THE Irish Exporters Association (IEA) will be calling on the Government to create a greater competitive environment for exporters, particularly to Britain, in its 1997 budget submission.
The erosion of competitiveness "must be of great concern to the Government, according to a statement issued by the IEA this morning. Noting that as the employment intensive Irish owned exporting sector is extremely dependent on maintaining and developing markets in Britain, it is calling for a re assessment of the market.
Irish exporters have already been feeling the impact of the strong pound as it has hovered around the 104p mark. And the market this week will be waiting to see if the Central Bank moves to influence interest rates which rose strongly in the inter bank market last week. There is a fear that if retail rates rise, the pound could become more attractive and keep it strong against sterling. However, if retail rates rise, most analysts argue that it will only be around 0.25 per cent.
The Small Firms association has constantly called on the Government to stake steps to protect export jobs. "For companies who have developed export markets on the basis of the pound trading at parity with sterling, the current rate means profit levels have been eroded," says the SFA.
It wants the Government to seriously re examine the possibility of having a market development fund, similar to the fund which operated in 1992.
Last month, the SFA also raised the issue of competitiveness. It too wants a more level playing field.
In common with other groups, the IEA sees turbulence in international currency markets as the preparatory phase for economic and monetary union and a possible fall in the value of sterling which would bring the pound up to between 105p and 110p. That "would represent a crisis for most exporters
IEA has pointed to the recent ESRI report on the economic implications of EMU which predicted job losses of 28,000 if sterling were to fall by 20 per cent against the Euro.
The exporters have specified their needs. These include:
. more funds for trade promotion in Britain;
. a sterling stabilisation fund for designated exporters;
. a widening of the income tax bands to remove average industrial earnings from the higher tax bracket; and
. a reduction of corporation taxes on exports and services.
The association also wants a reduction in international telecommunications charges, noting that Telecom Eireann recorded a profit of £180 million in its last trading period.
While reduced charges would help exporters' competitiveness, IEA also contends that it would halve the erosion of Telecom's own markets which has already started. Larger corporations can get lower charges through negotiation but "the smaller companies are in no position to do so".
