Committee on Finance. - Imposition of Duties (Confirmation of Orders) Bill, 1962—Second and Committee Stages. – Dáil Éireann (17th Dáil) – Tuesday, 27 Mar 1962

Committee on Finance. - Imposition of Duties (Confirmation of Orders) Bill, 1962—Second and Committee Stages.

Minister for Industry and Commerce (Mr. J. Lynch)

I move that the Bill be now read a Second Time. The purpose of this Bill is to confirm 17 Orders made during 1961 under the Imposition of Duties Act, 1957, which provides that Orders made by the Government under that Act, imposing or amending duties, must be confirmed in the calendar year following that in which they are made.

Three of the Orders imposed new protection. Eight amended existing duties which experience had shown were either inadequate or were open to evasion. Two others provided for new or increased duties which would come into operation in the event of existing quota or other import restrictions having to be removed. The remaining four Orders provided for reductions in the rates or scope of existing duties. Two of these are consequential on recommendations made by the Industrial Development Authority following reviews undertaken in accordance with the provisions of our trade agreements with Britain.

An explanatory memorandum on the Bill has been circulated to Deputies. I shall, of course, be willing to give any further information or answer any questions which Deputies wish to ask about the Orders.

Mr. McGilligan

I have been examining the statistical information the Minister has given us in the explanatory memorandum. There are 17 orders to be confirmed and he gives at the foot of the memorandum particulars of four orders which provide reductions of the rates of duties. All the rest either show increased protection or give protection in a new form. That I cannot understand. I heard the Taoiseach recently in a debate explaining it was not possible to help the farmers because it could be done only by way of protecting them against foreign products coming in, or by subsidy.

We got a solemn warning that out of our application for membership of the Common Market must come the feeling that anything that throttled free trade was dangerous at the moment. I cannot understand, therefore, why there should be one set of rules for farmers and another for industrialists. We have had the Minister for Transport and Power and satellites in the form of Parliamentary Secretaries flitting around warning industrialists about the serious challenge coming upon them and how they must be strong to meet it. We have been told that the protective barriers should be lowered to enable industrialists to feel a little bit of the chill wind of competition before it comes on them completely with entry into the Common Market.

Yet, here we have a proposal for 17 new orders, 13 of which increase the protective barriers. I should have thought we would be chary in introducing any more at the time when we should be bracing ourselves to face the future of free trade with some sort of hope that we would survive without protection. The standard is there. It is laid down in the Treaty of Rome that distorting of free trade will be looked on askance. Yet, here we provide for fresh protective duties.

Mr. Corish

Will the Minister tell us a little more about the actual commodities on which the duties are being imposed? They are divided into three sections, those in which duties are newly imposed, those in which duties are amended—I assume upwards— and those in which duties are reduced. I assume that, in respect of the articles on which there is a new duty, some firm or establishment in the country is beginning to manufacture them.

I can appreciate what Deputy McGilligan is saying in that we now seem to be affording additional protection whilst the general idea in the Common Market is to strip ourselves of protection. I do not think I would disagree with the Minister in what he is doing. If we join the European Economic Community, whether as associates or full members, it will mean that the industries with protection will have about eight years in which to divest themselves of it. I assume that what the Minister is doing here is for the purpose of affording such industries protection which they will have to shed in eight years and probably in those eight years they can build themselves up. I cannot see anything wrong with that.

Perhaps the Minister would tell us, in respect of wheaten breakfast foods, watches and chrome-tanned leather, why the duties have been reduced. I assume it is because we have no intention or either assembling or making these goods in this country. Perhaps the Minister would say in what way the duties on the following goods are amended, namely, shot gun cartridges, cider and Perry, spectacles and umbrellas. I suppose there is the usual reason for the newly-imposed duties on the balance which includes among other products, aluminium ladders, power-driver pumps, material for saw blades, towels and towelling, tinned meat and vegetable soups, wheat products, polyurethane. I assume it is for the purpose of affording these industries the protection they will undoubtedly need over the initial years during which we may be in the European Economic Community.

Mr. Tully

Or is it replacing the quotas?

Mr. J. Lynch

There is quite a list of commodities in respect of which duties are being imposed in order to provide for the possible removal of quotas. These duties are not yet in operation and will not be in operation until such time as the quotas will have to be removed in the event of our accession to the European Economic Community. The duties that are placed on them are not necessarily the duties that can remain. They will, of course, have to be negotiated as part of our terms of entry into the Common Market.

I shall take a general point raised by Deputy McGilligan. The fact is that we are not yet members of the European Economic Community. He tried to draw an analogy between agriculture and industry. The fact also remains that agriculture is subsidised to a considerable extent in respect of several items of production of the farmers. These may be varied upwards or downwards according as appears necessary, pending our accession to the European Economic Community. Similarly with tariffs on industrial products.

