Seanad Éireann debate -
Wednesday, 23 Mar 1983

Vol. 100 No. 3

Insurance (No. 2) Bill, 1982: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister for Trade, Commerce and Tourism (Mr. Cluskey)

Because this Bill, and the Export Promotion (Amendment) Bill, 1982 both deal with changes in export promotion legislation, I propose, if the House agrees, to cover both Bills in my speech.

The purpose of the Bills is:

(i) To enable Córas Tráchtála to promote, assist and develop, in addition to the exportation of goods, the provision of such service activities as may be designated by order made by the Minister for Trade, Commerce and Tourism; and

(ii) To enable also the provision of export credit insurance facilities in support of such service activities.

From a legal viewpoint, both Bills are necessary because existing statutes governing the operations of Córas Tráchtála and the provision of export credit insurance — with the exception of some few service activities recognised by amending Acts of 1969 and 1971 — relate only to external trade in goods or merchandise.

Mr. Lanigan

It would appear as if the public address system in the House is not working. I can just about hear the Minister, but I do not think anybody else can.

Mr. Cluskey

I did not realise that.

An Cathaoirleach

The matter is being investigated.

Mr. Cluskey

This legal limitation, for its part, constitutes a serious operational deficiency in our export promotion arrangements. It precludes, in effect, the achievement of optimum export performance by the many domestic service activities in which we are strong and for which excellent export potential is known to exist. It also clearly impedes the quickest possible realisation of our twin national priorities of employment creation and an improvement in our balance of payments situation. Against this background, I would stress that the Bills are both significant and urgent.

Ireland's economic advancement is still firmly rooted in export growth, on as wide a base as possible. It is clear, therefore, that we should, as a key objective, do all that we can to seek an increasing share of markets abroad, not only for merchandise, but also for as great a range of our service activities as we can.

As a practically achievable concept, there is widespread acceptance of the view that there is considerable scope for an increase in exports by our various service activities. Since 1945, but particularly in the last ten to 15 years, there has been an accelerating increase in the growth of, and world trade in, service industries or "invisibles". In 1979, international transactions in invisibles were equivalent to more than one-third of world merchandise trade.

At present, invisibles represent 33 per cent of the United States total trade receipts, while they account for over 30 per cent in Britain and France. In Ireland's case, they comprise only 13 per cent of our total trade receipts. This is an unsatisfactory performance by international standards and, especially at a time of increasing unemployment and strong competition for international investment in manufacturing, we must take all possible steps to encourage increased exporting activity by our services activities.

Nationally, there are significant benefits to be derived from the export development of the services sector. Because of their low capital and import content, the net contribution of service exports to the balance of payments is significantly greater than in the case of most manufactured products.

Exports by service activities have a high value-added and employment content and there is generally a substantial "down stream" spin-off benefit to be derived from services exports leading to subsequent exports of manufactured products.

There are a number of factors which give us, as a nation, unique advantages as an exporter of services. Our lack of a colonial past and our development over 60 years from a mainly agriculture based to an industrialised, mixed economy, has given us an unusally high level of acceptability, particularly among developing countries.

While I set no limits to our overall market potential, our main market regions are, however, likely to be the continent of Africa, the Middle-Eastern oil-based economies and Latin America. In these regions there is a wide interest in the spectrum of services which we have developed, ranging from our structures and systems for public administration, the activities of our State-sponsored sector, to several of our private sector service activities.

For the immediate future, careful market research has shown that our best prospects lie in such activities as infrastructural construction, health and education facilities, organisational and technical consultancy, and training. These areas are perceived by our potential client countries as the ones most relevant to their needs as developing economies.

As a general rule, and particularly in times of economic stringency, it is imperative that the best possible use is made of our scarce Exchequer resources. This is a consideration that we have brought to bear in framing the present Bills.

We must ensure that whatever Exchequer resources are made available to give administrative effect to the new functions, they are carefully husbanded so as to ensure that only those service activities which have most export potential are assisted. At the same time, we must be able to respond quickly and efficiently to the changing requirements of our client countries.

Accordingly, so that both optimisation of export returns and administrative flexibility can be facilitated, each Bill proposes that the Minister for Trade, Commerce and Tourism be empowered to designate, by order, the service activities to be assisted for export purposes.

My Department have given consideration, in consultation with interested parties, to the service activities that should be so designated initially. They will be: agricultural development and processing; construction related services; medical services; training services covering all activities; technical and general consulting services including commercial laboratory services and research and development services; international financial services; computer sortwear and data processing; public administration; and media recording and publishing services.

I am confident that the House will agree that these services will make a valuable contribution to our export growth and, in so doing, to our ongoing economic development. The above list of services, of course, is deliberately related to the service activities which qualify for assistance under the IDA's services programme, thus ensuring a practical operational relationship between the IDA's investment function and the various State supports to develop and improve our international trading capabilities in services.

