Dáil Éireann - Volume 387 - 02 March, 1989
Agreement with the United States on the Development of Technology-Based Joint Projects: Motion.
Minister for Industry and Commerce (Mr. R. Burke) Raphael P. Burke
 Minister for Industry and Commerce (Mr. R. Burke): I move:
That Dáil Éireann approves the terms of the Agreement between the United States and Ireland relating to the development of technology-based joint projects between small and medium-sized companies which was laid before the Dáil on 8 December 1988.
The approval of Dáil Éireann is necessary as the Agreement will give rise to a modest element of charge upon public funds of an administrative nature within the meaning of Article 29.5.2 of the Constitution. As this Agreement is to come into effect on signature by both parties this House's approval is necessary now before such signature.
The purpose of the Agreement is to provide a framework to encourage further joint ventures and projects between US and Irish firms. Most of the 343 US firms now producing goods and services in Ireland operate as wholly-owned subsidiaries. Their US parents are usually large firms with a network of other such subsidiaries elsewhere in the world. Few involve joint ventures or projects with Irish partners. This Agreement provides a means in the future to increase the number involving Irish partners. It is particularly aimed at smaller and medium-sized US firms who have yet to develop significant overseas operations. As 1992 looms ever nearer, the IDA see particular potential for promoting joint venture projects geared to European markets involving small and mediumsized US firms. There are many such firms with no overseas investment which would benefit from a European presence. For some years now, the IDA's partnership programme has marketed the joint venture approach in the US and further afield. The Agreement before the House today should facilitate these IDA efforts in several respects in the US case.
The text of the Agreement was laid before the House on 8 December 1988.  Article I commits the parties to help in the formation of joint projects. Article II provides for a framework to find partners and funding for partnership projects. The key element of this framework is provided for in Article III. An executive officer is to be appointed to manage the programme. He or she will be pivotal to the success of the Agreement. To emphasise the complementarity with the IDA and, indeed, to avoid creating new overheads, it has been agreed that the officer will be existing IDA staff member who will be assigned to this role.
Article IV provides for a designated US Department of Commerce official based in Washington to liaise with the executive officer. This official will identify candidate US firms and seek out commercial funding sources for joint projects. This official will work closely with the executive officer in Dublin. This active assistance by the US authorities in locating candidate firms and also in helping US firms to locate funding within the US for their Irish projects are two significant new features of benefit to the existing IDA operation which I draw to the House's attention.
Article V provides for the executive officer and the US Commerce Department official to work together to elaborate the mechanisms required to implement the Agreement. It also provides that both parties cover their own costs: I will return to that point later. A joint advisory committee, provided for in Article VI, will advise on general policy matters. This committee will comprise leading private sector figures and Government officials from Ireland and the US. I will be giving careful attention to the composition of this committee in the near future. The closing articles, seven and eight, provide for entry into effect for five years on signature, for the Agreements amendment or extension, for termination by either party at 90 days notice and, finally, for a declaration that nothing in the Agreement prejudices the obligations of either party in other contexts.
The direct benefits of this Agreement  to Ireland lie in its potential to supplement the IDA's efforts. The new ingredients are active US administration support in finding partners for Irish firms and funding sources for them. The ultimate benefit to Ireland will be more jobs, wealth creation and exports. Equally for the US side, the ultimate benefit will come largely from the earlier access to European markets of its smaller and medium-sized firms to cope with conditions in the years after 1992.
The administrative costs of the Agreement will be modest. I have mentioned that the IDA will provide the executive officer and his facilities within its existing operations. The net extra cost will be confined to the travel costs of Irish members of the joint advisory board attending meetings in Washington. This is estimated at £6,000 per annum.
As I indicated in my introduction, Dáil approval is being sought now as the Agreement comes into effect on signature. The Minister for Foreign Affairs will make the necessary arrangements with the US side for the signing. I would hope that the Agreement could be made operational within weeks.
Before concluding, can I again emphasise to the House that this is simply a framework: it will be up to those on both sides and, especially the executive officer on the Irish side, to make it work to best effect. I am satisfied that it can make a difference: the concept is right, the mechanism can work, the partners are out there and both sides are committed. I commend the motion to the House.
