Enda Kenny (Mayo, Fine Gael)
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Question 1: To ask the Taoiseach the arrangements in place within his Department for maintaining contact with the Ireland-America Economic Advisory Board; and if he will make a statement on the matter. [15537/09]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I recently met with the Ireland-America Economic Advisory Board during my Saint Patrick's Day visit to the United States. The body provides a structure through which the thinking of the most senior and successful leaders of corporate Irish-America can be conveyed directly, and at the highest level, to the Government. My Department maintains contact with the body primarily through the Irish Embassy in Washington, as well as through visits and meetings.

Enda Kenny (Mayo, Fine Gael)
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On 5 May, President Obama proposed major changes to tax rules for American companies operating in Ireland, and the Government is aware of this. The White House identified Bermuda, Ireland and the Netherlands as low tax countries that account for nearly one third of all foreign profits reported by US corporations in 2003. The President believes that the current rules that encourage US companies to take advantage of low tax regimes overseas need to be overhauled. Has the Government carried out an assessment of the major American companies based in Ireland and how they might be affected by this statement from Washington, in view of the great number of people that these companies employ here? Has the Taoiseach asked any of his Ministers to make direct contact with the directors of those corporations here to see how they are assessing the impact of President Obama's comments? Has he directed the Irish ambassador in Washington or his staff to make contact with the White House about how Ireland might potentially lose serious revenue?

When the Taoiseach visited the US recently, he launched a review of Irish-US relations, which proposed the establishment of a new Irish-American leadership council. What progress has been made on that? Have any further meetings taken place? Is there a scheme in mind or a structure to deal with the review of the relations between Ireland and the US?

Brian Cowen (Laois-Offaly, Fianna Fail)
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I raised the tax deferral issue with President Obama when I met him on Saint Patrick's Day. At that time, the President confirmed that this was an issue not to be resolved overnight. He was mindful of the possible impact on Ireland, but he would act with caution and would be ready to discuss any potential unintended consequences. The Tánaiste also met with senior members of the US Administration to discuss the issue, including the Treasury Secretary, Mr. Geithner, in a visit to Washington on 20 and 21 April.

The proposals published on 4 May now go to the US Congress for consideration and these have potentially wide ranging effects on investments made by US companies worldwide. The US will be anxious not to hurt its global competitiveness. A senior IDA executive is working with our embassy in Washington to monitor and engage with the issue. Senior officials of the Department of Enterprise, Trade and Employment, the Department of Finance and the Department of Foreign Affairs, the IDA and the Revenue Commissioners have been meeting regularly on US tax policy issues. The Government will continue to ensure that the message of the positive experience of US companies based in Ireland and competing in Europe feeds into the deliberations of the Obama Administration and of the US Congress.

One of the cornerstones of America's success has been its leading role as a global trading nation. The US National Bureau for Economic Research has estimated that every dollar invested abroad by American multinational companies generates $3.50 in investment back in the US. American companies have invested in Ireland not out of sentiment but because they have seen excellent returns. These investments generate profits which protect and create jobs and investment in both Ireland and the US. They help to develop the centres of management excellence, the active networks and the deep pools of knowledge that are essential to economic recovery in both countries.

The Irish-American leadership council has not yet been set up, but the Minister for Foreign Affairs is working on it. We are also looking at bringing a major seminar to Ireland in September, which will be a timely occasion to proceed with that initiative. Our embassy, staff and ambassador will be maintaining a close liaison with the various committees of the House of Representatives who will be dealing with the Obama proposals, including the ways and means committee. We expect Congressman Richie Neal to be the vice chairman. He has been an outstanding friend to Ireland over many years and on many issues. We also have a number of contacts in Congress that will enable us to monitor closely congressional thinking on these matters. As I stated, this is a process that will continue for some months, if not years.

Enda Kenny (Mayo, Fine Gael)
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Arising from the Taoiseach's reply, would he consider it appropriate that the Minister of State liaise directly with the directors of American corporations in Ireland? Has the Taoiseach received any expressions of concern from American plants in Ireland which repatriate their profits and as such would be subject to the changed rules proposed from the White House? Would he deem it appropriate that an accurate report be compiled of these firms, which employ 100,000 people in Ireland, in order to obtain from them a firsthand account of what is likely to happen? Has the Taoiseach received any expressions of concern from such firms?

