Brexit to spark Boomerang Boom as Australians seek greater trade links
We watch their soaps and drink their wine. Now trade chiefs Down Under want to turn 'soft power' into hard currency here, while expats are also bringing back skills and jobs
From TV soaps to New World wines, Irish consumers have taken Australian exports to their hearts and into their homes with gusto.
But our love affair with Australia looks set to move to the next level following Britain's decision to leave the EU.
As Brexit looms, Ireland is a fast becoming a key gateway to Europe for Australian and New Zealand companies which have traditionally accessed the EU through the British market.
"Many Australian firms have accessed the EU via Britain. With the uncertainty surrounding what post-Brexit Britain will look like, Australian firms will look to Ireland to fulfil that role," said Australia's foreign minister Julie Bishop during a recent visit to Ireland.
That message was repeated this week during a high-powered 'innovation trade mission' to Ireland by 20 firms.
Supported by the IDA and the Trans Tasman Business Circle, the trade mission marketed the region as a potential trading partner for Irish firms and as a gateway to the growing markets of Asia Pacific.
'Trans-Tasman' signifies collaboration between Australia and New Zealand. The name originates from the Tasman Sea which lies between the two countries.
Speaking about the mission, Johnny Weiss, chief executive of the Trans-Tasman Business Circle, said: "We come at an historic time, with a renewed focus on Ireland as a gateway to Europe post-Brexit.
" The group sees many emerging opportunities to work with Ireland's outstanding innovation ecosystem for growth and partnership, not only into Europe but also Asia."
Fergal Coleman, president of the Melbourne-headquartered Irish Australian Chamber of Commerce, said: "We share a vision, with our partners at Austrade and the Australian Embassy, of Ireland becoming Australian business's preferred gateway to Europe when the UK leaves the EU and that Irish companies should consider Australia as their base for the Asia Pacific region.
"In doing so, they will be taking advantage of the wide range of comprehensive Free Trade Agreements that Australia has in place with Asian economies."
Although Australia is not a major trading partner of Ireland there has been significant growth in recent years.
Ireland imported $103m worth of goods from Australia last year and exported a total of $2.7bn - a jump from just €724m five years ago.
To put these figures in perspective, Ireland's yearly exports to the US account for about €26bn, and the UK export market is worth about €15bn. So, there's a lot more room for trade growth.
In terms of 'soft power', our links are far greater, however. About 2.4 million people in Australia (around 10pc of the population) claim Irish ancestry. Add in the cultural, sporting and tourism links (about 55,000 Irish people travel there each year for holidays or on summer work visas) and 'soft power' can quickly translate into hard currency.
Our principal exports to Australia are veterinary products, pharmaceuticals and scientific hardware, and our main imports are veterinary medicine products and wine. Indeed, wine is probably Australia's most visible export success story.
Although Chilean wine is the favourite of Irish wine drinkers, accounting for 25.6pc of all wine sales, Australian wines are in second place at 17.7pc, ahead of France (12.9pc), Spain (12.3pc) and Italy (9.7pc). Ireland's services exports to Australia were valued at €740m last year, with services imports totalling €340m.
But official statistics probably underestimate Australia's trade with Ireland. Many goods imported into the Republic are exported via Britain and the subsequent journey to Ireland will be classified as within the EU.
The IDA has confirmed it has received significant interest from companies in Australia who are considering Ireland as an entry point into Europe following the UK's decision to leave the EU.
A total of 45 Australian companies have already invested in Ireland, creating a combined 3,000-plus jobs.
Three major investments were announced last year which saw Australian-based firms locate their European hubs here.
SiteMinder, a global travel tech firm, announced 100 jobs for Galway; animal medicine innovator Nexvet opened in Tullamore; and payroll and accounting company CXC Global set up its European headquarters in Dublin.
In the life sciences sector, ResMed Sensor Technologies - a subsidiary of multinational medical device company ResMed - is based in Clonskeagh in Dublin.
Australian investment bank Macquarie, which already has staff in Dublin, is seeking a full banking licence in Ireland as it seeks to retain access to EU passporting rights post-Brexit.
John Conlon, who heads up the IDA's Asia Pacific division, said Ireland has been successful in attracting established Australian Stock Exchange Top 100 firms as well as emerging tech companies.
Since 2009, the IDA has expanded its footprint in the Asia Pacific region - targeting the powerhouse economies of China, Japan and ASEAN markets.
The Asian market represents in excess of two billion consumers - roughly 500 times the population of Ireland and four times that of the EU. The region accounts for 40pc of global GDP and over 60pc of global consumers - with large and growing middle-class populations.
"IDA Ireland now has a team of approximately 30 people (10 in Ireland and 20 overseas) working on those 'Growth Markets'," said Conlon.
Another major factor contributing to improved Irish-Australian trade is the so-called Boomerang Effect whereby Irish expats living in Australia decide to return home and help to set up Irish operations for their Australian employers.
For example, former Irish investment banker Niall Conlon runs a successful tech firm Eclair Group in Sydney.
He is now in the process of setting up an Irish division, with plans to increase the workforce from 15 staff to 50 by next June.
He plans to hire about 20 software developers in Ireland in a bid to win local clients and expand into Europe.
"One of the trends we're noticing is that as the Irish diaspora return from Australia they are often presenting their Australian employers with the opportunity of opening a European operation here," said an IDA spokesman.
"It's a positive story for both Ireland and Australia, giving Irish natives an opportunity to return and Australian companies a chance to grow their international footprint."
Sunday Indo Business