Mr. R. Bruton Mr. R. Bruton
Mr. R. Bruton: It gives me great pleasure to talk on this motion. It is a welcome move. A longstanding problem with relationships between Ireland and the US is that there has been a very low element of franchising and joint venture links between Ireland and the US despite the heavy general investment. Indeed, some years ago it was shown that only 2 per cent of US investment was in that area although it was on a much larger scale with other countries with which the US were getting involved. There is no doubt that this is a welcome initiative.
 It is very important to point out that one gets out of efforts what one puts into them. The Government's record on being willing to support research and development in Irish industry has been deplorable. In recent years there have been savage cuts in the amount of money devoted to this sort of activity. When the National Board for Science and Technology reviewed Government funding for science and technology recently they showed a litany of dramatic cuts in research spending financed by Government in the period up to 1987. In the manufacturing industry about which we are now talking the cut was 20 per cent. It was greater in agriculture and still greater in building and construction where it reached 40 per cent. In the environment which is so important to us the cut was 15 per cent.
In the most important area in the light of what we are talking about today, the area of technology transfer, the NBST report showed that the Government had axed by 50 per cent their spending in this area. They had halved their willingness to support initiatives in this area. While it is all very well to talk about nurturing links between the US and Ireland and to hope that US companies will merge with Irish companies in their efforts, we must remember that we will only get out what we put in. With the Government slicing in half their support for technology transfer of this nature, my hopes for dramatic progress are somewhat dampened.
We will have to look at the whole research and development activity of our industrial sector compared with Europe, as we move into 1992. We have an opportunity to review this area and it presents a grim picture. Compared with European countries with which we will compete in the coming years Ireland spends only about 30 per cent of what the other European countries spend on developing new industry and investing in research and development. If we are to move away from being the hewers of wood and the drawers of water of Europe we will have to step up that commitment of research and development.
 I have to acknowledge that our problems do not only relate to the Government's unwillingness to give support in this area although it is sad to see such savage cuts. The weakness of our industrial structure has led to our problems. It is important to look at the structure of industry. In the last six or eight years the only source of employment growth has come from small companies employing fewer than 50 people. All the other branches of industry, medium sized and large industry have suffered massive cuts in employment. We have depended heavily on the small firm to produce jobs but evidence shows that only 2 per cent of small firms spend anything on research and development. That paints a grim picture for the future if the only source of growth in employment is coming from small companies and those companies are not able or willing to put money into research and development. The outlook as to whether we will be able to withstand competition in Europe is not good.
While this initiative is welcome and while it is focused on small and medium sized industries it is far from sufficient to redress the problem where only 2 per cent of small companies are engaging in research and development of any sort. That is the nub of the problem. It will need a much broader initiative than what has come from the Minister today. The Minister will need to put a great deal of work into this area.
I have a direct interest, on behalf of Fine Gael, in the energy budget. In that area, commitment to research and development has been pathetic. We spend less than one-twentieth of the common European level of expenditure on research and development in energy. It is well known that the excessive cost of energy and the poor efficiency in use of energy in this country is one of the major handicaps with which we will have to deal as we move into a more competitive environment in the European Community. Because the Government are putting only one-twentieth of what other European countries put into this effort, we will not be able to get on top of that problem. The other area which deserves  some mention in this context is the multinational companies based in Ireland. We continue to suffer from the fact that the bulk of the multinational companies in Ireland do not locate their research and development activities here as well.
Recent surveys of, for example, the electronics sector which many of us look to as the great white hope and the great modern effective sector that can bring jobs to Ireland, show that Irish plants do not have the strong product development capability to produce the new generation products that will be needed from the electronics sector if those jobs are to be sustained and to grow. The reality is that a survey of the Irish electronics sector showed that we spend only one tenth of the amount of money on research and development, comparatively speaking, as other European countries. That shows up the problem we have had with multinational movement into Ireland in recent years.
Basically, the companies have not moved their product development and their research activities into Ireland, and Ireland has become dependent on a generation of products in these sectors that may well be superseded by technology. Until we can redress the balance we will always be vulnerable. The industries which so many of us have looked to as being on the leading cutting edge of technology may prove for Ireland to be a great disappointment if we cannot get on top of that problem.