The House will appreciate, however, that it is not sufficient merely to place enabling legislation of this kind on the Statute Book. The effectiveness of the Bills and their objective of improving the level and scope of our export performance will be realised only if they are backed up by a fully professional and coherent approach in marketing our capabilities. It is for this reason that Córas Tráchtála are being given overall, national, responsibility for the marketing of our export potential in the services area.

The accumulation of their experience in the marketing of goods is such that they are eminently suitable for the task of assisting exporters of services. This is not to gainsay the experience and expertise of organisations such as HEDCO, DEVCO and the associations of architects, engineers and accountants. These organisations have provided, and will continue to provide, very valuable services to their members.

Córas Tráchtála will work closely with all existing service organisations to ensure that:

(i) the best advice is made available;

(ii) the best form of practical assistance is given;

(iii) all possible opportunities are identified — which will be facilitated by CTT's substantial international network — and

(iv) tendering and proposal documents are properly prepared and presented.

With the benefit of their wide international contacts and experience, the organisation will also monitor the overall environment, domestic and international, for factors likely to inhibit Irish exports of services and to promote the removal of constraints where these are identified.

Increasingly, the provision of export credit insurance plays an important role in the achievement by Irish firms of export orders. To ensure that this insurance is made available to the exporters of those services which will be designated by order in the Export Promotion (Amendment) Bill, identical service activities will also be designated initially by order under the Insurance (No. 2) Bill.

Administratively, the new insurance arrangements will form part of the schemes operated by the Insurance Corporation of Ireland acting as my agents. Suitable policies to cover the kind of activities involved are currently being drawn up by my Department in consultation with the Insurance Corporation.

Export credit insurance is now an essential business safeguard, particularly in such growing markets as the Middle East and Africa.

As is the case with the present insurance schemes, the aim of the new insurance arrangements under the Insurance (No. 2) Bill is to assist and encourage Irish exporters to develop existing and new markets and to provide protection for them against non-payment by foreign buyers due to a wide range of potential causes of loss.

The improved export insurance facilities will, I feel, represent a valuable security for exporters of services, particularly under the conditions of intense competition and financial instability which exists in many areas of the world.

I am confident that these Bills will make a valuable contribution to the Irish economy through an expansion of our export base.

On the enactment of this legislation, all necessary steps will be taken, as a matter of urgency, to ensure that the provisions in these Bills are translated into immediate action. It is self-evident that the sooner we harness our full export potential by service activities and maximise their export earnings under a coherent and co-ordinated marketing strategy the quicker will be the benefits felt in the economy and the greater will be the extent of those benefits.

I ask the House to support these Bills.

An Cathaoirleach

Before I call on the next speaker, I would like to say that the technicians have arrived to investigate the complaints about the loudspeaking system. They will be only a few minutes so we will have an informal suspension until they repair it — perhaps for five or ten minutes.

Professor Dooge

Better make it 15 minutes.

An Cathaoirleach

We will suspend business for 15 minutes.

Sitting suspended at 2.55 p.m. and resumed at 3.10 p.m.

Mr. Lanigan

It would be remiss of me not to welcome a new member of the staff to the House in the person of Mr. Martin McMahon. I sincerely hope that he will enjoy many happy days and nights with us here.

I am particularly pleased that these Bills are before us. For too many years the promotion of services has been ignored totally not alone abroad but at home. For too many years we have seen everybody in the industrial sector getting grants and help, while the service industries which support these manufacturing industries have never got a fair crack of the whip. No manufacturing industry, or indeed our agricultural industry, could survive without the support of the service industries. In many cases the service industries which have been set up here have been set up with a huge capital input purely from the resources of the people who set them up, without any help from the State. Also, the jobs created have been provided by our entrepreneurs without any help from the State. For those reasons the two Bills which are before us are long overdue.

For many years I have felt that the Government promotion boards should be involved in a co-ordinated effort to help service industries to bring back here very valuable foreign currency. For too long we have seen individual firms go abroad, without any co-ordination attempt, to gain contracts in Third World countries, indeed, in the major manufacturing countries of the world. But lack of co-ordination has meant that we have not got the best from the efforts of individuals, or companies so doing. Take for example the building industry and what has happened in Arab countries over the past number of years. Some of the biggest contracts ever have been awarded in the Gulf and in the North African areas. We have got somewhat of a kick-back from some of those contracts. We may have got very small steel erection jobs there. We may have got water treatment plants. I might instance a firm in Kilkenny, Mahon & McPhillips, who have gone out and got contracts of that nature.

But when one examines the types of companies or consortia that have gained such overall contracts one sees that we have fallen down very badly. Possibly we should have a national consortium set up for the building and construction industry. Such consortium representatives go out, examine the types of contracts awarded or being tendered for, then return, as a consortium, approach individual companies here with a view to ascertaining whether they could get a group together to undertake the total task in a given area rather than going out and undertaking portions of particular contracts.

