ADDRESS BY MR NOEL TREACY, TD, MINISTER FOR SCIENCE, TECHNOLOGY & COMMERCE AT THE LUXEMBOURG CHAPTER OF THE IRISH BELGIAN BUSINESS ASSOCIATION DINNER, ON MONDAY 12TH, OCTOBER 1998 IN THE INTER CONTINENTAL HOTEL, LUXEMBOURG

I am honoured by your invitation here tonight. This is an important occasion to put on record the fact that Ireland -Luxembourg relations are excellent and that our economic and business relations with Luxembourg and Belgium have never been stronger or more promising. This is something to be proud of and I commend all of you who contribute to that success.

Our excellent relations with Belgium and with Luxembourg are underpinned by strong people to people relations. The work of our colleagues in the Irish Embassies, in Enterprise Ireland, IDA and other state agencies to promote stronger links and understanding of Ireland here, is greatly enhanced by the selfless efforts of organisations such as the IBBA to promote business and commercial relations. The role of business associations in making the business case for Ireland is very important and the IBBA helps immeasurably to ensure that the advantages of trading an investing in is well understood.

Against this background, I would like tonight to offer some reflections on economic developments in Ireland and tell you how the Government sees the future development of trade relation between Ireland, Luxembourg and Belgium.

The economic boom in Ireland is increasingly a matter for international commentary - we are dubbed the Celtic tiger and we are now ranked the eleventh most competitive industrial economy in the world. Our growth figures speak for themselves. In the last five years, the economy has gown by more than 40%, our growth rates have been higher than the OECD average and inflation has remained consistently low. Crucially, this economic growth is translating into new jobs and our unemployment rate has fallen to 8.8%.

The government is proud of these economic achievements and is determined to consolidate and build on them in the years ahead. The key to progress will be social partnership and our objective will be to ensure sustainable economic and social development. On the economic side, exports and investment will be at the heart of our strategy for continued economic growth as they have been the keys to our success in the recent past.

Ireland is one of the world's most successful trading nations and international trade is at the heart of the Irish economy today. Ireland's exceptional export growth is the primary stimulus of its overall economic growth and job creation. At 80%, Ireland's ratio of exports to GDP is one of the highest in the world. Almost half the jobs in Ireland, including most manufacturing jobs, are export dependent. Since 1994, Ireland has averaged annual rates of export growth of around 13%, the highest in the OECD. In the same period, Irish export growth outpaced world trade growth by a rate of three to one.

The most remarkable feature of this export growth is that it has happened within such a relatively short time. Just twenty-five years ago, Ireland's total annual export earnings amounted to less than £400 million - about one-hundredth of what we expect to export this year. In the early 1970s, Ireland launched a vigorous drive to internationalise the economy through inward investment, trade and tourism development. More than 1,000 overseas-owned companies have come to Ireland. These Irish operations have an export focus and their sales throughout the globe marked the beginning of Ireland's present export growth.

The multinational companies also fostered the development of native enterprise. The multinationals had a significant requirement for components, sub-supply and services, and within a short time, a base of newly established indigenous Irish companies began to meet the multinational supply needs. In working for world-class companies, they have become world-class suppliers and have acquired the proven ability to win customers in overseas markets. As a result, Ireland is evolving into the High Tech Centre of Europe, a world class supplier of products, components and services.

The message that Ireland is a dynamic place for trade and investment is quite clearly getting through, judging by the latest trade figures. Trade between Ireland and Belgium and Luxembourg has been buoyant in recent years and Irish exports here reached a record £1.75 billion in 1997, an increase of 21% on the previous year. Figures for the first three months of this year show a further growth in Irish exports to Belgium/Luxembourg of over 30% and we are confident that Irish export growth is set to continue this year.

Belgium and Luxembourg are especially important export markets for indigenous Irish SME companies for two reasons - firstly they are attractive and exciting markets in their own rights. Secondly, they are a strategically important natural gateway to larger EU markets. Success in these markets has many times proven a stepping stone for Irish companies to move into the French and German markets.

These markets are now Ireland's sixth most important export market and account for 5% of total Irish overseas sales. More than 650 Irish companies currently export to Belgium alone and the growth areas of our trade range across the industrial, consumer and services sectors.

A significant impetus to further export growth in Europe is the Economic and Monetary Union, which comes into operation in 1999 with Luxembourg, Ireland and Belgium as founding members. I believe that membership of the Euro zone will provide a further major boost for Irish-Belgian trade through price certainty, reduced marketing costs, price transparency and the other considerable marketing and partnership opportunities that will arise. Our mutual membership of the Euro zone will provide a further major boost for Irish and Belgian companies to expand their export sales

In conclusion, Mr President, I would say that this new, dynamic business environment which will come with the Euro is not without its challenges. In that changing context, we recognise the importance of commercial contacts in developing business in the EU and look forward to continued work in this area by the Irish Belgian Business Association and its counterpart, the Belgium Irish Business Association. I know that you have been and will continue to play an important and an unique role in further strengthening the business relationships between our countries in the future. As they say in Irish "Go mbeannaigh Dia an obair - God bless the work.