Dáil Éireann debate -
Wednesday, 11 Jul 1962

Vol. 196 No. 12

Restriction of Imports Bill, 1962— Second Stage.

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

I move that the Bill be now read a Second Time.

The first reaction to this Bill may be that there is a certain contradiction between its terms and the present day trends towards liberalisation of trade but the Government consider that there is an urgent necessity for us to equip ourselves to deal with Iron Curtain countries. In these countries, trade is conducted by State agencies whereas in Ireland private traders in general are free to import at will from any source. In this respect, our country is practically alone among western countries and our non-discriminatory trade regime means that we have no special import concessions to offer State trading countries and there is, therefore, no inducement for them to purchase goods from us. The import policy of these State agencies is dictated by the need to secure corresponding facilities for exports. It is clear from our external trade statistics that there is an increasing imbalance in favour of the Iron Curtain countries. The Government feel, therefore, that it is desirable for them to have power to restrict imports from State trading countries in order to bring pressure to bear on their buying agencies. The purpose of the Restriction of Imports Bill, 1962 is to give the Government this power.

There is, of course, existing legislation which affords some control over imports. I have in mind the Control of Imports Acts 1934-1937 and the legislation relating to imports of agricultural products. The Government consider, however, that the procedure which these Acts require is not sufficiently flexible for the present purpose. It is important to have as much flexibility as possible in dealing with any situation which may arise in our international trade. The Bill is, therefore, drafted so as to give the Government power in general terms to restrict imports. The Government would make orders restricting imports from specified countries only where trade relations justify such action and it is not the intention to take any discriminatory action, under the Bill, against imports from countries with which our trade is regulated by trade agreements or international arrangements. The Government recognise that there would be disadvantages in the use of these powers and they would use them only where other methods fail.

It might be felt that any measures to improve our balance of trade will result in an undesirable increase in contacts, at commercial level, between this country and Communist countries. I think Deputies will agree, however, that this course would be preferable to the present situation in which they are allowed to benefit from our liberal trade policies without any compensating benefit to this country.

Mr. Cosgrave

This Bill is necessary because of the heavy imbalance between the imports from Iron Curtain countries and our exports to these countries. As the Minister remarked, there does appear to be a contradiction at present between the terms of this measure and the general tendency towards freer trade. Although I know it is not the intention to use this Bill or the powers under it to restrict imports from countries other than what are known as Iron Curtain countries, nevertheless, it does seem that the terms of the Bill would conflict with the terms of the Rome Treaty in so far as if this country became a member of the E.E.C. any action taken against imports from any Member country other than that which was laid down under the general agreement would conflict with the terms of the Treaty. However, that difficulty is unlikely to arise because the purpose of this Bill is to correct the present heavy adverse balance between this country and the Iron Curtain countries.

I would be interested to know from the Minister whether it is proposed to make orders under the Bill when enacted and if it is proposed to restrict imports from these countries. As the Bill is drafted the Minister, when an order is made, lays it before each House of the Oireachtas and, in the absence of a motion annulling it within the usual period after the House sits, it becomes law. In a case of this sort where there is no great urgency, the alternative procedure might be adopted under which positive affirmation by the House would be necessary before the order takes effect. It is hardly likely that there will be any urgency in making orders because the circumstances in which goods are imported are generally known in advance either to the Minister's Department or to the Revenue Commissioners.

There is another aspect of this matter. As far as I can see there is no penalty provision except that contained in Section 3. I take it that the contravention of any other provisions of the Bill are covered by the ordinary customs and excise laws and that, consequently, it is not necessary to have a special provision in the Bill to cover any case where a person or a company does something which amounts to a breach of the terms of the legislation.

Thise whole question of the extent of the adverse trade balance between this country and other European countries is one which has been referred to on many occasions. I know from the Minister's speech that it is not proposed to interfere with imports from any countries whose trading relations are governed by trade agreements or other international obligations. While that is probably reasonable enough, there is a very good case for reviewing these trade agreements. Many of them have now been in operation for a great number of years. Most of them were negotiated shortly after the war and while, in general, they are renewed either annually or at other periods, in the main, the trend of trade between this country and other European countries is very much more in favour of those countries than of this country.

It does seem to me that we should endeavour to correct that by whatever means are available to us in the negotiation of new agreements in the future and by ensuring that no discriminatory administrative action is taken in other countries to prevent exports from this country. In the past, we have had experience where, under the terms of a trade agreement, certain facilities and opportunities were provided for exports from this country which, in practice, were, if not nullified, certainly rendered extremely difficult by administrative action on the part of certain countries and in specific cases.