I know we cannot compete with certain third countries in this respect. One can instance the situation in, say, Saudi Arabia at present where there is a major city being built and where 90 per cent of the task force are Koreans. Most of the work being done on that site is by Army conscripts. They are given a chance to go and work abroad as construction workers or remain in their country and serve in the Army. I do not think we could get to that stage. Nor do I feel, as other people have said, that because these people are conscripts they are not doing good work in these areas. Every contract undertaken by a Korean company has to measure up to the standards set by the engineers in charge of the projects. It is not necessary that they be European. They may be American or any other nationality. There have been successes from our efforts on the invisible earnings front. One has only to look to Lesotho and such places where we have Aer Lingus people training the natives. We also have people from the agricultural sector doing magnificent work in the Third World. ESB personnel have done fantastic work abroad.

The week before last saw a major incursion by an Irish bank into the American banking market. While I might fear they would take somewhat too much of what has been earned here to America nevertheless such venture can be an example of what can be done by Irish people. Allied Irish Banks, the Bank of Ireland, the Northern Bank, those banks that operate in Ireland are as good as any other banking system in the world. The major constraint on industry here at present is occasioned by the fact that too many of these banks are too conservative in what they want by way of return for their money. To a degree it is this conservatism that is at present turning down Irish business. We have gone from the concept of banking as a service to banking as a means of making money for the bankers, a situation that cannot be allowed to continue.

One of the major problems encountered by people in the Third World, in particular in North Africa and the Gulf countries is that they have a reducing source of energy which they sell to the outside world at present at prices we consider too high. But when one considers for how few years these countries can survive on their existing energy levels one must not reprimand them for trying to get as much as possible for their shortlived assets.

As a small country, we can help them by exporting some of our expertise. We have a very good educational system which produces people of expertise in many fields, in the technological, agricultural and public administration areas. For example, how would we feel were we in the same position as the Algerians, knowing that their sole source of income, oil, would expire in 15 years' time? This is where we can help. We cannot provide the major industrial complexes needed in these countries to give them a manufacturing base once their energy source has expired. However, we can send out people with the knowledge and expertise to educate their people on how they can survive once their source of energy has terminated.

The major industrial countries of the world are a source of concern to these African countries. We are part of an international consortium being a member of the EEC. They consider us part of the EEC and not a small nation. They consider us to be at the same level as Germany which is much bigger and has more resources than we have. Companies from the major industrial countries tend to set up industrial complexes in these Third World countries. Once they have set them up and have been paid they disappear. Because they have not left behind the education or industrial expertise, many of those companies fail. What is said then is that these people from the under-developed countries are incapable of running or maintaining major industries whereas if they were educated into so doing they would be just as capable as ourselves or other industrialised nations.

Many facets of the service industry have been covered in the Minister's excellent introduction to the Bill. However, I wonder how far the provisions of the Bill will be put to purposeful use in the near future. If we can but use our expertise, our educational system to send people abroad there has to be a boost to our economy not alone from such people's earnings but from such contacts as they establish which in the future might provide us with the necessary export base we need if we are to survive as an agricultural exporting nation or as an industrial exporting nation.

The Department of Foreign Affairs will have a major part to play in the promotion of the provisions of this Bill. We must examine carefully our representation in the countries to which we send people to provide the type of training that is needed. Voluntary bodies, bodies supported here by charitable organisations — Trócaire, Gorta and so on — will have to be used to establish how best we can use our expertise in countries not as well off as ours. In certain African countries it is said that if one puts one's nail into the ground it would grow before one could pull it out again. There is no doubt that land in certain parts of Third World countries is capable of growing what is needed for their people to sustain themselves, but they lack the necessary expertise to till it.

We have sent out numerous people from all walks of life to these countries to work on self-help projects which have given hope to many people in Africa, India, the West Indies, South America and so on. The organisations which sent these people out should be consulted to establish the needs in such places and how best we can use our expertise to help them. The training facilities we have here should be utilised to bring in people. For example, AnCO, ACOT and others should be encouraged to bring in people from Third World countries and train them. When they return to their homelands they will use what they have learned and will build up a relationship with this country which could be useful to us in our efforts in implementing the provisions of this Bill in the future.

It is useful that the insurance provisions which have been available to manufacturing industries will now be extended to the service industries. Indeed, it is about time this facility was afforded people in the the service industries. If enough pressure is put on promoting the provisions of the Bill it will prove to be of inestimable value to this country.

Mr. Conway

It is with great personal pleasure that I join Senator Lanigan in welcoming the Minister to the Seanad this afternoon. I hope that he has a long — and I emphasise long — and fruitful period in office. Like Senator Lanigan I welcome these two Bills. I agree they go hand in hand. It is time we developed the service side of our industry. The job done by Córas Tráctála here has not been accepted by ordinary people as having been a tremendous one as far as the manufacturing industry is concerned. But to bring in the service industries constitutes a step in the right direction. The key to employment and to a reduction in our balance of payments is through successful export trade, and in the Minister's address he says Ireland's economic advancement is still firmly rooted in export growth on as wide a base as possible.

The move to include services in this is most welcome. Ireland is a rich country in its people. It is a traditional country as far as their agricultural growth is concerned and it is good to see that agricultural development and processing have been included in this. We have also a long tradition as far as medical research is concerned and for generations we have sent our most-talented medical people to help other nations.

