on the 26 km stretch of turnpike between Aarau and Sursee in Switzerland alone there were six customs control points*). To these difficulties could also be added the problems presented by foreign languages, documentation, communication over longer distances and payments. Since those times international trade has seen the imposition and withdrawal of trade barriers, as political relationships between trading nations waned or waxed, and as the idea and application of free - or even bi-lateral trade was either embraced or abandoned. Now with the realisation and acceptance of the benefits to all nations of free trade which was manifested by the acceptance of Customs administrations of that fact, particularly in the developed world already 15 to 20 years before 9/11, the subject of Trade Facilitation can be seen in context as a continuation of efforts, even if sporadic, over the centuries. Since 9/11, of course, the recognition of the terrorist threat to the security of countries and international trade and supply chains has lead to the necessity for the World Customs Organisation to include physical security in its list of major objectives. The spark which ignited all these new approaches was Information Technology and its application.

Colm Walsh, CEO of the IIFA

The SAFE Framework of Standards, which was produced by the World Customs Organisation's High Level Strategic Group, was unanimously adopted by the WCO Council in June of 2005. As of September of last year 138 of the 169 WCO Members had signed a Letter of Intent to implement the SAFE Framework.

The theory underlying the SAFE Framework is that appropriate, focused and layered trade security measures will actually facilitate the movement of legitimate trade across national boundaries. In his paper delivered to the world body of freight forwarders at the FIATA Congress in Shanghai last September Michael Schmitz, Director Compliance & Facilitation, World Customs Organisation said "The SAFE Framework is the realisation of the fact that security and facilitation are inextricably intertwined or opposite sides of the same coin".

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:05

Page 28

It foresees the more rapid release of legitimate cargo on importation by identifying traders that demonstrate an appropriate degree of security within their supply chain. This is where the AEO comes in to the picture. Authorised Economic Operator status under regulation 648/2005 will be granted to applicants who meet common criteria relating to customs control systems, have financial solvency and a satisfactory compliance record. The AEO statues may be granted in any of the following terms: 1. Simplified Procedures 2. Security and Safety or 3. Simplifications and Security and Safety Once granted, the status of AEO will be recognised by all Member States.

The expression "facilitating legitimate trade" has a resonance when one considers the following: Counterfeiting accounts for 5-10% of all global trade or $144 billion annually word wide according to the EU. The World Health Organisation says that 5-8% of world wide trade in pharmaceuticals is counterfeit. As if to underscore this, an item in the Journal of Commerce of March 7th 2007 reports US Customs and Border Protection announcing the seizure of more than 100,000 pieces of counterfeit Fendi and Gucci handbags and other "fraudulent merchandise" worth an estimated $13 million on the container ship "Ever Ultra" which docked at Port of Oakland from China. Obviously there will be many benefits to be gained from the successful implementation of the SAFE Framework. It is a concept that moves Customs focus from importation to exportation for security purposes and by so doing, the facilitation of legitimate cargo upon importation will be increased. The idea is to identify high-risk shipments early in the global supply chain i.e. AT or BEFORE exportation.

Benefits of AEO status will include:Fewer examinations Faster processing of legitimate cargo Lower administrative costs. Improved opportunities of lower insurance rates for cargo. Fast resumption of trade activity following any incident. Overall the SAFE Framework will have benefits for those involved in international trade, the chief of which will be Standardised Customs procedures that secure, facilitate and promote international trade. The Irish International Freight Association and its 100 member firms look forward to continuing the traditions of our historical profession in helping to expand and improve international trade in cooperation with the Irish Customs administration and through it the World Customs Organisation and the United Nations Centre for Trade Facilitation and Electronic Business (UN/ CEFACT). * Wilhelm Zeilbeck "Geschichte der Schweizer Spedition". (The History of Swiss Freight Forwarding -2004) IIFA Strand House, Strand Street, Malahide, Co.Dublin Phone: 01 8455411, Fax: 01 845531 , E-mail: iifa@eircom.net