Brian Cowen (Laois-Offaly, Fianna Fail)
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Corporate America will be making its views known and setting out how it sees the proposal developing and evolving in terms of its meeting policy objectives. While we must respect the right of any government to set out a taxation policy we will need to use the good relationship we enjoy with the US Administration and Congress to ensure all aspects, or any unintended adverse impacts of the tax proposal as it evolves, are taken into account. The Minister for Foreign Affairs met a couple of weeks ago at the American Ireland Fund some industrialists from corporate America and spoke with some of their people who have an involvement in the tax issue. It is a matter of supplementing and augmenting an effort undertaken by corporate America through its interaction with Congress. As a country with a great deal of foreign direct investment from the United States we will be keeping a close eye on this issue with a view to persuading or influencing in a positive way the evolution of this proposal. We must take a balanced and sensible approach to this and not make demands left, right and centre that might result in a negative impact. We must be diplomatic, know what are the issues, focus on them as they affect us and work with others so that the overall outcome is acceptable, in particular from our point of view.

Eamon Gilmore (Dún Laoghaire, Labour)
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The Taoiseach has told us about the efforts being made at official level to liaise with US legislators and the US Administration in regard to the taxation issue in the US, which I welcome. To that end, what contacts are being made at Government level, in particular in the context of the legislation which will be considered on Capitol Hill? In that context, would the Taoiseach consider it useful to provide briefings to the Opposition parties here on the progress of those contacts and discussions to ensure a united political front on the issue from this end?

It appears there are a number of issues on which a common position emanating from the main political parties in this State would be helpful, including concern in regard to the changes in the US tax regime, a commitment to the retention of our current rate of corporate tax and a commitment to our future in the European Union. There are a number of issues which I believe are of concern to US businesses located here and considering locating here. I suggest that on these issues it is desirable a harmonious voice politically emanates from this State. I suggest the Taoiseach arrange to have the Opposition parties briefed on the issue.

Brian Cowen (Laois-Offaly, Fianna Fail)
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I have no problem in principle with keeping Opposition leaders informed of any developments that are noteworthy in terms of movement of the original proposition. I take Deputy Gilmore's point that it is important, for example, that the American Chamber of Commerce in Ireland and other business groups are able to convey to their counterparts in the United States that there is a strong united front on our part to do whatever we can, consistent with proper and appropriate diplomacy and working hand-in-hand with the US Administration and Congress in a positive and constructive way, to ensure we obtain a positive outcome, as we have done in the past when certain tax issues arose and we needed to end up at a point where the Administration's objectives were to a greater or lessor extent met which, at the same time, did not have an adverse impact on arrangements here. We can correspond with the Opposition parties and keep them updated on these issues.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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The Taoiseach referred to an upcoming conference in September. Will he share with the House the detail of what exactly is intended? Is it something akin or related to the Washington conference for trade and investment held in early 1997? If it is not such an initiative should we be considering one in terms of job retention and creation in this State and of generating interest in regard to the potential and opportunities Ireland offers in terms of inward investment? Perhaps the Taoiseach will share with the House what exactly is proposed and will provide us with a sense that is the course he is undertaking.

Brian Cowen (Laois-Offaly, Fianna Fail)
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The conference which it is intended to hold in September is a type of global economic forum bringing together people of influence and expertise from the diaspora, not alone from the US but worldwide to discuss developments in the economy over the next ten years. It will also consider where Ireland fits into that scenario and how it can develop a strategic view of its own policy framework in terms of whether there are other ideas, initiatives or approaches we need to consider. It will also seek to get the benefit of the ensuing expertise and insight from various people around the world so that Ireland and the Irish Government are up to speed with developments and in a position to identify where, over the next five to ten years, the drivers for growth for the Irish economy might be in terms of job creation and investment policy. I believe it is a positive exercise which is being well received and responded to.

The Minister for Foreign Affairs is taking up this initiative on behalf of Government and I look forward to it. It is, in a way, a wider version of the Ireland America Advisory Board in respect of those in the United States who have been helpful to us down through the years. Many of the heads of corporate America have been able to indicate to us the trends in technology and various important industries, including pharmaceuticals, IT and others and this has been helpful to us and the IDA in devising investment strategies and plans for some of those companies to locate here, many of which subsequently did so.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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The Taoiseach indicated that the lead Department is the Department of Foreign Affairs. Will he indicate if the Department of Enterprise, Trade and Employment is also directly involved? In addition to what has been already outlined, will he indicate if it is intended in September to ensure a proactive approach on the part of the IDA and the various enterprise boards throughout the country to target potential interest while people are here, thus ensuring the conference is not just a sharing of information and a building up of a knowledge base with which to work? People from a variety of international business interests coming here should also have as part of their itinerary in Ireland a direct engagement with those who are entrusted with promoting the potential of locating here and creating jobs.