On the consultancy side we have seen in recent years development in management techniques which would be most valuable to the American countries. Indeed some of our own consultancy companies and large firms have sent teams of consultants abroad to help other companies.

This invisible trade in the human resource affects greatly our balance of payments. When we learn from the Minister that invisible exports account for 33 per cent in the United States, 30 per cent in Britain and France, and for only 13 per cent here, it indicates to us how little attention we have paid to this valuable resource. We are now putting things right and are going after that type of business. We must explore. We have always been a country that sends the finest people abroad to help other nations. The main development of Britain and America has been carried by Irish men and women. We have one of the most sophisticated systems in the world as far as our education is concerned. We also have the youngest population in Europe. We put extreme pressure on our young people as far as the passing of exams is concerned in regional technical colleges, in universities, but when they come out they go on the dole queues. We have, as Senator Lanigan said, an abundance of talent and expertise available to us. We now must move to explore areas outside the country to take full advantage of this expertise. Córas Tráchtála as I have already said, are recognised all over the world with great respect and have won orders for Irish manufacturers from countries and companies that have hardly heard of Ireland.

The taking of health and educational facilities into the category will help in the many projects at present being undertaken by the Irish people. We have sent our doctors and our teachers to build up the educational and medical services of developing countries. We have in effect an abundance of contacts in those countries. Many of our teachers and doctors who have settled in the developing countries would be very interested in helping to facilitate any company wishing to send its representatives because they, like Córas Tráchtála, would have to have contacts in other countries before they would send out teams of experts. The role of Córas Tráchtála in the area of education and health is a major source of income for this country. The exports of services have a high value-added and massive employment potential and content. We have seen in recent years that large companies — Senator Lanigan covered the ESB and Aer Lingus and many other semi-State companies — have sent their engineers, technicians, scientists and accountants to overseas projects to help with highly technical assistance. This has a number of effects: they help the home companies in time of recession, they lessen the dole queues, create employment and have a major effect on the balance of payments.

It is appropriate, therefore, that the two Bills go together. I welcome the Export Promotion Bill as it covers trade, and the Insurance Bill gives proper insurance protection to our foreign trade. It is vital that our exports be covered properly for insurance purposes. Being a country cut off from the rest of Europe, we do not have the same type of population movement as the people in Luxembourg, say, would have to Brussels.

However, the thrust of this Bill is to seek out markets and services in Africa and Latin America and the oil producing countries where there is an unlimited potential for the services that we have available to us in abundance. Those are growing nations. They need people with expertise whom we have, many of them collecting unemployment assistance at the moment through no fault of their own. The companies for whom they worked with for years have closed. We have an abundance of people available, and there is a crying need for such people in other countries. As the economies of those countries develop, they need the expertise, they need the service industries that can provide the financial training etc. that they need. Not only will we be exporting people to give service abroad but we will be creating an opportunity for the export of Irish goods, because they go hand in hand, like the Insurance Bill goes hand in hand with the Export Promotion Bill. The opportunity to export our goods goes hand in hand with the export of our expertise.

Success of the export market will play a profound role in our employment position and our balance of payments, and there is no reason to believe, now that we have started this, that we will not increase our share from 13 per cent to 30 per cent in invisible exports. The effect that that would have on our balance of payments would be incalculable. Therefore I will welcome both Bills.

Mr. Cassidy

May I take this opportunity to congratulate the Minister on his appointment and to congratulate you, a Leas-Chathaoirligh, on your appointment. I welcome this Bill from the recording and publishing services viewpoint. I have been involved for over the last 18 years in the music recording and publishing business. It is an industry that started from nothing and it is really still in its infancy as regards world markets. Something that we in the music industry were looking for from CTT over the last years was recognition as an industry with tremendous potential.

I just want to welcome its inclusion in the Bill. I am sure I am speaking for all Irish artistes and all Irish publishers when I thank the Minister for giving us consideration and respecting us as a legitimate Irish industry that can make more than our fair share of contribution to the economy. Not many people know about the recording and publishing industry as it is quite a new industry, and with only two television channels here and only two national radio networks, we are at the interesting stage of starting off as regards live recordings and publishing. It is only in the past year that we have seen three of our own artists getting the success they rightly deserve.

Over the last four or five years we have been trying to break the link with the UK charts, the Australian charts, the Belgian and Dutch charts. I want to point out to the House how difficult it is for anyone in the line of broadcasting, recording or publishing, to achieve anything. When an artiste goes in to make a record he finds the studios here are as good as anything they have anywhere in Europe. We frequently have people coming from the UK and the other EEC countries to record their albums in our studios in Dublin. If they consider that good enough for their European and American releases, it is very easy to see that, from the technical and technique points of view, our recordings are up to levels in the UK, or Europe, or America.