THURSDAY FINAL

21/03/2007

15:05

Page 29

NITL WHAT THE TRANSPORT AND LOGISTICS INDUSTRY NEEDS GOING FORWARD Dr. Bernd Huber, Edward Sweeney National Institute for Transport and Logistics (NITL) www.nitl.ie

The transport industry - particularly in road transport - is under serious competitive pressure. Rising costs evident but not limited to traffic congestion, fuel and insurance combined with a market place that has become more demanding in relation to price and service, has resulted in a situation where companies have had to seriously reassess the nature of their competitive advantage. The competitive strategies of companies in the sector are being reviewed in light of the effective commoditisation of transport as a direct result of the traditional strong emphasis on cost and price reductions. The “race to the bottom” is increasingly being replaced by a strategic rationale which focuses on differentiation in the product offering. This gives companies in the transport sector the potential to move away from purely price-based competition towards the provision of a range of value-adding and knowledge-intensive services for trade facilitation. It is being driven by developments in the field of supply chain management (SCM) which places a strong emphasis on higher levels of integration between supply chain participant companies and on the need to focus on what really adds “value” – i.e. what the end-customer is willing to pay for.

The three big drivers for this are: a) globalisation - supply chains have become more global and therefore more complex.

Dr. Bernd Huber

b) outsourcing – supply chains have become more 'virtual' and global relationship management has become more central as a result. c) e-logistics - complex global and virtual chains require quite sophisticated levels of information and communication technology (ICT) for their effective control and management. These developments have shifted the focus of the customers towards service-rich, “one-stop shop” transport and logistics services, allowing them to focus on their real core competencies in design, marketing, selling and other key business processes. For the transport and logistics sector to respond positively to these changes it needs to focus, broadly speaking, on two key areas (the “soft” and “hard” wiring respectively).

A 4PL is a supply chain integrator that assembles and manages the resources, capabilities, and technology of its own organisation with those of complementary service providers to deliver a comprehensive supply chain solution.

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:05

Page 30

with a high level of integration in the organisational structures and informatics. We can expect that logistics service provision is evolving from a more transactionalbasis to a more strategic one in nature, as companies expand their operations, technological capabilities, and their services to meet the increasing number and complexity of demands by their customers.

The latter (i.e. the “hard” wiring) is based largely on the potential role of ICT in improving (i) the level of customisation of transport and logistics services and, (ii) the level of integration between transport and logistics service providers, their customers and other key supply chain partners. Recent years have seen a proliferation of ICT solutions, e.g. RFID, with the potential to make real advances in these areas. Transport service provision will build more around ICT platforms that permit greater pipeline visibility. Ed Sweeney

The former is based on the need to build new and innovative relationships with customers, based on the concepts of partnership rather than on traditional adversarial approaches.

However, the transport and logistics sector has for a variety of reasons, such as the financial risk involved or the lack of training and education, been slow in adopting these solutions. Wider dissemination of appropriate technology has the potential to contribute significantly to the strategic differentiation of firms – particularly smaller firms – in the sector.

The desire is to move towards mutually beneficial (i.e. “win-win”) relationships to replace traditional arms-length (often “zero-sum game”) relationships. This requires a paradigm shift in the ways in which customers and suppliers relate and interact with each other; it requires that hostility and mutual suspicion are replaced by trust and transparency. Collaboration is becoming a critical capability as companies increasingly migrate to extended supply chains.

One of the necessary skills in the transport sector will therefore be the ability to manage increasingly complex supply chains, as companies in general are challenged by a combination of mass customisation, shrinking product life cycles, rapid inventory depreciation, complex multisourced supply chains, customer involvement in design, rising expectations of retailers and consumers, and the resulting need for co-ordinated data communications. This forces the transport sector into integrated supply chain management strategies.

