Traditional reservations about cross-Border trade are beginning to changethanks to new initiatives, writes Colm Ward.

On a good day, the drive from Tubbercurry to Dungannon takes about 2½ hours. On a bad day it can take a lot longer. It is a journey with which Mr John Mulkeen is very familiar.

He is one of a growing number of business people from the Republic who have opted to invest in Northern Ireland. Last year his company, Mulmuf Ltd, which employs 26 people in Tubbercurry, Co Sligo, opened a second plant in Dungannon, Co Tyrone. That plant, which supplies silencers and exhaust systems to US off-road machinery giant Caterpillar, now employs 14 people and Mr Mulkeen estimates that his company will do about €1.8 million in cross-Border trade this year. It may not be spectacular but it is undeniably a success story.

"We are very happy with it as a business," he says.

One of the most compelling reasons for Mr Mulkeen's decision to locate in Northern Ireland was because several of his main customers, including Caterpillar, were based there. The availability of skilled engineering workers in the area was another important factor.

The quality of the roads between the two plants remains a major difficulty. Mr Mulkeen describes the road between Sligo and Enniskillen as "diabolical".

Although perceptions are changing slowly, Mr Mulkeen believes that businesspeople on both sides of the Border still have reservations about cross-Border trade. "The Northern guy thinks that no one in the South will buy from him because he's from the North. At the same time, the Southern guy thinks no one in the North will buy from him because he's in the South," he says.

Co-operation Ireland is one of the groups on both sides of the Border working to change that perception. It provides funding through the EU Programme for Peace and Reconciliation to encourage cross-Border economic initiatives. It was under that scheme that a grant was awarded to Mulmuf to develop trading links with its customers in Northern Ireland. Other ongoing initiatives include a project to promote an Armagh-Monaghan digital corridor, to which Co-operation Ireland issued a grant of £90,870 sterling (€143,620).

"The measure [of our success] is the number of linkages rather than the number of jobs created," says Mr Tony Kennedy, Co-operaton Ireland's chief executive.

In order to build a normal society on this island, people should be able to trade just as easily across the entire island as they do within the North or the Republic at the moment, he says. "It's just a core way of letting people lead normal lives."

North-South trade has been growing steadily in the past decade. Between 1993 and 2000, it increased by 9.5 per cent annually. In 2000, trade from Northern Ireland to the Republic was worth about €100 million while trade from the Republic to the North was worth nearly €150 million.

InterTradeIreland was set up in the wake of the Belfast Agreement to develop these links. It is responsible for generating and providing information to create a climate that facilitates North-South trade.

"We have found that the biggest barrier [to trade] is a lack of information and a lack of knowledge, and that goes across all sectors," says Mr Aidan Gough, strategy and policy director with InterTradeIreland. His organisation is involved in "removing barriers" to trade, he says.

Having identified information as the key to the successful development of cross-Border trade, InterTradeIreland has come up with initiatives to facilitate the exchange of information. Examples are the "Focus" and "Fusion" schemes that link SMEs with third-level institutions and graduates so that smaller businesses can tap into expertise in R & D and sales.

Similarly, the "EquityNetwork" initiative is aimed at encouraging cross-Border investment by building links between businesses and potential investors.

InterTradeIreland has identified a number of obstacles that still exist to cross-Border trade, including an underdeveloped transport infrastructure and the high cost of telecommunications. The "Digital Island" project was introduced in an attempt to address the latter issue. The project examines matters relating to telecommunications and e-commerce to "really create a genuine digital island", says Mr Gough.

He is confident that trade links will continue to develop. Already, he has seen a "sea change" in the attitudes of businesspeople on both sides to the border.

Although North America remains the largest source of foreign investment in Northern Ireland, there has been a big increase in the number of projects from the Republic and Europe over the past five years, according to Invest NI, the body charged with attracting investment to Northern Ireland.

In the two years up to April 2002, clients of Invest NI based in the Republic announced eight projects representing an investment of more than €100 million and the prospect of creating 800 jobs.

Invest NI sees the ICT sector in particular as being ripe for development. This sector already accounts for the majority of foreign investment in Northern Ireland with companies being attracted by the ready supply of qualified workers. Irish technology companies that have located in Northern Ireland include Parthus and Aepona.

So, despite the difficulties with the peace process, it looks like the flow of money and trade across the Border will continue apace.

"We have a lot to offer companies here. We have a pool of talented labour drawn from a young dynamic population, more than 60 per cent of whom go on to third-level education. We have a higher percentage of students in IT than Great Britain, a highly developed and resilient telecoms infrastructure and a pro-business culture," says Mr Trevor Killen, director of Invest NI in Dublin.