The chance of having a hit record is a thousand to one anywhere in the world, and possibly only one or two artistes have any more than five hits in their lifetime. We have in this country artistes who have had one hit in the UK and who have had no follow-up because of lack of finance, not for lack of expertise or lack of the article being good. In the last year we saw Clannad selling more than half a million of their recording which was taken by RCA and placed as the theme for "Harry's Game". They have received acclaim everywhere in the world and have received awards in some countries. They had done Ireland and their own county, Donegal, proud. I was delighted with their success. Foster and Allen, a group with whom I am well acquainted, entered the UK charts three times in the last 12 months. They got no assistance from anyone, only taking their own luck and trying to get assistance from banks to break this enormous chain. The Furey Brothers had a hit with "Sweet Sixteen."

It is only when one has had a hit single that one starts to become an advantage to one's country and to one's self. The real money in that game is in making albums, and song publishing. Córas Tráchtála could play a major part here. The only assistance Córas Tráchtála give to the music industry is that they provide a stand at the European Publishers' Conference in Edam every January. We are thankful to them for that. What we might sell on that stand this year may not be a hit for ten years.

Dana was our first European winner for Ireland: she did Ireland and Telefís Éireann proud, but not one penny of the proceeds of that record came back to this country in royalties. No one could be blamed at that time because the industry was in its infancy. Many people have been educated, so to speak, in the industry. We have to take precautions and look for the assistance needed to keep the money in Ireland and to employ Irish people and Irish industry. We have a pressing plant in Dublin which employs more than 100 people pressing records. That pressing plant can supply as good quality records for Germany, Holland and UK as anybody else, if we get the orders. I would like CTT and the Ministry ter, if we in the music industry put together a package on an experimental basis, to assist us, like our neighbours in the UK, with acts that have been successful on a promotion campaign. We in the industry will provide all the expertise through our financial experience and the hard experience gained at our own expense, to promote and give the help needed, especially in these recessionary times. With such assistance we could create more jobs in live entertainment and more jobs in factory processing of records or tapes. From a culture point of view it would be a good thing for the country. There is no greater ambassador of our culture than our song and our story. It is for these reasons that I ask the Minister to include the recording and publishing services in the Bill.

Mr. Quealy

I congratulate the Minister on his appointment, and I welcome the two Bills. They are necessary for the development of our exports. The purpose of the Insurance (No. 2) Bill is to make facilities available to the service exports, the same as to manufacturing exports. This is a desirable safeguard and the same type of insurance that is available in other European countries. I hope it will not prove more costly than in European competitor states.

The Bills are being taken together but there seems to be an overlap. The Export Promotion Bill is mainly concerned with CTT, with the Minister empowered to designate the Service activities to be assisted. I am pleased to see that the Minister is including a whole range of areas which he might designate. We have much to offer in the field of high technology. Over the years we spent a lot of money in grants to foreign companies to set up in business here but all we seem to have got was the employment content. But now we have a further asset because we have highly educated technical people ready to take advantage of any opportunity that may come their way.

There are vast opportunities in the Middle East and in Africa for development. Irish companies have operated successfully there over the past ten years.

I would like to stress that it is the small businessman that Córas Tráchtála should help most, as he cannot afford to explore world markets. It could prove very valuable if Córas Tráchtála could make their expert advice available to the small businessman in exploring those world markets. It is intended that Córas Tráchtála will monitor the overall environment, internal and international, factors which are likely to inhibit Irish exports of services, and to promote the removal of constraints when they are identified. This intention is excellent. If businesses are caught out, and this can happen when you are exporting, CTT will be there to help them. This is a high risk area and is probably one of the chief reasons for the introduction of the Bill.

Businessmen often risk everything trying to break into markets. Very often the capital investment can be out of proportion to the possible return in order to win a contract. The laws in some countries are not as reliable as perhaps the laws in Europe generally. From that point of view this Bill is very opportune: it will bring new confidence to exporters because it will show that the Government and the country in general are behind them.

I would like to ask the Minister not to forget our agricultural based industries. I will move a bit from services and point out that there is not enough being obtained from our agricultural produce. We should not still be exporting some of our cattle on the hoof or in carcass form. We should have more added value. The same applies to our milk products. These are traditional products but we depend on sales intervention. Why are we not a bit adventurous and follow some of our European neighbours into something such as high class cheese or yogurts? We have the expertise and research here. Small plants in Germany get the same profit from two million gallons of milk as we can get from one hundred million gallons. We are now importers of potatoes. I wonder what is wrong when we have to import chips.

Mrs. McGuinness

First of all, I should like to join other Senators in welcoming both the Minister to the House and our new Clerk Assistant. I have the greatest possible personal pleasure in welcoming both of them since I have known both of them for more years than either they or I might like to admit. It gives me great pleasure to welcome them to the House. I am sure that they will both fulfil their various duties with the greatest of success. I should like also to welcome this Bill, partly because I have personal experience of how some of these things can work. It will be very obvious to most Senators who read through the Minister's speech and the Bill what a useful purpose can be served by the services to be provided. It is very interesting to see how some of these service exports can work out in practice.