The initiative before us today, while welcome in itself, is only scratching the surface of the task that has to be taken on. It is important that this Government address in a much more coherent way than they have been willing to do to date, the issue of Government support for research and development initiatives from small and medium size industry.
I know this Government have faced a financial problem which necessitated cut backs in spending. However, in the energy research budget that spending was cut by 90 per cent. That does not show any real regard by this Government for the long-term value of research activity. If we are to move beyond being the  menial workers of Europe, we must beef up this area of activity. The Government's action in recent years in cutting research and development is effectively eating the seed potatoes that will be so important for Irish industry in the coming years. We are squandering what would provide the basis for growth and development in this economy.
I would ask the Minister of State, who has taken a great deal of interest and a great deal of care trying to bring in initiatives and to get a greater commitment from his Cabinet colleagues and specifically from the Minister for Finance to this effort. It is clear that the Cabinet does not have any commitment to this area of activity. It is sad that the Government should behave in this way. We all know there are financial difficulties but to eat the seed potatoes of tomorrow is not the way forward.
In conclusion, while the US link up is welcome, we should not forget our European colleagues. In the energy area specifically the European Community has consistently committed about 100 million units of account to demonstration projects throughout Europe in the energy sphere. Many of these have been extraordinarily successful, only 20 per cent failed despite the fact that these are high risk projects. Therein lies a pool of worth-while projects that are replicable in countries like Ireland. The Minister of State should look to these European demonstration projects as a source and pool of effectively displayed knowledge that could be applied in Ireland. It is difficult for a small country like Ireland to engage in green field research, but to piggy-back on already proven efforts in other countries can provide Ireland with a great return. I would like to see the Minister address that point.
I would ask the Minister to look at the semi-State bodies within his own area. The present position of State companies, to whom we look for so much, is deplorable in the area of research. Less than 0.1 per cent of their turnover is being devoted to research and development. If our energy and telecommunications sectors are to be among the most modern  and efficient in the world, we must rectify that situation. We will have to look not only to the US, welcome as it is, but to ourselves and to our commitment to research. As I said earlier we will get out of this initiative what we are willing to put into it and the record to date is that this Government are willing to put very little into the effort.
Mr. Cullen Mr. Cullen
Mr. Cullen: I fully support the Agreement before us today and I agree with the Minister for Industry and Commerce. The Progressive Democrats welcome this new and forward looking development. There is no doubt that Europe has a very serious problem when we look at the world of technology and at the state of development throughout the world. Europe is very far behind the United States and Japan. All recent discussions and speeches which I have heard on this subject have stated clearly that a quantum leap is needed by Europe if it is to match the United States and Japan. Obviously I am thinking in terms of the Single Market that is well underway at this time.
This Agreement provides this country with a strategic opportunity to play a role in helping to upgrade and get involved in research, and development with regard to technology. I accept that we will not be capable to start with green field projects. Research and development and technology development is a very expensive business and, particularly in the United States, it is a very expensive exercise and requires large sums of capital for investment.
When you look at a country like Ireland there are certain advantages which we can, with the United States, look to and offer. The most obvious advantage is the type of graduates who qualify in Ireland at present, the calibre of these graduates is very high and their qualifications are very high. Indeed, they are being snapped up by companies throughout the world. Obviously we want to keep that expertise and put it to work here.
I believe the type of packages and the  type of cost structures available here in terms of employment costs are far cheaper in many ways than in the US. On three levels we have advantages, this country can offer to the United States. There is the quality of the students available to go into technology. There is also the type of packages the IDA may be able to put together in terms of taxation, tax breaks, tax packages and grants packages which could be very attractive. I would like to hear the Minister comment on this, have the Government looked at any specific package which is geared directly to suit the intent of this Agreement. That would be very important. If it was done it would certainly look an attractive investment prospect for American companies either on a joint venture basis, which I would prefer to see, or, in other ways. Because of those factors, the cost of research and development could be far more attractive to some of the companies in the United States.
