Welsh first minister Rhodri Morgan and Irish prime minister Bertie Ahern have launched a £40 million programme seeking to boost trade between the two nations.

The funding comes from the European Union backed Interreg scheme and was developed by the Welsh assembly and the Irish government, in partnership with other organisations in Wales and Ireland.

Both governments hope that the programme will promote sustainable development in West Wales and Eastern Ireland.

Speaking in Dublin, Rhodri Morgan welcomed the launch.

"Wales and Ireland have been inextricably linked in terms of transport, geography, history and culture for many thousands of years. Recent political events on both sides of the Irish Sea have stimulated a desire to strengthen that relationship," he said.

"What is remarkable is that Interreg normally involves a land border. We have built our successful Welsh-Irish Interreg programme despite the 90 miles of the Irish Sea!"

Bertie Ahern said the programme's predecessor last year had "produced tangible positive results".

"I am confident that the new programme will contribute to the competitiveness of the Irish and Welsh economies, and the well-being of the Irish and Welsh people," he said.

The scheme aims to encourage the economic, social and technological development of the cross-border area, covering business and enterprise development, rural development, human resource development, communications in technology and transport, marine and coastal development and culture, heritage and tourism.

The total budget for the programme is around £40 million, of which the EU is contributing some £29 million from the European Regional Development Fund.

The programme covers Carmarthenshire, Ceredigion, Conwy, Denbighshire, Gwynedd, Pembrokeshire and Ynys Mon in Wales and the counties of Dublin, Kildare, Meath, Wicklow, Carlow, Kilkenny, South Tipperary, Waterford and Wexford in Ireland.