As it happens, a few years ago when my husband was working for the United Nations in Africa I had the opportunity to see how the exports of Irish services of this kind can work out. I saw the work of Irish consultant engineers, in particular, in such matters as providing a water system for the city of Lusaka in Zambia where the native population were able to supply only one skilled workman to oversee a water system which in this country would be serviced by a large number of qualified civil engineers. I am proud to say that it was an Irish company who installed and supervised that water system. They also were consultant engineers to a great many projects such as bridge building, road building and, of course, Aer Lingus were instrumental in training and overseeing all the work of the local airline. I have seen also this kind of thing happening in both Kenya and Sudan.

When you see how it is working out in actual practice it brings home to you what a large and useful field this is for Irish industry and for these, as they are called, invisible exports but which are nonetheless so important. I would like particularly to refer to what the Minister said in his speech, "the importance of our lack of a colonial past", because this was one of the things that was most noticeable in the developing countries in Africa. The work of Irish and Yugoslav advisers was very much more acceptable than the work of advisers from countries which African people rather naturally viewed with suspicion as being their past colonial masters, whether they happened to be British, French, German or anybody else.

This is a big opportunity and I would perhaps slightly disagree with Senator Lanigan when he says that people see us solely as part of the EEC and part of a large economic power bloc. So we may be, but people in developing countries are a bit more sophisticated than that and are quite well able to distinguish the Irish people, and the foreign policy of the Irish Government and their neutral stance between the two great power groups of the world. Therefore we are very frequently more acceptable. I am very glad that the Minister should have drawn attention to this in the Bill.

I would agree that it would be an important factor if those bodies that are promoting these services were to take the advice and to consider the experience of voluntary bodies, bodies like Gorta or even more purely Church bodies who have worked in these countries, as to where advice is needed and how best it can be provided. It is probably in the agricultural field that these bodies have most expertise because quite a number of them have helped in both arable land projects and in cattle raising projects, particularly in African countries. These bodies can highlight not only the opportunities but the terrible trap that one can fall into in trying to provide these services.

Mrs. Robinson

I, too, welcome these two Bills which are brief but significant measures as other Senators have recognised. I would like to welcome the Minister to the House in his new capacity. There are a number of aspects to the two measures that I would like to turn to. Some of them have already been mentioned by other Senators. I should like to begin with the area on which Senator McGuinness was focusing, the reference by the Minister to the fact that we are a former colony ourselves and that some of the target countries for the export services are developing countries, the Continent of Africa and Latin America. I agree very much with the thrust of Senator McGuinness' remarks, but I also want to add that there are potential difficulties involved here. These two measures are concerned about market promotion, and are concerned to develop the Irish economy, to provide jobs and value added to the benefit of this country in the export back of currency to us.

We must be aware that, in a number of our relationships with developing countries, we cannot afford to adopt a strict market approach. We must distinguish between what is, in fact, a part of our development aid, the provision of our expertise through services to the most disadvantaged or most needy developing countries. This is very important. There have been criticism by some of those who work in this field of some of the activities of DEVCO, for example, that there is too strong a desire to get an economic return for the service offered. This is understandable. The pressures are certainly there. This country is under very considerable economic pressure at the moment. We must bear in mind the very real gap between ourselves as part of the developed, richer world, and some of the developing countries whose needs are chronic, and who could not afford to pay for services at market rents and levels.

I would ask the Minister in his reply to explain, if he would, whether it is proposed to adopt differing approaches in this area to the needs of certain very disadvantaged countries, and whether he is in a position to ensure that we will not simply adopt a marketing approach in relation to the export of our services in all circumstances, particularly in the developing countries. Quite different criteria apply obviously to oil-based Middle-Eastern countries. There we are entitled to compete as effectively as we can for markets and services. Like other Senators, I am very pleased that there is this emphasis on the export potential of services from Ireland.

There is another dimension of the problem on which I would welcome the Minister's views. If the target countries we are looking to are the countries of the continent of Africa, oil-based Middle Eastern countries and the Latin American countries, there are constant dangers of a commercial involvement in a politically sensitive area. The difficulties can be greater if there is Irish Government support by way of export promotion to certain countries, particularly in Central America. It is the Minister's intention when designating by order the type of services to designate the geographical location of those services? He said he proposes to designate quite a wide range of services, but it is not clear from his speech whether the order will also refer to the geographical location or locations where those services could be offered.

There have been criticisms in the past of some of our State-sponsored bodies being heavily involved in providing economic services for regimes which are completely undemocratic and with which we should not have very close economic links. We are a former colony. We must be particularly sensitive to the political base of countries with which we deal. We must be concerned about the realities on the ground of countries with which we deal. I would welcome some clarification on that issue.

Another matter I should like to raise and on which I hope the Minister will comment, is the nature of this export promotion. It appears to me that what is intended, particularly by the combination of these two Bills, is effectively an aid by the State for our exports in the area of services. This could raise questions about the compatibility of this measure with the Articles relating to State aid, in particular, Articles 92 and 93 of the EEC Treaty. There is a temptation to say nothing about the possible problems which could be raised about compatibility between a measure which we all strongly support and agree with, and our obligations under the EEC Treaty. It is our responsibility as Members of the Oireachtas to raise these questions.

