While Irish exports to 20 Arab countries actually fell from 2015 to 2016, down by 11 per cent to €2.2 billion, hit by falling exports to two of the largest markets, Saudi Arabia (-28%) and the United Arab Emirates (-13%), the region continues to present significant opportunities for increased trade relations.
Indeed despite uncertainty in the Gulf region, on the back of a slump in oil prices, growth is still on the agenda for 2017, with the International Monetary Fund forecasting “modest” growth of about 3.5 per cent for the coming year.
And, with the UK's departure from the European Union over the next two years, it's likely that Irish exports to the region may even increase further, as Irish companies look to expand their geographical reach and reduce dependence on the UK market.
In line with this, in March, the Irish government published a post-Brexit trade strategy “Ireland Connected: Trading and Investing in a Dynamic World”, aimed at positioning Ireland for success in a post-Brexit world, and the Gulf region features strongly in this. According to the report, the region offers Irish companies “considerable potential” across a diverse range of sectors, including education, health, construction and agri-business.
Of course for the Irish food and agrifood sector, the region presents huge potential. Saudi Arabia imports about 80 per cent of its food products, while on average, countries in the Gulf Co-operation Council import about 90 per cent of their food produce, with Qatar for example importing almost all of its foodstuff.
As Minister for Agriculture, Food and the Marine, Michael Creed noted ahead of a trade mission to the region in February of this year: “The Gulf States offers enormous potential for the Irish food and drink industry and can contribute to achieving the ambitious targets in the Food Wise 2025 strategy”.
Food exports to the region already total some €250 million, and are expected to grow further, with plans to double exports to €500 million in the next five years. Within this, Saudi Arabia and the United Arab Emirates remain the main port of call, accounting for some €200 million of Irish foods exports, up by 50 per cent in the last three years.
Indeed Saudi Arabia is now the third largest non EU destination for Irish agri-food exports, behind only China and the US, and is also a more significant export market than some EU member states. While dairy to date has accounted for most of Irish agri-food exports to the region, plans are afoot to increase beef and other exports to the region.
The region has also gotten a boost with the appointment of a permanent agriculture attaché based in the Irish Embassy in Abu Dhabi, but with responsibility for the region.
Looking to capitalise on these opportunities, twenty Irish companies attended the GulFood exhibition held in Dubai in February 2017, while also this year, food buyers from Spinneys, a high-end supermarket chains in United Arab Emirates which already stocks Irish brands such as Glenisk Yoghurts, and Fresh Express, a major distributor, are to visit Ireland in order to source additional product.
Other sectors with opportunities for growth include aviation and travel technology, as the region is home to some of the world's fastest growing airlines, such as Emirates and Etihad.
Irish companies have already had success in this sector – Aer Rianta for example, has a ten-year contract to run the duty free at a new terminal in Abu Dhabi – and opportunities abound, with a number of airport expansions planned over the coming years, while the Middle East is predicted to become the largest wide body aircraft market in the next 20 years.
Trade of course, goes both ways. Imports from Arab countries to Ireland fell back somewhat in 2016, declining by 4 per cent to €184 million, also hit by a decline in trade with Saudi Arabia and the UAE, imports from countries like Morocco (+38%) and Tunisia (+79%) continue to grow strongly.