Obviously major American companies, be they large or small, will not shift their research and development entities into this country but there are opportunities for aspects of those companies to be developed in Ireland. One very obvious area where this could happen is in the food technology sector. Ireland is without doubt one of the world leaders in the developments which are taking place in the food sector. We have the raw materials and the produce and because of the perception of the environment of this country the quality of our food which is available on the world market has a good image. However, with the advent of 1992 we need — and American companies could look to us for this — to look at the technological research and development which is required in this area and would be of great benefit both to companies here and companies in the United States who need access to Europe. This is one logical and obvious area which could be developed and not enough has been done up to now. This Agreement should be looked at specifically in this regard.
I mentioned the development of Europe in the context of 1992 and, as I  have said on numerous occasions in this House, we are strategically located visà-vis Europe and the United States for continued joint co-operation in the industrial area on joint projects with companies from America and in Ireland. As American people and American industry are being made more aware of 1992, they realise the importance of gaining access to this market, access they may not have to the same extent in certain areas if they are not involved in commercial activities in Europe. Of course, Ireland is within Europe and this Agreement should be viewed by American companies and the Secretary of Commerce as a very positive step forward in this area.
I should like to ask the Minister, in relation to the Agreement, if he already has some specific projects in mind. The reason I ask this question is that the Agreement looks fine on paper but much of what the IDA are doing in attracting American companies here for various reasons is already under way and I wonder if the Department already have some specific projects in mind. I should like the Minister to give me an answer to that question. Secondly, because the Agreement is related specifically to the scientific and technology fields and I want to ask the Minister if he sees this as a focus for the development of the technology parks in this country.
As the Minister is aware, specific areas, particularly in the south east, have been designated as technology parks and I want to know if the Minister and his Department see this Agreement as a way of developing those technology parks and, if so, what type of framework he is going to put in place for that to happen. We all know of the technology parks which have been developed in the UK and the enormous amount of finance which is needed to develop a technology park to the level where it can really be called a technology park. It is not worth giving something a fancy title and having only a green field or a little workshop in the area. It takes serious companies with research and development intent and a technology base to develop these parks.  I should like the Minister to reply to that question also.
I should like the Minister to tell us what the executive officer's role will be vis-à-vis the IDA, the relationship which will exist there and more specifically, for example, the financing of the executive officer and whatever team he has under him so that they can do their job properly. Deputy Bruton was correct in saying that one only gets out of these projects what one puts into them and funding should be made available to put an expert team to work in this area to go to the States and work in conjunction with the people there on an ongoing basis, and not on a hit and miss basis every few months just to be seen to be doing something. Will the IDA develop a specific package or is it envisaged that some of the packages which the IDA have in existence at present will be the vehicle for attracting industry into this country?
An Ceann Comhairle Seán Treacy
An Ceann Comhairle: I hesitate to interrupt the Deputy but I merely want to remind him and the House that this item concludes at 11.30 a.m. and a number of speakers are clearly intent on offering.
Mr. Cullen Mr. Cullen
Mr. Cullen: I will conclude by asking a final question. I want to ask the Minister what the basis of the committee will be. I do not see any mention in the Agreement of what role the American Embassy in this country will play. I think they have a commercial attaché here and I believe there should be some role between that individual, the executive officer here and the person in the United States.
Finally, as the American Ambassador is present this morning I should like to congratulate her on her stay in this country and to wish her every success on her return to the United States. It is fair to say that she was one of the finest Ambassadors to this country and indeed she brought the life of the Embassy into the industrial, commercial and business life of this country, which has been very successful.
Mr. Spring Mr. Spring
Mr. Spring: Deputy Cullen, being the  perfect gentleman, has stolen some of my lines. Obviously the importance of this Agreement is verified by the presence of the Ambassador here this morning and I too should like to pay my respects to her. She has made a tremendous impression in this country and has been a great success. Obviously she is working right up to the end to ensure that this Agreement is fulfilled. I wish her the best of luck in the rest of her career, and I am not sure whether we have enough influence with Washington to have her kept in Dublin.
I welcome this Agreement and I want to make some brief remarks on it. It is a step in the right direction and I hope it is successful. It is very important that we should set out to maximise the number of joint ventures which can be put in place between Irish companies and companies in the United States. There will be tremendous opportunities on both sides of the Atlantic, particularly in relation to 1992 and the opening up of the European Market with the implementation of the Single European Act. They are opportunities we cannot afford to miss and we must be in a position to take full advantage of them. Therefore, I believe this Agreement is a step in the right direction.