I should like the Minister to clarify the position. For example, has the permission of the EEC Commission been sought for the introduction of this measure and is it a consideration that the main target countries, and not the exclusive ones, to which the Bill is addressed are outside the Common Market territory? Is this part of the Minister's reasoning on the measure? Perhaps he would comment generally and clarify that matter. On the face of it, it appears to be a form of State aid which might not necessarily be compatible with our Treaty obligations, certainly in so far as it affects trade with other Community countries. It may be that the Minister does not intend to provide for any trade with Community countries. Another area of a potential problem is in taking up more of the public supply and service supply contracts under the Lomé Convention. I assume that this Bill will help Ireland to improve its potential for being able to take up a number of the existing service contracts under the Lomé Convention. I ask the Minister for clarification on whether there has been or is seen to be any problem in that regard.

The services to which the Minister referred in his speech are a fairly broad range of services, particularly in so far as they also include training across the board. That is very advisable. There is one omission which I have to say I find unforgiveable. There is no reference to legal services. I know the motto of the Bar, nollimus mutari, we do not wish to change and I know the legal profession have not been in the forefront of seeking new markets for their services. Nonetheless, there are strong arguments why Ireland is in a position — and indeed the legal profession and lawyers and legal advisers in Ireland are in a position — to offer legal services as another category of services for export, because we have the advantage of a common law system and a written Constitution. Even the service of drafting Constitutions has been offered by lawyers from other countries that I know of, and I am not quite sure if I know of any Irish lawyers who offered that particular service to developing countries. The service of setting up and providing expertise in legal mechanisms and mechanisms for fair procedures, and so on, are potential services which could be offered. I hope the Minister had no deliberate intention of discriminating against the possible provision of legal services but would be prepared to encourage this.

Finally, another aspect on which it would be helpful to have clarification is how much money we are talking about, say, each year over the next five years estimated in the two kinds of reports which are being envisaged in these two measures? How much money, for example, is it envisaged will be allocated to CTT for their role? The Minister very fairly in his speech referred to the fact that we are dealing with taxpayers' money and that is one of the reasons why he will maintain a sort of overall control by confining the provision of services to the services which he designates by order. It would also be helpful to us to know what range of financial involvement by the State is envisaged in each year over the next five years, if that is possible.

Minister for Trade, Commerce and Tourism (Mr. Cluskey)

First, I should like to thank Members of the House for wishing me well in my new office. I sincerly appreciate the congratulations which came from all sides of the House. I would like particularly to thank the House for the very constructive approach we have had to these two Bills on Second Stage.

I do not think I could over-emphasise the importance to our export hopes from these two Bills: they will extend considerably the scope of people engaged in the export market and maximise their efforts in that market. There is no doubt that we have been inhibited considerably in the past by a lack of provisions which included the service area under the umbrella of CTT. It would not be possible to make progress, apart from designating service areas for assistance by CTT, if we did not have the other essential provision extending insurance to people engaged in the export market, particularly in areas which are not always stable and where there is considerable risk for exporters. The House has fully recognised the value of these two Bills and has responded accordingly.

A number of issues were raised and I will try to deal with them as best I can at this stage. First, Senator Lanigan, in welcoming the Bill, made several observations not all of which I necessarily agree with, but some of which I certainly would agree with. On the ones about which I have some reservations he seemed to express his own reservations. He seemed to express some reservations about our capacity to supply goods to the Algerian market, if I took him up correctly. I do not think his pessimism in this regard is justified. In fact, people who have been engaged in the export market have performed remarkably well over a number of years. Even in the face of a world recession, in very difficult and trying times for people engaged in business generally and in the export market against fierce competition, they have continued to perform extraordinarily well. I do not think there is any need for us to be pessimistic about that aspect of our business life. The opportunities which will now be opened up by the passing of these two Bills will give further impetus to their endeavours in this area.

A number of questions were raised and I will try to deal with them. Senator Quealy raised a question about the agricultural sector not being provided for but it is provided for. The first thing listed in the Bill to be designated by ministerial order is agricultural development and processing. I share the views expressed by the Senator on the importance of this industry in the export field, and also in the employment field. It is a high employment area and one which we should encourage in every way possible. I also share the views he expressed about the regrettable fact that so many of our livestock go out on the hoof instead of being processed at home where the employment content is great. I hope we will see an improvement there. The areas identified by Córas Tráchtála and people in the export industry have been disignated. I will designate them immediately on the passing of the Bill.

Senator Robinson raised the question of the legal profession. If the Senator would look at the wording — and the wording is deliberate — while they are not specifically included, I think the Senator will agree they are not specifically excluded. The references to technical and general consultant services, including commercial laboratory services, does not exclude the legal profession. It was put in those general terms to allow considerable flexibility which we feel will be in the best interests of everyone concerned. She can rest assured on that aspect.