This does not happen overnight but there is evidence that it is beginning to take place. The evolution, for example, of the so-called fourth-party logistics service provision 1 (4PL) sector is an example of this. Co-operation between manufacturers, shippers and logistical service providers is becoming more long-term (in nature) and is combined

Evidence is also available in the 2005 NITL report ‘Global Competitiveness: Chain Reactions’, where 1073 firms were surveyed in the Republic of Ireland and in Northern Ireland across a broad range of sectors. Respondents identified that the outsourcing of transportation is going to accelerate in the next three years, along with just-in-time

THURSDAY FINAL

21/03/2007

15:05

Page 31

and overnight deliveries as well as shorter delivery times. Companies based in the Island of Ireland have the natural disadvantage of a location peripheral to significant markets and sources of raw material which result in higher transport costs and high dependence on sea ports. For example, Irish food exports transit costs to southern Europe can be 20% of total consignment value, with the UK being the land-bridge for Irish exports. The evidence suggests that companies in the Island of Ireland need to leverage their SCM capabilities and add value to their customers in delivering cost-effective multi-modal supply chain solutions. Successful transport organisations of the future will be operating in an increasingly complex environment of well integrated supply chain networks communicating over well developed ICT systems on a real time basis. The design of supply chain solutions is a highly skilled, knowledge-intensive and complex activity, reflected in a shift from “box moving” to the design and implementation of “supply chain solutions” developments. Education and training can best be addressed by stimulating the development of industry-relevant logistics and SCM resources and skills.

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:05

Page 32

BANKING AND THE ELECTRONIC SUPPLY CHAIN The recent evolution of international commerce has brought banking in a new direction – right into the supply chain. Corporate customers are now demanding a bank that understands their needs and has the capacity to facilitate their supply chain requirements through additional electronic services. This provides banks with the opportunity to sell more services and acquire more customers. This was the rationale behind the recent acquisition of supply chain services firm, Vastera, by JP Morgan Chase. JP Morgan saw a company which operated in a space that it wanted to be in, but was outside their strict area of expertise. Forrester, an IT research firm, commented on the trend thus, “Financial services providers lack the expertise to synchronise the physical supply chain with the financial supply chain, making it hard for their clients to make sense of their financial needs in the context of their business objectives.” According to Justin Pugsley, of Global Trade Review,

“The theory goes that by providing the platform for the electronic transfer of [trade] data, banks can become an integral part of that supply chain. That, in turn, helps cement the relationship with the client.” This point was affirmed by Elena Hergass, VP of Trade Finance in Deutsche Bank,

“It’s not just about channels for transmitting documents in electronic format. It’s about distinct solutions for the client’s supply chain.” HSBC are another bank which see this area as crucial going forward,

“E-enablement allows banks to be more responsive to financing, risk management and cash management needs of corporates”, declares the global head of supply chain business at HSBC, Alan Beattie.

THURSDAY FINAL

21/03/2007

15:05

Page 33

The myriad of opportunities which are presented to banks that enter this sphere range from risk mitigation, to trade finance, to insurance, not to mention opportunities regarding the logistical information they find themselves in possession of.

An electronically controlled supply chain provides the bank with increased visibility and therefore affords them more comfort in making decisions regarding financing. The onset of this technology is set to create a gap in competitiveness between early moving banks and banks that are slow to embrace these changes. ABN is one of the key players in supply chain finance, and one of the earliest to adopt electronic formats. Robert Dungey, their head of global trade and supply chain business, explains that,

“If a bank does not provide supply chain management and finance, including traditional trade finance, there is a risk of losing the overall business with any particular client to competitors who provide a comprehensive suite of supply chain products.”

This signals a critical departure from tradition banking, where financial services were provided as almost ancillary to the trading itself. It brings it to a point where the bank is taking an active, as opposed to passive role in facilitating trade through the electronic supply chain which affords them an opportunity to provide additional services, have access to more timely information flows and mitigate their risk. Traders will avail of the best services on offer if they make a critical difference to their business. One foot in the electronic supply chain allows a bank to be far more sensitive to traders’ needs, and provide more personalised solutions. It is on points such as these that clients are won and lost. As Pugsley very correctly summed up,

Now, this type of technology “will form another part of the trade finance and supply chain infrastructure. Clients will expect it as part of their service.”