One aspect of the industrial programmes we have had over the past 20 years, which I believe has been a major weakness, has been a lack of joint ventures and a lack of input from Irish companies and personnel into the decision-making process which takes place within the very large multinational companies which are located in this country. In that respect I would be in favour of the development of joint projects rather than what we have had in the past. That is not to question the bona fides of the decision makers, be they in New York or San Francisco, but it is most important that we should have the maximum possible Irish input in relation to decision-making for companies on an ongoing basis.
I have some reservations about the Agreement and perhaps the Minister can clarify whether the nuts and bolts of the Agreement are adequate for the size of  the task which lies ahead. I would not like to put my money on one official in the IDA supervising this task, given the size of the task and the level of opportunity which exists in the United States for companies who are now beginning to focus on Europe and look at Europe for new market opportunities. Many American companies, particularly small and medium ones, approach Europe with absolute apprehension, because many of these companies are owned by families who have not had any experience of selling abroad or of the European markets. Certainly, the opportunities in the United States are unlimited and I am not at all convinced that the appointment of one official will go anywhere near satisfying the opportunities that are out there.
On the other hand, perhaps it is to be expected that all beginnings are weak and this may be a start in the right direction. I should like to feel that the Minister of State would come back before this House as a matter of urgency should further funding and further manpower be necessary. To save pennies, we should not delay being in a position to maximise the opportunities. The IDA have had tremendous success in attracting foreign industry. This is a new and welcome phase. I would like to have a reporting process to this House. I do not see that mentioned in the Minister's speech or in the Agreement. It would be of interest to this House to have a report on an annual basis to ensure that the Agreement is working.
One aspect on which I have some queries is whether there is an opportunity for semi-State industries within the terms of the Agreement. The Minister might clarify that, because our semi-State industries at this time are looking for new opportunities and new directions, particularly the Electricity Supply Board and Bord na Móna. They should be in a position to benefit and make a contribution, if permitted, within the terms of the Agreement. To continue to be successful they will have to broaden their horizons and perhaps there will be opportunities here.
In general, I welcome the Agreement.  I hope it is a step in the right direction and that we and the companies in the United States will benefit from the Agreement.
Tomás Mac Giolla Tomás Mac Giolla
Tomás Mac Giolla: I also welcome the Agreement because of the benefit it can give to our small and medium sized companies in joint ventures. The Workers' Party are in favour of the widest possible exchange of information, particularly in relation to research and technological development between firms in this country and firms in as many other countries as possible.
Much impressive work has been done here both by Irish firms and by foreign firms based here. Much valuable research and development work has been done particularly in the technological area. As other speakers have said, this is only scratching the surface and the research and development area is one in which most investment should be made. This area has not received the attention which it should have been given by many Irish firms. Had it received more attention, we might have been able to compete better and the unemployment figures would not be as high as they are today. Anything that helps Irish firms to expand their research and development activities is very welcome.
There are a number of matters arising from the Agreement on which I want to ask clarification from the Minister. The Agreement refers to small and medium sized companies in both countries. Ireland is a country of only three and a half million population and the United States population is over 200 million, so what constitutes a small or medium sized company here would not compare in any way with what would be regarded as such in the United States. There is clearly a danger that the Irish firms could be dominated or swamped by very much larger US companies. It seems odd that there was no attempt made in the Agreement to define by turnover, number of employees, or anything of that nature, exactly what constitutes a small or medium sized firm.
There is another serious matter that  needs to be referred to. It is well known that the United States use high technology and access to technical knowledge as a political weapon and operate a strict policy of limiting access of such information to countries which they consider to be politically acceptable to the United States. This has nothing to do with military information but with purely technological information which relates to technology in general and especially to computers and electronic equipment. The aim of this policy is to prevent countries which the United States consider to be politically unacceptable from getting the most up to date information and technology and thereby restrict their industrial and economic development. The countries discriminated against in this way are the socialist countries of eastern Europe, as well as other countries such as Cuba and Vietnam. It is all clearly set out in the United States Export Administration Act.
