I would like to begin by thanking you for inviting me to address this important seminar on international trade risk in the era of the Euro. I am delighted to be here and I am sure that our deliberations this morning will help us to have a better understanding of what risks have changed and the risks that haven't changed as a result of the launch of the Euro as of January this year.

This is a timely conference and I want to congratulate the Irish Exporters Association and Allied Irish Bank for coming together to share the insights and their perspectives on these important issues. I am delighted to see that the financial services industry sees a role for itself in raising awareness about issues which have a key impact on Ireland economic performance. I am also very pleased to see that the Exporters Association are leading the way in challenging the export sector to look at the ongoing risks for international trade and to ensure the Irish exporters are aware of best practice in how they manage trade risk.

From my perspective as Minister for International Trade I am keenly aware of the need to minimise the risks for Irish exporters. This is especially imprortant for the Irish economy which is a particularly open one by international standards.

In 1998, the value of exports were equivalent to 79% of GDP while imports were equivalent to 55% of GDP. These statistics make the Irish economy one of the most trade dependent economies in the world. Almost half the jobs in Ireland-including most manufacturing jobs-are dependent on our exports. This performance highlights the contribution of exports to Ireland's economic growth. In 1998 Ireland exported the equivalent of £12,100 per head of population. This is over five times the comparative figures for the US; over three times that of Japan and twice that for Germany. At nearly 80%, Ireland's ratio of exports to that of GDP is one of the highest in the world.

Over the past two decades, we have been transformed from a producer of agricultural commodities into one of the most vibrant export-led economies in the world. This is reflected in the make-up of current Irish exports, which are predominantly high technology, with leading edge Irish companies in software. Indeed, Ireland is the world's second largest exporter of software products after the United States.

In mid-May, the Central Statistics Office (CSO) issued its 1998 trade statistics which show starkly that Ireland's merchandise trade performance in 1998 was world class. Exports reached £44.8bn - their highest level ever in the history of the state. The trade surplus broke all previous records and now stands at £13.7 billion. The surplus has never been higher and is growing at a faster level than ever before.

The value of Irish exports increased by 27% in 1998. These are unprecedented levels of growth and are well above 1997's performance. Our export growth, in value and in volume terms, is well above the global average. As I stated before, this is a world class trade performance by a world class economy which is going from strength to strength. In global terms, Ireland is now in the top 20 exporting nations according to the World Trade Organisation and the Government is committed to working with Irish exporters to build on this excellent performance so as the increase wealth and prosperity for all of our people.

In 1998 Ireland's major export markets were the UK at £8.8 bn, Germany at £6.6 bn, US at £6.1bn, France at £3.7bn and Belgium/Lux. at £2.9 bn. These five markets accounted for some 65.2% of total exports. Exports to the EU alone accounted for 67.6% of Irish merchandise exports in 1998. Exports to the US increased from £3.9 bn to £6.1bn an increase of 54%.

The contraction in Asian demand had a serious impact on exports to South Korea, Malaysia, Indonesia and Thailand - four of the markets most deeply affected by the Asian crises. Exports to Korea were down 42.8% at £255 million, Malaysia by 18.5% to £255m and Thailand and Indonesia by 18 and 61% to £65m and £10 million respectively. Overall, the combined imports from the Asian region to Ireland increased significantly in 1998 due largely and not suprisingly to strong currency devaluation's which lead to significant price competitiveness.

The 1998 export performance is evidence once again of Ireland's attractiveness as a manufacturing base and export location for multi-national companies. In 1998 there were over 1,000 overseas companies in Ireland supported by IDA Ireland. These companies employ 107,800 people directly and as many again indirectly. They account for over half of total Irish exports and spend IR£6.9 bn in the economy annually.

The largest single source of investment is from the USA with over 500 companies employing in excess of 74,500 Irish people. This is followed by the UK with 210 companies employing 16,100 and Germany with 180 companies employing 11,360. Ireland continues to be the most profitable location for US investment with return on investment being almost four times the EU and world averages over the past 10 years.