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:05

Page 34

LETTERS OF CREDIT AFTER CARE LCAC TRADE SERVICES LIMITED Richard Gardner took some doing as the terminology used was for banking and the other occasional article referred to shipping. Thus I learnt the first rule - the UCP was not a rule book but a book to guide the exporter and banker and thus was open to interpretation from both parties. To most exporters one of the most frustrating things in exporting when dealing with letters of credit is being able to produce the shipping documents correctly when first presenting them to the bank and in most cases the bank will reject documents on first presentation. This is an important issue as most exporters use the letter of credit as an instrument to guarantee payment.

Richard Gardner, LCAC

LCAC stands for Letter of Credit after Care. What’s its aim? To offer a service to exporters which a bank or freight forwarder cannot offer in such detail. Why was the company formed? To understand this, you have to understand the author of this article, namely me. So let’s start at the beginning, I started work some 30 years ago for a large tobacco company in their export division. Initially employed as a shipping clerk, I progressed into the documentation area where my duties were preparing shipping documents for presentation to banks, initially under collections then presenting under letter of credits. I was taught by somebody nicknamed the ‘old prof’ who had some 30 years experience in exporting and, to say the least, knew all the tricks in the book. My homework at that time was to learn and understand the UCP 290 rules (God bless its soul) which I have to say

The publication of UCP 400 at the time actually stated that over 78% of all export documentation is rejected on first presentation. Anyway, to move along with the story, having learnt an awful lot from the prof, he retired and as luck would have it I took over the department and with it the responsibility, thereby ensuring the company’s shipping documents were presented to banks and paid in accordance with L/C credit terms. Now it was at this time when things took a turn in my life and destiny gave me a choice on which direction to take, in the absence of our messenger and combining a business meeting with a bank in the City of London I took some export documentation to a particular major merchant bank. On presenting the documents I was asked if I had ever thought about joining a bank in documentary credits. The outcome was that I agreed to sit a test with other bankers on what was initially a test on how many discrepancies we could spot on a presentation of dummy documents. I was surprised that the result gave me an opportunity to be offered a job within the bank, and given the mortgage interest rate at the time and what the bank was offering, it was an easy decision, thus ended my career in corporate exporting. The early days in Banking became a complete learning curve compared to everything I had learnt from the other side, the discipline on what you could do and what you could not do; the culture shock was enormous. The idea that the UCP manual was a guide book became the opposite - THE UCP WAS A RULE BOOK.

THURSDAY FINAL

21/03/2007

15:05

Page 35

Now forgive me for being cynical here but in the twenty years in banking I worked for many banks, most were ‘A’ Rated, and found to my astonishment that each bank had its own interpretation of UCP rules 290, 400,500, and no doubt 600.

The one thing I learnt in banking was that the perception from exporters that banks withhold funds to gain interest whilst documents have been rejected and are awaiting acceptance from the buyer, is foolish and incorrect. I also realised that some banks were inflexible when certain errors in documentation were detected. These could easily be rectified by the bank, but would not be as the bank were not responsible or legally bound to do so and thus the exporter had to change/rectify their documents from something as simple as marking an invoice as original or an insurance certificate as a copy. This simple conception could result in exporters incurring discrepancies such as, an L/C expires or late presentation being incurred - frustrating and costly for the exporter. Finally, having reached the top of my profession within the Trade Finance arena in banking, I decided to return to the

corporate environment, knowing I had the knowledge on both sides which resulted in being employed for ten years as Global Trade Finance Manager at Tate & Lyle PLC. Anyway the whole reason for this short résumé is to point out that the experience gained working in both corporate and banking environments gave me an insight into setting up a company that understands what the exporters’ concerns and requirements are, as well as understanding what banking requirements are. To date we have been able to offer services to small, medium and FTSE 100 companies in both the UK & USA markets, we offer Trade finance instruments that most exporters from small to large don’t even know exist. Give us your problem and you will have an answer, from documentation to structuring deals.