Brian Cowen (Laois-Offaly, Fianna Fail)
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If one considers other diasporas, including those from Israel, India and others, it is clear that we have used our diaspora in the United States and in the UK for the purpose of helping to consolidate the peace process, which was a priority and a precondition for establishing some stability and being able to engage the diaspora. One of the great outcomes of the peace process is that we now have a united diaspora with us. We have a diaspora that is very knowledgeable about modern Ireland. We have a very informed public in those countries where our diaspora is located because of its involvement in peace building, etc.

We now need to broaden that approach. We need to look at talented high achievers who may not be Irish but be of Irish extraction or have a very strong sense of Ireland. While they may be many generations assimilated into their country of birth they still have a very strong sense of Irishness and want to contribute very positively to the success of Ireland. That is a broader definition that we need to corral into constructive purpose. This initiative provides an opportunity to identify many people in dispersed fields of activity who can come to Ireland, sit down on the basis of a very good agenda and work through these issues to help the Government to improve its thinking as to where strategically Ireland can go and where the opportunities might emerge.

The Minister for Foreign Affairs is organising that initiative for Government and is working across Departments and agencies, including the Department of Enterprise, Trade and Employment, Enterprise Ireland and IDA Ireland. All of that is being pulled together under his leadership.

Fergus O'Dowd (Louth, Fine Gael)
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Irish commentators and many significant Irish players in the US have expressed their deep concern that major multinational companies, which have invested in Ireland and collectively employ thousands of people here, may need to seriously consider withdrawing from operating in the country. Has that concern been raised with the Taoiseach or any of his Ministers? I do not doubt the integrity of either the officials or the conference the Minister is planning. However, is it not the case that other countries in this predicament may be using professional lobbyists in America to make their case to the Congress and Senate? Will the Government consider operating with these professional people in America to make the strongest possible case to the US Administration regarding the concerns of our Government and people in this respect?

Brian Cowen (Laois-Offaly, Fianna Fail)
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As things stand there are no indications that there is about to be a major outflow of American companies from the country. There are issues that will now need to be addressed and on which we will need to work. No kind of exodus is about to begin. Thankfully we have seen second and third stage investments here in higher end manufacturing and in research and development, which will deepen the roots of these multinational institutions in Ireland for the foreseeable future because of the quality of the people we have available to work. The research and development regime we have built up encourages Ireland to continue to be a location for such investment. Ireland still stays very competitive in these areas. We will continue to adapt our policies to meet those requirements.

Fergus O'Dowd (Louth, Fine Gael)
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With respect, the question is whether companies have approached any Ministers.

Brian Cowen (Laois-Offaly, Fianna Fail)
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No, they have not. There is no one.

Fergus O'Dowd (Louth, Fine Gael)
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I am sorry. I did not hear the Taoiseach.

Brian Cowen (Laois-Offaly, Fianna Fail)
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There are not people lining up to leave Ireland. I have said the opposite. There are people who have been in Ireland and who are investing in Ireland and continue to invest in Ireland. There has been an increase in the first quarter of this year compared with last year, despite the difficulty of the country's economy contracting by 8% this year. The level of foreign direct investment in the first quarter has increased compared with the first quarter in 2008. That is an indication of the wider competitiveness issues that apply in terms of the personnel available, the high-end manufacturing and the value that is added by these types of investments and the fact that Ireland remains an excellent location for such investment.

On the point about lobbyists, we use our diplomatic channels and our agencies to put the case on behalf of the State. They have been doing a fine job in that respect. There are occasions when some tax specialist needs to be employed to assist. It may be a tax specialist involved with IDA Ireland, which is the case here. He is located in the embassy in Washington at present to assist and augment and monitor developments from site and to acquaint himself in a personal way with those to whom he needs to be able to speak and with whom he needs to build up a rapport.

I do not buy into the argument that the best way to make a case is to get a professional lobbyist. The best way to make our case is by having people on the ground of competence and ability, who have contacts and are doing their work as good diplomats. We also augment that with other expertise as required. That is the sensible approach. Where certain specialities are required they can be bought in for a limited period of time.