Senator Cassidy raised a question about the music industry. He talked about single hits. I am hopeful that we will have a double hit with these two Bills. He mentioned a package being presented for export in the music world. I can assure him that, if he makes any proposals on those lines I will see that they are treated by Córas Tráchtála as a matter of urgency and that they will get the attention which I readily accept they deserve. I hope that we will meet his requirements.

It is important that we give proper recognition to the expertise and the professionalism of Córas Tráchtála. It may have been Senator Conway who asked about Irish embassies and other agencies abroad. Every Irish person who has contact with people abroad and sees any potential for furthering our country's interest has an obligation to maximise that potential. It is important that we recognise that under the Bill the responsibility for the promotion of this extended activity in the export field is being placed firmly on the shoulders of Córas Tráchtála because on their record they have shown that they have the necessary expertise in marketing, research and assessing. They also have practically a world-wide network of people employed directly by them whose sole occupation is to identify these markets and ensure that the greatest potential is realised as far as Irish exporters are concerned, whether in the manufacturing or the servicing area.

Senator Robinson asked what kind of services we will be providing and whether we will take aspects other than commercial aspects into consideration. I fully share the views expressed by Senator Robinson. It would be misleading of me if I were to suggest that these Bills are an extension of development aid. Considerable care has been taken in the drafting of the Bills, and also in designating the areas which will be covered in the initial stages and in future stages, to ensure that we are not going into Third World countries to exploit them for our own advantage. We have taken great care to identify areas in which they need our expertise, in which they need the services which our companies and organisations can provide. We hope it will be to mutual advantage, not just to our advantage.

The export market is essential to our economic recovery, but is is also essential that we live up to the record which we have established over the decades of our genuine concern for and commitment to the proper development of Third World countries. The two are not incompatible. I can assure the House that while the Bills — and it would be dishonest to say otherwise — are not an extension of development aid and are concerned primarily with business organisations and conducting business in these countries, due regard has been had in the drafting of the Bills and also in the designation of the areas to be covered, to the legitimate and genuine requirements of these countries, and we are not going out there to exploit them.

A question was also raised about the incompatibility between State aid and our obligations under the EEC. We were aware of some potential difficulty there and, in fact, we have had informal discussions with the Commission. We are assured that there is no incompatibility. We did not want to make any formal submission until the Bills had been passed by both Houses. We do not foresee any difficulty in this regard, but it was quite proper and correct for a Member of the House to raise that possibility, because it could have been overlooked and could have led to difficulties.

I was asked about the money being made available. There is no financial commitment in these Bills in that the insurance credit is self-financing and has been since its establishment, but it was confined in the main to the manufacturing area. We are extending that provision but it will remain self-financing. The other Córas Tráchtála services operate under a grant-in-aid. The importance of the work they are engaged in and its contribution to the national economy should be fully recognised. Even this year when things have been extremely difficult, and some very unpopular and unpalatable decisions on cuts had to be taken by the Government in many areas, Córas Tráchtála got an increase of approximately 24 per cent in their grant-in-aid. The fact that they receive taxpayers' money is a clear indication of the importance attached by the Government to the work they are engaged in and also the confidence reposed in them.

I will give the House some figures as an indication of our hopes for the development of service exports. With the increased involvement of Córas Tráchtála in the service sector, the estimated revenue growth for service exports will be from £124 million in 1983 to £245 million in 1985. In the course of two years that will be an increase of 98 per cent. For the construction related area the 1983 estimate of annual earnings is approximately £83 million. With input from Córas Tráchtála projected annual earnings in this sector could increase to £120 million by 1985. The State-sponsored sector will increase, hopefully, from a 1983 level of £29 million to £55 million in 1985. Those dominant in the State-sponsored area are Aer Lingus and the ESB. We hope that that will be extended considerably. The other service industries, including those computer related, are expected to increase from £12 million in 1983 to £70 million in 1985. Overall it is estimated that Córas Tráchtála will be responsible for increasing the services category of exports by approximately 53 per cent. In financial terms that clearly indicates the importance of the Bill.

I hope I have not left anything unanswered. I thank Senators for the very constructive manner in which they have approached this Bill and I hope I can clear up any other matters on the remaining Stages.

Mrs. Robinson

This is not a Committee Stage point. I asked the Minister if he will designate the geographical areas as well as the service areas.

Mr. Cluskey

The best way I can answer that is to say that almost as soon as I took office I looked at the whole export industry to see how I could best assist Córas Tráchtála. A small but very top level joint group have been set up comprising top officials from my Department and top officials from Córas Tráchtála. They have held their first meetings. They will be meeting on a regular basis. One of the terms of reference I have given to them is that they should identify not only the product but also the geographical areas and where the potential lay. Instead of having global targets to be realised over a period of time we should have realistic area targets set in advance so that we can monitor whether or not we are attaining them and be able to take corrective measures if we are not attaining them and make a further input. That is as far as I can go at this point on the geographical areas. That group will have an important role to play in the future development of policy and strategy on exports and will also be very useful in identifying and monitoring the progress being made.

Question put and agreed to.

Agreed to take remaining Stages today.