The United States are, of course, quite entitled to decide what technical information they will or will not make available to other countries, but their policy and the United States Export Administration Act go much further than that. They also insist that US companies based in other countries and any countries that have access to US civilian technical information must themselves not be involved in any such export of goods or information to these socialist countries. There is a very powerful, but rarely spoken of organisation called the Co-ordinating Committee for Multilateral Export Controls, known as CoCom. There are 16 nations in CoCom headed by the US. It includes all members of NATO, except Iceland, and Japan is also a member. It was founded in 1951 and now operates out of an annexe to the US embassy in Paris. CoCom circulate detailed lists of goods, technical equipment and information which may not be exported or reexported by member nations to specified countries.
Officially, Ireland has nothing to do with CoCom, but unofficially anyone involved in the high-tech area will accept that Ireland operates under the rules set  down by CoCom. On November 4 1987 the then Minister for Industry and Commerce, Deputy Reynolds, in reply to a question told Deputy Pat McCartan that “because of its militarily neutral status, the State is not a member of CoCom. However, in The Irish Times of February 2 1988, Mr. Colm Donlon of the IDA is quoted as saying that Ireland “subscribed to the rules but is not a member”, adding that subsidiaries were “obliged by their headquarters to apply the rules in relation to CoCom”. According to The Irish Times article, the heads of a number of leading multinational companies with US parents knew all too well what CoCom were about. One such head is quoted as saying: “I'd be shot, drawn and quartered if they knew I was talking about CoCom. We're not allowed to talk about it.”
There has been no indication that, even with the improvements in East-West relations, the United States are prepared to drop the cold war attitudes to exports to other countries which are typified by CoCom.
The Workers' Party would be concerned if this Agreement were to lock Ireland and Irish firms that are not subsidiaries of any US firm but are going into a joint venture with US firms more firmly into the CoCom set-up, which would mean restrictions on countries to which they could export their goods. The United States are a very important market for Ireland and they are also a very important source of industrial investment for this country. Very many thousands of jobs are dependent on United States investment.
An Ceann Comhairle Seán Treacy
An Ceann Comhairle: I am sorry to interrupt the Deputy but I must again advert to the time factor in this debate and the desirability of affording the Minister of State an opportunity to reply.
Tomás Mac Giolla Tomás Mac Giolla
Tomás Mac Giolla: I was just saying that we must not allow ourselves to be cut off from other important developing markets by this Agreement in relation to our exports. I ask the Minister to give an  assurance that this will not happen and, in particular, that any company which enters into an arrangement with a US company to co-operate on scientific and technological matters under the terms of this Agreement will not be prevented under CoCom rules from exploring the possibilities for similar co-operation with firms in other countries.
Mr. Enright Mr. Enright
Mr. Enright: I welcome this programme which will benefit both nations. In regard to the number of American firms established here, it is important that there should be much greater involvement, particularly where grants are paid for their development and there should be a much greater equity base for Irish citizens in such companies. Because of our location on the edge of Europe, the Agreement will benefit American businessmen who are anxious to be involved in the European market.
The Agreement outlines the situation in regard to the IDA but there is no reference to SFADCo who look after a large share of the south and central part of the country and part of my constituency. About 30,000 people in my constituency are involved and I should like the Minister to tell me why SFADCo are not mentioned. There is a much greater possibility of expanding the work of An Bord Scoláireachtaí Comhmalairté. They were set up in 1957 and have been of benefit to young Irish people who have gone to the United States of America on scholarships, to do research and to continue their studies. The board comprises four Irish citizens — one of whom is the chairman — and three American citizens. Many people in rural constituencies are very anxious to engage in third level education at home and there is great scope for expanding the board. I ask the Minister to consider this.
Minister of State at the Department of Industry and Commerce (Dr. McCarthy) Minister of State at the Department of Industry and Commerce (Dr. McCarthy)
Minister of State at the Department of Industry and Commerce (Dr. McCarthy): I should like to express my thanks to the Deputies on the other side of the House for their support in relation to this Agreement. One of the important selling points we can make in this country to the United  States and other external investors is that there has been a consistency of approach towards inward investment. Any external investor would, of course, baulk at investing in a country where the investment could be affected by changes in policy arising from a change of Government.