Jimmy Deenihan (Kerry North, Fine Gael)
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I agree that one of the major causes of concern stems from what President Obama is saying about possible changes in tax laws. As the Taoiseach outlined, the issue of competitiveness is also very important. I was in Silicon Valley in March 2008. The Minister was there at that time. A senior IDA Ireland official, who was on the delegation with me, said that Irish competitiveness was a major factor in selling Ireland. He gave the example that the total cost of employing a person in Ireland at that time was $28 per hour. The total cost of employing somebody in Silicon Valley was $26 per hour. It was cheaper to employ somebody in Silicon Valley than in Ireland at that time. In Poland it cost $6 per hour. That was last March 12 months. He also emphasised that energy costs were the highest in the competing destinations.

I returned there this March - at my own expense. The chief executive of the Chamber of Commerce in San José advised us that we were the first Irish group she had met in months. The Chinese and Indians were queuing up outside her door. There were three delegations from different cities in China waiting to meet her that morning. Representatives of one Chinese city were even taking the unit next door to her in order to carry out their lobbying in Silicon Valley. Apart from the attitude of President Obama to the tax laws, there are other issues that we also need to address.

There is a very energetic network operating in Silicon Valley, the Irish Technology Leadership Group. The group presented an award to the then Minister for Enterprise, Trade and Employment, Deputy Martin in March 2008. It brought over a large number of chief executives to Dublin and the Minister addressed the meeting in Trinity College. It is bringing chief executives to Northern Ireland in October. The proposed forum to be held in September will be in competition with what it is trying to do in Northern Ireland. We need to be careful to explain to these people, who are spending the money from their own pockets, that there will not be a conflict between both conferences.

Brian Cowen (Laois-Offaly, Fianna Fail)
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I assure the Deputy that there is no competition or problem. The more delegations that come, both North and South, the more we welcome them. If we get 20 of them in the same month, all the better as far I am concerned.

I am aware of the Irish Technology Leadership Group and have met its representatives who are doing very good work. They have made a commitment to also working on the Northern side, which is perfectly fine. The IDA's record as a State agency speaks for itself. I do not claim everything was got right on every occasion but much more was done correctly than wrongly in regard to this country's foreign direct investment policy.

We have also become the tenth largest investor in the United States. Overseas investment between our countries is a two-way flow and Irish companies employ more than 82,000 people across all 50 of the United States. That statistic is not well known. Last year alone, more than 27 companies opened offices in the United States and more than 40 Irish companies have a presence in New York.

The level of foreign direct investment in Ireland relative to the size of the economy is one of the highest in the world. More than 1,000 multinational companies operate in Ireland, including many of the leaders in information technology and software, telecommunications, pharmaceuticals and medical devices, life sciences and international financial services.

Jimmy Deenihan (Kerry North, Fine Gael)
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What about competitiveness?

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am coming to that.

Jimmy Deenihan (Kerry North, Fine Gael)
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Thank you.

Brian Cowen (Laois-Offaly, Fianna Fail)
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US businesses form the biggest component of these investments. More than 450 US companies operate in Ireland and they have invested over $55 billion in this country.

In regard to competitiveness issues, significant adjustments are clearly being made to labour cost competitiveness in the context of this downturn. The European Commission and others have commented on the flexibility displayed by the Irish workforce in taking wage cuts across many sectors not only in the interest of maintaining the maximum level of employment as we go through this downturn and its reduced orders and real economic effects, but also in response to the need to address the competitiveness question. It is also clear that labour cost competitiveness is not the full picture when it comes to competitiveness. Ireland's ability to compete also relates to the quality of our people, the output of our work and the higher productivity available here.

In regard to why people invest, certain sectors of American industry, such as low end manufacturing, are no longer interested in coming to Ireland because they can find better locations at home in the United States or in South America and other parts of the world. For some time, Ireland's strategy has been to enter the area of high value manufacturing because that is where the best wages are provided for our people. That strategy has worked very well for us.

Jobs churn in every country or society that matures and develops. Thankfully we are all earning better wages now than we did 25 years ago because the jobs of that period are now located elsewhere. The jobs now available could never have been contemplated without the various changes that have taken place and the investments made in education and research and development. I have been told in New York by certain industries that they could not consider Ireland as a location once they learned our average industrial wage. However, other companies, including the leaders in several sectors of the modern economy, have located here and many spin off jobs arise from their investments as Irish entrepreneurs feed into the supply chains and begin to internationalise their businesses. This is reflected in the two-way trade that now takes place between the United States and Ireland not only in volume or value terms, but also in the cross-investments in US companies by Irish entrepreneurs to the tune of directly employing 82,000 over there.