So far as trade with the Iron Curtain countries is concerned, there is very little justification for this country trading with these countries at all. The balance is very heavily adverse. Although the amount of trade between this country and Iron Curtain countries is, compared with our trade in general, not considerable, nevertheless one wonders why it is necessary for importers in certain cases to seek goods and commodities in these countries rather than elsewhere. I hope the Minister, in so far as it is open to him, will discourage imports from these countries in the future.

Generally, the proposals in the Bill will be welcomed. I believe they will provide some means whereby a check can be kept on imports in the future and afford an opportunity for effective action wherever it is considered necessary.

Major de Valera

While completely agreeing with the Minister in what he said—and it is quite unnecessary to go over what he said—I should like to look at the terms of the Bill as a Bill that may conceivably in the future be invoked for purposes perhaps other than have been mentioned. I am thinking specifically of the possibility in cases of near-economic emergency which can arise unforeseen from time to time. Such a Bill, being on the stocks, can be invoked for purposes that could not possibly be envisaged at this stage. The way it could be invoked could be for some reason or other to prohibit importations from a specified country.

I do not think anybody will question that if for any reason a Bill of this nature were invoked for such a purpose there would be a very good and sound reason for it. There might, for instance, be something in the nature of a near-emergency. But there is always a danger of a Bill of this nature being called into play to control adverse trends, say, in regard to the balance of payments. I am thinking, for instance, of the possibility of the use of a Bill like this in a situation such as existed in 1956. I am reassured, however, on that particular point, by the fact that the general trend, from the passing of the Rome Treaty onwards, is in another direction. I think we can therefore rest easy that the Bill is not likely to be used in this way. Nevertheless, it is likely to be used and if it is used, there is one specific point I would ask the Minister to consider, that is, the effects that sometimes arise when a section such as Section 2 (a) is put into force.

The simple thing to do, especially if there is a matter of urgency, would be to prohibit all imports under paragraph (a) of Section 2 from a specified country and that could be desirable and necessary. But if that is done, for instance, there may be in some unforeseen place some industry dependent on imports that are not directly the target of the Order made. Although the provisions of Section 3 provide for licences, there may be a time-lag in the procuring of the necessary licence which might have a very disrupting effect. I make that remark, therefore, merely to bring it to the Minister's attention and to point to the necessity for a machinery, if Section 2 is invoked, particularly Section 2 (a), for issuing, one might say, instantaneously, licences where licences are necessary. That is the first point.

The second point that arises is what is the position under existing contracts, if such exist. I do not think, for the immediate purpose of the Bill, that the Minister will have any difficulty there. However, if, for some reason, Orders are made under Section 2 prohibiting the importation of goods from a particular country—any goods manufactured or produced in or consigned from a specified country; for the moment, supposing we say that that is interpreted as all goods—if some urgency makes it necessary for the Minister, whoever he may be, to do the omnibus thing, then, if there are existing contracts, what is the position in regard to payment? It can happen and there was a period after the War when it almost invariably happened—in certain categories, anyway—where there were irrevocable letters of credit that were documents to be cashed on the consignment of the goods. If the goods are consigned from the country of origin but have not reached here and an Order is made prohibiting the import—this Bill is ample to cover that contingency— and the importation of the goods is refused on the quay, what is the position of the importer or the contractor, because in that case he is in the position of having paid for the goods?

These are just, if you like, administrative points that can arise on the face of a Bill just like this. I am reassured by the fact that I suppose problems of that nature can arise under many Bills or regulations and that the Department of Industry and Commerce is alive to the commercial necessities of the case. I do not think I am wrong when I interpret Section 2 (a) as possibly involving a simple blanket importation prohibition on all goods from a specified country. If that is so and if there is any danger of that contingency, particularly having regard to the fact that this Bill might at a future date be invoked for purposes and in circumstances quite other than those that we are considering at the present moment, it is merely a point which I should like to raise.

I would ask the Minister two things. One is to consider his exceptions, from the point of view of speed in issuing the licences, that there may be serious dislocation for somebody somewhere. The other is—perhaps I am stretching my imagination rather far when I make the point—that there is also the possibility of loss. I would recommend that both of these should be considered at this stage. I do not know what can be done to amend the Bill in order to do it but the matter could be considered at this stage, so that if a question arose in the future it could be dealt with.

