Consumers are ultimate beneficiaries of free trade

One of the hottest topics in international trade these days is the banana war currently being waged between the United States and the European Union. It provides a useful example of how trade developments that may have nothing to do with Ireland can still cause ripples here.

The US maintain that EU rules regarding the export of bananas unfairly favour exporters in former British and French colonies to the detriment of US distributors such as Chiquita in Latin America. Without waiting for the World Trade Organisation (WTO) to rule on the dispute, the US government has reacted by announcing plans to impose 100 per cent taxes on certain imports from the EU.

With items such as pork products and biscuits on the list of targeted imports, just under £3 million in annual Irish exports are among the $520 million EU exports under threat. These trading tensions come as Ireland is being hailed as a success story in terms of export growth.

As a small open economy, the State's foreign-owned and indigenous companies rely heavily on export trade. Over the past four years, Ireland has enjoyed significant growth in exports due, in large part, to the investment of multinationals such as computer groups IBM and Gateway.

According to statistics from Enterprise Ireland, in 1996 Ireland exported five times the comparative figure for the US, three times that for Japan, the United Kingdom and New Zealand and twice that for Germany.

"Trade makes the world go around," according to Mr Colum MacDonnell, chief executive of the Irish Exporters Association (IEA) and director of the Institute of International Trade. "Man's wellbeing has been improved considerably by the freeing up of trade."

He points to one of the earliest trading expeditions when the quest for a western trade route to India led to the discovery of America. In modern times, trade has been largely liberalised and Irish manufacturers continue to take advantage of this development.

Datak is an Irish firm that designs and maintains a range of computer-based remote control systems for the control of electricity, oil and water distribution networks and the monitoring of facilities such as lighthouses.

Whether employees are negotiating the lush forests of Brunei or monitoring lighthouses off the coast of Scotland, Datak's chief executive, Mr Cyril Kerr, attributes their success partly to the fact that they are a small company competing with major multinationals. "As such, we are much more agile and faster to respond and the technology we use gives us an edge on our competititors," he says.

The company, which has offices in Hong Kong (where it controls virtually the entire water distribution network) and Brunei as well as Ireland, experienced a set back last year when one of their biggest markets, Asia, experienced an economic downturn. This was yet another example of how problems in one market can have an immediate impact on others. "It was a very big market for us and we got let down there but we reacted by diversifying into South Africa and the Middle East," says Mr Kerr.

Electronic information display company Data Display was recently awarded the prestigious AIB/IEA Exporter of the Year Award. Its products can be seen everywhere from Heuston Station in Dublin, where a huge display informs travellers of train times, to precision score boards for sporting events in Holland.

Presenting the award, the managing director of AIB Capital Markets, Mr Michael Buckley, said Data Display had become a world class company in just ten years by investing heavily in R&D which kept it at the forefront of innovation in the sector.

A spokesman for the Co Clare-based company, which now exports to around 30 countries, said its growth strategy involved "staying ahead in terms of product development". "In addition, we set up a series of sales subsidiaries in our own markets to deal exclusively in our products which gives us a competitive advantage," he said.

The company employs over 150 people and manufactures at its main plant in Ennistymon and in Portsmouth in England. Tangible proof of success can be found in sales, which increased from £3.5 million in 1995 to £16 million in 1998. Just over 90 per cent of the company's production is geared towards the export market.

Recent developments have made it more conducive for Irish companies to forge a successful path into the export market. The emergence of new markets, such as some of the eastern European countries, and advances in technology and communications, have created new opportunities.

From a trading point of view, the advent of the euro is another positive development for the 11 member countries who, with a fledgling common currency, are expected to increase their dealings with each other. "Currency was the last barrier within Europe," says Mr MacDonnell.

At the recent export awards, the Tanaiste, Ms Harney, said the world was fast becoming a single market for transacting trade.

"Geographic boundaries and location are becoming increasingly irrelevant in this new global business environment. It is driven by trade liberalisation, the revolution in information and communication technologies, the harmonisation of standards and the increasing number of international companies who pursue global marketing and procurement strategies," she said.

However, it should be remembered that the ultimate beneficiary of the free trade and export chain is the consumer.

One expert commentating on the issue recalled "the contrasting experiences of forming part of a three hour queue for a meal in one of Moscow's prestigious hotels in the 1970's and within two weeks seeing a customer in the US reject a beer which had been delivered instantly without the customary head". In this context, free trade could be interpreted as a human right that determines whether the consumer is peasant or king.