LCAC Trade Services Limited employs people that have worked in both corporate and banking environments. We pride ourselves in knowing what the exporter is trying to achieve and understanding what the bank requires. This makes LCAC a unique trade services supplier.

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:05

Page 36

MICROSOFT IN IRELAND A WORLD CLASS LOCATION FOR A WORLD CLASS COMPANY

Joe Macri, Managing Director of Microsoft Ireland

Joe Macri, Managing Director of Microsoft Ireland describes Microsoft’s experience of the island and why he thinks it is the best place from which to launch a European initiative. “Microsoft first came to Ireland in 1985”, explains the managing director, “as a relatively small, 10 year old company which was looking for a base from which to tackle the EU market. Ireland had positioned itself as the destination of choice due to its strong and well-educated workforce, its competitive rate of corporate tax and the fact that it is English speaking.” “We had a vision at that time of having a world class manufacturing plant which employed 100 people. Now we have 1,200 full time employees here and do no manufacturing. So that gives you an idea of how things have changed since then.” Indeed it does. I then asked Macri about the functions of the Microsoft Ireland operation.

“We have four divisions here, the EU operations centre, the European Product Development Centre, the Irish Sales & Marketing Services Group and the European Development Centre which is responsible for R&D. Microsoft Ireland is therefore a very important hub within the context of Microsoft internationally, as we are responsible for many functions of the business throughout the EU, the Middle East and Africa.” The issue of government is one which is crucial to a multinational when operating in any country. How has the Irish government treated Microsoft after its establishment in the country? “Well, the Irish government has been great”, declares Joe, “The IDA have continually helped us in various ways, as has Science Foundation Ireland with regard to the R&D side of our operations.” “The impact that Microsoft has had in Ireland has been quite extensive. We estimate that 5,000 people are employed indirectly as a result of our being here. We invest €250 million every year in the Irish economy through our supply chain and we are responsible for 5.6% of GDP in Ireland.”

THURSDAY FINAL

21/03/2007

15:05

Page 37

“So, Ireland has been good to us. We like to show our appreciation by giving back to society through corporate social responsibility programmes. These include partnerships with Enable Ireland, the Digital Communities Programme, FIT and the ISPCC. In addition, we recently commissioned economist Paul Tansey to compile a report entitled, “Productivity: Ireland’s Economic Imperative”. The report has been a contribution to the ongoing debate and analysis about Ireland’s economic future and has helped place the issue of productivity at the centre of Ireland’s economic future.”

because of the fact that there was so much FDI during that era, there is now a critical mass of management expertise, technological expertise and innovation in the country. The capabilities, advantages and infrastructure are all here already, so for a new player, I think it’s the best place to come.”

“Microsoft also enables me to dedicate 15 – 20% of my time to projects outside of the business,” the managing director informs us, “I was was appointed Chairman of the Small Business Forum by Minister for Enterprise, Trade and Employment, Mr. Micheál Martin T.D., I serve on the board of the Health Service Executive, I’m on the National Executive Council of IBEC, and I am also a board member of the Irish Management Institute (IMI). So, as well as creating a successful business – we also seek to contribute to the societies we operate in.”

“There is a focus right now on looking at issues of competitiveness. This is a healthy and timely thing to do and we strongly believe that a conserted effort to help raise productivity levels will benefit Ireland Inc – and the companies that are located here. We believe so strongly in this issue that we are partnering with the Irish Management Institute (the IMI) to develop the National Productivity Centre. This will be up and running this summer and will highlight the role that management capability and IT deployment can have on addressing productivity.”

So, how would Macri recommend Ireland itself as a country to do business from? “I think that Ireland is an excellent choice for any international company wishing to tackle the EU market. The reasons that we came here for initially still exist, but

“Ireland has struck the right balance on the regulatory front, balancing the needs of the individual, the economy, organisations and society in general whilst keeping the administrative burden to a minimum.”

“Our message is that, in hindsight, Microsoft’s decision to locate in Ireland was and continues to be, an excellent decision. The government is very pro-business. It has been a very successful location for us and we have a great team of people working here with us.”

