Irish trade with Slovakia could be significantly increased while Slovakian labour could help Irish labour market shortages, the Slovakian minister for the economy told Ministers yesterday.

Mr Ludovit Cernak met the Minister for Finance, Mr McCreevy, and the Minister of State at the Department of Enterprise, Trade, and Employment, Mr Tom Kitt.

Mr Cernak, part of the liberalising government elected last September, and Mr McCreevy signed a double-taxation agreement which should give a legal framework to increased trade ties.

He said there are significant opportunities in financial services, software and food processing in Slovakia. The country - traditionally dependent on old heavy industries such as steel processing - is badly in need of high-tech solutions and Irish companies could be very well placed to meet this need, he said.

The country, which is the "divorced partner" of the Czech Republic, is hopeful that it will be allowed into the first wave of countries joining an enlarged EU.

According to Mr Cernak, Slovakia is becoming an increasingly good place to do business in. He met 50 companies in IBEC's offices yesterday afternoon to outline the benefits.

Slovakia has been trying to emulate the Republic with a wide range of tax incentives, a focus on education, promoting its location in the centre of Europe and a highly-qualified "cheap" labour force.

Mr Cernak points out that the capital, Bratislava, is only 60 kilometres from Vienna, with good highway connections, but it is far cheaper.

International investors include Volkswagen, which employs 700 people at one plant, as well as Rhone Poulenc and Tesco.

Mr Cernak has also been discussing Slovakia's current problems of high unemployment, large budget deficit and a need for financial restructuring.