Adjournment Debate. - Border Counties Tax Status.

Thank you for the opportunity to discuss this matter on the Adjournment. The negotiation of a special tax status for American companies in Northern Ireland has for some time been under consideration in political circles. It is a worthwhile idea; when one considers the economic devastation in the North over the past 25 years there is a clear need for innovative measures to lift its economy. However, in the context of innovative thinking to find solutions to unemployment in the North, sight should not be lost of the serious impact the troubles have had on the counties immediately south of the Border and none has been more affected than County Louth. At present, between 10,500 and 11,000 people are unemployed in this county, spread among the three main areas of population, namely Dundalk, Drogheda and Ardee. The encouragement of industrial investment in the area has been sluggish. Despite a concerted effort by the IDA the unemployment figures remain stubbornly high. Given the current efforts to secure special tax status for American companies in Northern Ireland a similar effort should be made with regard to such companies which are locating or will locate in the six southern Border counties. This would be of immense and immediate benefit. At a time when it is difficult to get mobile investment into this area, it would be a major shot in the arm for those in the business of bringing the industrial itinerary through Dundalk, Drogheda and Ardee.

It is now some months since the industrial development conference in Washington and there is some disappointment that no tangible progress has been made in terms of direct industrial investment. It is no good holding conferences and seminars if they become mere PR exercises. Tangible progress must be made. Unless definite and innovative measures are taken, to actively encourage that investment, nothing will happen. I am sure the Minister and the Government are not unaware of what has happened on both sides of the Atlantic in relation to this issue so I urge them to ensure that the six counties immediately south of the Border are included for consideration in any possible arrangement.

I thank Deputy Kirk for raising this matter. I assume he refers to a recently proposed Bill for a free trade agreement between the US and Northern Ireland and the Border counties which is being introduced in the United States Congress. I am not aware of any proposals regarding special tax status for American companies in Northern Ireland and in any event issues relating to the taxation of companies operating in any part of this jurisdiction are matters in the first instance for my colleague the Minister for Finance.

I understand the main proposal in the Bill now before Congress, which apparently has the support of a number of members of the US Senate and House of Representatives, is to eliminate or to reduce substantially the duty applied to exports to the United States from both Northern Ireland and the Border counties. I understand the Bill as currently drafted refers specifically to the counties of Donegal, Sligo, Monaghan, Leitrim, Cavan and Louth.

The Bill is somewhat analogous to a Private Members' Bill here, in that its further progress will depend on the proposers' ability to garner widespread support in both Houses of Congress. A major obstacle which will have to be addressed by the Bill's sponsors relates to arguing successfully for additional preferential access arrangements for Irish exports over and above the current GATT agreements. Ultimately any special tariff arrangements would require approval by the European Union and the World Trade Organisation. Given my responsibility to promote Ireland's trade interests, my Department has monitored this proposal with interest and will continue to keep a close eye on developments through our Embassy in Washington.

The Deputy will be aware that the Border counties which feature in the proposed Free Trade Bill are also those which were the focus of the White House conference on trade and investment which took place in May last year. This Bill can be seen as a further indication of the widespread desire in the United States to contribute to the peace process by encouraging and assisting economic development in Northern Ireland and the Border counties.

As I have said in this House on many occasions, we warmly welcome the efforts of the many friends of Ireland in US political and business circles to be of assistance to us in our efforts to achieve and copperfasten a peaceful political settlement in Northern Ireland. The engagement of the United States can undoubtedly play a major role in converting the potential of the peace process into lasting economic and social progress in Northern Ireland and the Border counties.

The United States is a key economic partner. It is our fourth largest export market with Irish exports in 1995 totalling over £2.25 billion. It is also the largest source of inward investment to Ireland with more than 400 companies operating here. In addition, almost 600,000 US visitors came to Ireland in 1995. The strengthening and deepening of our economic links is, therefore, something which I would very much support.

In this regard, the White House conference was a major and very welcome demonstration of US engagement with Ireland at the highest level. The entire weight and attention of the Administration of the most powerful country in the world was put at the disposal of Ireland in an unprecedented personal initiative by President Clinton. The conference provided an opportunity for one-to-one networking by Irish and US business people and for exploring avenues for potential co-operation such as joint ventures and other commercial link-ups.

As this is the first opportunity I have had to speak in the House on US trade issues since the untimely death of the former US Commerce Secretary, Ron Brown. I should like to take this opportunity to pay tribute to him and to again acknowledge the vitally important role played by him and his team, including his Assistant Commerce Secretary, the late Chuck Meissner. Ron Brown and his officials were key players not only in the organisation of the conference, but in the follow-up contacts and business development missions which have taken place since then. I had the privilege of meeting both men on a number of occasions, including at the White House conference where Ron Brown and I signed a joint communiqué on tourism co-operation. I found both him and Chuck Meissner to be whole-hearted in their determination to assist to the greatest extent possible in underpinning the peace process through economic development and regeneration. Their energy and commitment to the process will be sorely missed.

One of Ron Brown's last acts was to set plans in motion for a follow-up to the White House conference on trade and investment. This follow-up conference will take place in Philadelphia in the autumn and is intended to develop further the areas of potential economic co-operation identified at last year's conference, with a particular focus on Northern Ireland and the Border counties.

In the meantime, work is progressing on particular sectoral initiatives. The US Department of Commerce is also planning further inward business development missions to introduce US business people to potential Irish partners, similar to that led by the late Chuck Meissner in autunm 1995. My Department and the agencies for which I have responsibility, including An Bord Tráchtála and Bord Fáilte, will continue to co-operate with the Department of Commerce in facilitating this work.

Finally, to return to the specific question of the free trade Bill currently before the US Houses of Congress, I would like to thank the Deputy for his interest in Ireland-US trade issues and to assure him that my Department will continue to follow closely the progress of this proposal.