Taoiseach Bertie Ahern and JP Courtois, Microsoft

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:05

Page 38

DIAGEO IRELAND AND ITS GLOBAL SUCCESS Irish Cream are known and enjoyed worldwide. We operate in more than 180 markets across the world, with over 20,000 employees and annual turnover is approximately GBP £9.7billion. Diageo’s roots in Ireland go back well over 200 years to the establishment of Smithwicks’s in Kilkenny in 1710 and Guinness at St. James’s Gate in 1759. Since then the businesses that form Diageo operations have been at the forefront of both Irish business success and direct community involvement and support. Today, Diageo’s operations in Ireland are collectively a €1.8 billion business bringing the iconic brands, Guinness, Bushmills and Bailey’s Original Irish Cream, to consumers in over 150 countries across the world. Ireland is one of

Diageo is one of Ireland’s leading companies, with a long and proud tradition of commercial success and community involvement. Through great brands and products we have assured our position as Ireland’s outstanding premium drinks business. Diageo is a relatively new company created by the merger in 1997 of Guinness plc and Grand Metropolitan plc, two of the world’s most well known drinks companies. With a collection of outstanding brands, Diageo is now the world’s leading premium drinks business. We have the broadest and most recognised range of premium drinks brands in the world. Our global brands of Guinness, Smirnoff, Johnnie Walker and Baileys Original

THURSDAY FINAL

21/03/2007

15:05

Page 39

Diageo’s leading markets and is a vital production centre of premium brands and ingredients for domestic and worldwide sales. The Global Brand teams based in Ireland develop sales and marketing strategies to meet the needs of international markets worldwide. With exports of over €800million annually, Diageo is one of Ireland’s most important exporters in the high value-added food and beverage category.

Diageo is producing, distributing and marketing some of Ireland’s best- known premium drinks. Guinness is the world’s most famous and best selling stout, and an investment of €40million has been made in the St. James’s Gate Brewery in Dublin to increase the brewery’s capacity by 50%. This has meant that over 50% of all Guinness brewed in Dublin is exported to the International market and St. James’s Gate is the second largest brewery in Europe. Recent investment has also been made in our Waterford brewery to meet the growing demands for Guinness in global markets. Budweiser and Carlsberg, both brewed under license by Diageo, are key brands in the beer market in both Ireland and internationally. Bailey’s Original Irish Cream, of course, is highly regarded abroad – it is the world’s number one liqueur and number six spirit brand and all of the Bailey’s produced is done so in its plants in Dublin and Antrim. Bailey’s now accounts for over 50% of Ireland’s spirits exports. The Guinness Storehouse at St. James’s Gate opened in 2000 having been completely refurbished to allow visitors to see and hear the story of the history and evolution of Guinness. It is now Ireland’s must-see visitor attraction with almost 1 million visitors annually. Guinness Storehouse is now the 5th most popular brand experience

in the world and allows Diageo to promote the story of Guinness to a world-wide audience. Diageo’s operations are located throughout Ireland. These deliver premium brands to consumers in Ireland and abroad. The Diageo range of premium brands includes nine of the world’s top 20 premium distilled spirits brands. The North American market is one of our top priorities and represents a great opportunity for Diageo in the future. We have had a significant presence in Africa for many years. Guinness Foreign Extra Stout is the continent’s most widely available beer. In fact the Guinness brewery in Nigeria is the second largest brewery after St. James’s Gate in Dublin. In addition to the top markets, we are widening and deepening our focus on the developing markets, which include countries of considerable potential such as China, Russia, India and Brazil and these countries offer export opportunities for Diageo Ireland to advance. Diageo Ireland is clearly focused on growing both our domestic market share, and increasing the scale of our global export sales by leveraging the quality of our brands, production and location within Ireland.

FACILITATING INTERNATIONAL TRADE

THURSDAY FINAL

21/03/2007

15:05

Page 40

8760 cover.qxd

21/03/2007

15:37

Page 4

8760 cover.qxd

21/03/2007

15:29

Page 1