In most cases in which there have been increases, they have been necessitated by the import of unduly low-priced materials or products of a similar nature to those manufactured here from Iron Curtain countries, in some cases Far Eastern countries, where costs of production for one reason or another are much lower than the costs of production in this country. I think that applies in particular to one of the items mentioned by Deputy Corish, namely, umbrellas. It would be difficult to go through all the individual items unless I was asked specific questions in relation to them. As far as towels and towelling are concerned, the purpose of the amended duty is to offset evasions, of an existing Order, that were being practised.

Mr. McQuillan

Where are the umbrellas coming from?

Mr. Corish

Is this part of the legislation the Minister mentioned some time ago that was intended to correct our balance of trade between certain——

Mr. J. Lynch

That has nothing to do with it. The umbrellas in question were being imported from the Far East at a very low cost.

Mr. Corish

Japan or China?

Mr. McGilligan

That is a good umbrella phrase. Where in fact, is "the Far East?"

Mr. J. Lynch

Hong Kong. It is far enough away, I think, for the Deputy.

Mr. McQuillan

Is it a Hong Kong firm that is going to make them?

Mr. J. Lynch

Old established firms are making them here. They have been protected for a considerable period by tariff. That tariff had to be amended in order to help these firms to withstand this new and unusual competition from this Hong Kong firm.

Deputy Corish also mentioned wheaten breakfast foods and chrome tanned leather. These two Orders were made to reduce existing tariffs consequent upon the review by the Industrial Development Authority as requested by the British Board of Trade in the light of our agreements with Britain.

Mr. Corish

Are these the only two reviewed recently by the Board of Trade or were all of them reviewed?

Mr. J. Lynch

No, not all of them. There is a separate list of duties reviewed or under review in accordance with the British Board of Trade requests. These have been published. In fact, there is one commodity—braid —which was so reviewed and which is not included in this piece of legislation because the Order was made subsequent to the date of its preparation. The duty on this braid was reduced as a result of the recommendation of the Industrial Development Authority.

There are a number of other commodities apart from these which are under review and in various stages of review. These have been published. If I may mention three or four of them at random, they are: tableware of pottery, floor tiles, drinking glasses, boxes, cartons and similar articles of paper cardboard, etc, thread, footwear other than rubber and plastic footwear. That is just a run-through of some of the commodities being reviewed at the present time.

Mr. McGilligan

This was at the request of the Board of Trade?

Mr. J. Lynch

Yes; these were published as submitted to the Industrial Development Authority. Deputy Corish also asked about watches. Along with wheaten breakfast foods and chrome-tanned leather there is a decrease in the tariff. The reduction on the tariff on watches was made following requests by jewellers and by Swiss representatives who complained that the duty we had imposed was rather too high, having regard to the actual manufacturing cost of the watches concerned. As a consequence of these approaches, and having examined the situation, the reduction in the duty was effected.

There is one other Order to which I might refer and that is Order No. 107 relating to aluminium for beer containers. That is an exclusion order. There is a duty on aluminium. The purpose of this order is to exclude aluminium that is being imported for the manufacture of beer containers. Therefore, again, included in the list of seventeen, there is also this exclusion.

By and large, the number of new duties imposed has been much less in the past year than in previous years. I can inform the House that there were many other applications which were refused and, in the current year, since the beginning of January, no new order upwards, in other words increasing a tariff, has been made. The position is realistically consistent with our movement towards Common Market conditions.

Mr. Corish

Is the Minister making a special examination of the quota system of protection vis-à-vis the system of tariffs or the duty system of protection?

Mr. J. Lynch

As the Deputy knows, quotas are, as I have said before, perhaps the most extreme form of protection and the one form of protection that has completely disappeared among Common Market countries. The expectation is that we would have to remove quotas almost immediately, if not quite immediately, on our accession to E.E.C., and the tariffs that have been imposed and that are not yet in operation are imposed specifically for that purpose. In the event of these quotas being removed, the duties may be brought into effect so that some protection will remain for goods at present under quota. I might mention that some of the tariffs that have been imposed may have to be subject to review by the Industrial Development Authority before they become operative.

Mr. Corish

I want to be clear on this. Suppose we do go into EEC, when we are members of it, may we, at that stage, abolish the quotas and substitute tariffs, or must we, prior to our entry, have a tariff laid down with a view towards abolishing the quota and putting on the tariff?

Bill put through Committee and reported without amendment. Report Stage ordered for Tuesday, 3rd April, 1962.

Dáil Éireann debate -
Tuesday, 27 Mar 1962