In recent years we have witnessed the growth of new phenomenon in United States business circles, the presence of a number of young Irish graduates in managerial positions in United States companies. This presence offers the potential in future of persuading their boards to invest in Irish projects. Indeed, this has already happened on a number of occasions in the recent past and the IDA and SFADCo maintain a policy of keeping in touch with these individuals. This week we saw an example of this phenomenon at work when Alltech, a biotechnology feed company established by an Irish graduate in the United States, gave further indication of their intention to move their manufacturing activity to Ireland. Some of their other operations are already in place in Ireland. I am, therefore, optimistic that the new mobility of well qualified Irish graduates in business circles abroad will lead to increased investment in this country.
It is appropriate, correct and proper to pay particular tribute to the outgoing American Ambassador, Mrs. Margaret Heckler, who in her vivacious and energetic fashion supported this project from the outset and was instrumental in a major way in ensuring that the Agreement got to this stage.
Originally we had sought US public funding to be used jointly with the incentive support from the Irish development agencies in support of this Agreement. However, we must be aware that there are now strict controls on public expenditure in the United States and these controls operated during the early stage of negotiations on this Agreement. There is a strong sentiment in some quarters in the United States, including Congress, against agreements like this which are seen in some quarters as exporting United States jobs. It took a lot of work in Washington to uncouple this particular  Agreement in these circumstances and to get it to this point. Indeed, I understand that, while the United States have broadly comparable deals with Israel, India and France, no further similar negotiations are now envisaged.
I should like to point out to Members of the House the very significant level of private United States investment in Ireland. There are 343 United States owned companies in this country which offer employment to 38,000 people. The United States industrial investment in this country is £4.7 billion and there are at present 26,000 United States citizens resident in Ireland. These are significant figures and this country is fortunate that such good and fruitful relations exist between it and the United States.
There are also examples of a number of successful joint ventures between Irish and American based companies. For example, Mahon and McPhillips, the Kilkenny based engineering company, first looked at the possibility of technology transfer in 1986 when they sent executives to the United States on a fact finding mission organised by the IDA. Mahon and McPhillips had an R & D department of their own but saw benefits in coming to an agreement with other companies in the water treatment area to stay in the forefront of this technology. They came to an agreement with Sanitair, a United States firm, for exclusive worldwide rights to their aeration technology. Mahon and McPhillips have now won a contract to design, manufacture and install a sewage treatment plant for Stansted, London's third airport, as a result of this Agreement. The bulk of the equipment will be made in Kilkenny.
A number of joint ventures and partnership agreements have played a significant role in setting Kerry Co-op on the success route from commodity manufacturer to major international food processor. In the early seventies Kerry Co-op entered into a partnership arrangement with Erie Casein in the United States.
A number of Deputies raised queries. Deputy Mac Giolla was concerned that there was a fear of us being cut off from  developments in other growing markets. There need be no fear in that regard as we have agreements with France, Germany and the USSR for science and technology co-operation. Deputy Richard Bruton mentioned the lack of funding for research and development but significant extra funding has been made available in the past few years. There was a new budget for a Science and Technology development programme in 1987 of £3 million and this was increased in 1989 to £13 million. Programmes such as advanced manufacturing technology and technology audits programmes are designed to help meet the R & D needs of small and growing Irish firms. Deputy Richard Bruton also referred to diminished investment in research but Eolas carried out a very successful information campaign to advise firms on energy conservation.
There is an increasing number of US companies moving into Ireland to do their R & D — Digital, Analog, Verbatim, Western Digital and Wang. Of course the Government wish to ensure that more and more US companies who have facilities in Ireland will also locate their R & D facilities here. I believe this Agreement will facilitate the exchange of R & D and technology transfers between firms based in Ireland and the United States. There are good vibes at present that more and more US based companies will do more R & D here and this Agreement will help it further. I commend the Agreement to the House.
Question put and agreed to.
Dáil Éireann 387 Agreement with the United States on the Development of Technology-Based Joint Projects: Motion.