From a trade and investment point of view the single most important development recently has been the introduction of the Euro on 1 January 1999. It represents not only a significant step in Ireland's path toward greater integration into Europe, but economically it also gives a significant impetus to our continued export growth in Europe.

A principal objective of EMU is to boost economic performance by eliminating monetary barriers to trade, tourism and investment. Membership of the Euro zone provides a further major boost for Irish exporters through price certainty, reduced marketing costs, price transparency and the other considerable marketing and partnership opportunities that will arise.

The removal of exchange rate barriers and the reduction of uncertainty is likely to increase the emphasis on trade with EMU countries. Direct dealing with suppliers in EU countries is likely to grow, cutting out intermediary agents. The establishment of Euro accounts and Euro invoicing should facilitate this. EMU will present Irish companies with solid opportunities for winning new business providing a massive boost to trade within the Eurozone and opening up significant new market potential.

With the introduction of the Euro, exchange rate risk has been eliminated for Irish exporters exporting to the Euro Zone. However, Irish exporters continue to face international trade risk in many ways, including, the representation of their customer, transit risks and credit risks right up the scale to political and economic risk. In international trading Irish exporters need to assess the risks posed by individual country factors on individual trading decisions. Each country has a certain level of inherent risk which is associated with its political system and a stage of economic development. This risk has a major effect on overseas trade. In particular the role played by commercial banks needs to be complemented by in-company understanding of the risks involved.

The lesson learned from the Asian crisis of 1997/1998 demonstrates the degree to which inappropriate and often highly publicised economic decisions can often lead to financial crisis and increased risks for exporters. Risk indicators are available which provide comparative assessments of the risk of doing business in various markets. Such indicators seek to capture the risk that country-wide factors pose to the predictability of export payments.

These risk categories can in turn be broken down into political risk, commercial risk, economic risk, and external environmental risk. Each of these areas has to be examined in detail individually. Our trading partners vary between very low risk in the case of our EU trading partners and very high risk for countries like Russia and the Ukraine.

Ireland continues to be the fastest growing economy in Europe with an efficient economic policy that has generated staggering growth over the past four years. In its 1998 report, the International Institute of Management Development states that Ireland has jumped from 15th place to 11th among the world's most competitive industrialised nations. We are not, however, complacent as our competitiveness needs to be kept under constant review. Indeed, the recent National competitiveness Council Report has highlighted the latest issues we need to address to maintain our recent progress.

The indigenous exporting sector is predominantly made up of Irish small and medium enterprises, and indigenous exports are particularly valuable to Irish economy because they create twice as many jobs as other exports and SME companies purchase more of their materials and supplies locally.

Enterprise Ireland has the task of helping growth-oriented companies to seize the opportunities and meet the challenges of rapidly changing international markets. Enterprise Ireland has responsibility for the State's company development and export marketing services in order to give Irish companies a total support solution so that they, in turn, can provide world class service to their international customers. Enterprise Ireland's services are structured to deliver solutions to Irish companies across the full range of business functions including international risk management.

From my perspective as Minister for International Trade, it is clear to me that state agencies alone cannot provide all of the expertise required to promote enterprise and increase trade.

Organisations such as the Exporters Association have a key role to play as advocates for exporter interests and lobbyists on important policy issues affecting members interests. The financial services industry also has a key role in ensuring the competitiveness of our export sector by delivering high quality services which minimise risk for our export sector. As I said at the outset, I think this is an important seminar and I hope that it is of mutual benefit to both the exporters and the financial services companies here and encourages a greater understanding of the constraints and realities of the business of exporting and the business of banking in the era of the euro.

AIB and the Irish Exporters Association have an even greater part to play in the future to ensure continuing growth and success in our economic relations overseas and to ensure that the new millennium is an era of prosperity for all concerned. I look forward to reviewing the papers to be delivered this morning and am delighted to have been able to address the start of your deliberations on this vital topic on "International Trade Risk in Post euro Environment".