Mr. P. Hogan

(South Tipperary): I welcome this Bill. The Minister mentioned that on the face of it it seems contrary to the general trend of tariff policy at present obtaining in the European scene and so it would appear to be, but it appears to be aimed entirely at one or two countries. That is a desirable thing because we have an imbalance of trade with some of these countries. Last year, with Russia, we had imports of over £1,000,000 and our exports were only £100 or £200. From Poland, we had imports of over a couple of million pounds and our exports there were, likewise, extremely small. These are not the only countries where that is happening, of course. It is desirable if we are to do trade that we should try as long as we can to do it on a £ for £ basis.

The regrettable feature of our trade with Russia is that the imports we got from Russia were largely pollard, barley and such products and it transpired that from some of our ports, we were exporting what was called unmillable wheat, while at the same time, on the same day, we were importing red Russian pollard.

I welcome this Bill particularly as I hope by its implementation the Minister for Industry and Commerce will correct that aspect of things in the interest of the Irish farmers and, in a measure, not alone control imports but also control his more wayward colleague, the Minister for Agriculture.

Mr. J. Lynch

It is important to remember—and I do not think anybody challenged it — that we have a very liberal import regime, in fact, one of the most liberal in the world, and in taking this step we are not stepping out of line with the import-export activities of other what I may call like-minded countries. This liberal regime that we have enjoyed has been to our advantage in many cases because it gave our importers, whether they be importers of raw materials, of semi-manufactured goods or of consumer goods, the opportunity of getting their requirements in any part of the world at the cheapest possible prices. That was important and it still is important from the point of view of manufacturers or producers generally who import raw materials or semi-manufactured goods because it makes them in turn more competitive when they can get their raw materials or other materials of industry at a favourable rate.

However, as has been observed, we have been importing a great imbalance of goods as far as our trading arrangements are concerned from Iron Curtain countries and I want to assure the House that the purpose of this Bill is limited absolutely to Iron Curtain countries. It would, perhaps, have been possible to set out in a schedule the countries which we intend to have covered by the Bill but I wanted, first of all, to have the greatest possible degree of flexibility and, secondly, I do not think it is necessary for us at this stage to take on ourselves to designate who or what are the Iron Curtain countries. We do not know if the Iron Curtain will recede or if it will expand. We hope it will not expand but we do not know. It is not for us to say and especially not on this Bill.

Therefore, there will be no question whatever of employing the provisions of this Bill against what we call like-minded countries and, particularly, as I said, countries with whom we have trade agreements or other international trading arrangements.

I said just now that we had one of the most liberal regimes in the world and in introducing this measure we were not doing anything other countries had not done. I may say in particular that Great Britain has machinery which is more effective, if you like, than what we propose to do here to restrict imports. So have the other countries with whom we normally trade. I think I can assure Deputy Cosgrave that in introducing this measure we are doing nothing that will in any way prejudice our application for entry to the Common Market, or, being in the Common Market, that will embarrass us in any way. In fact, it is quite possible that legislation such as this might be necessary for us if we do become members of the Common Market in order to achieve the same effect as far as the Common Market countries as a whole are concerned as we want to achieve now in respect of ourselves.

With regard to the trade agreements with other countries to which Deputy Cosgrave referred, these agreements are reviewed periodically. The two major agreements we have are with France and with West Germany, and these agreements are reviewed at two-yearly or three-yearly periods—I forget exactly which. However, the whole ambit of the agreements may be reviewed at any one of these two-yearly or three-yearly periods.

As far as our trading agreements with smaller countries are concerned, there is no set period in which these agreements are renewed or reviewed. Therefore, they can be reviewed at any time at short notice. As Deputy Cosgrave perhaps knows as well as I do, the driving of bargains with some of these countries has not been an easy exercise for our representatives. It has been their practice to drive as hard a bargain as possible in all these cases. However, that is beside the point in this Bill.

I now come to another question raised by Deputy Cosgrave—his suggestion that the type of activity we sought to control was not of such great urgency as would require measures of this type to be taken but rather that some post factum remedy might be applied. It is possible—in fact it is more than likely, I think, in many cases—that quick action should be available to us if we knew of a trader who was buying bulk quantities from one of these Iron Curtain countries and if we had goods that one of these Iron Curtain countries might well take from us—from a private exporter, of course. We should have a power to act quickly to ensure that our currency would not be used to buy vast quantities of particular goods, while another trader in this country would have big quantities of goods he could not dispose of in any country and which could easily be disposed of in the Iron Curtain country which is selling us these goods. As well as that, the type of goods we normally get from these countries are goods that can be imported in fairly large bulk. I need only refer to some of the commodities over the past few years— oil seedcake and meal, corn offals, unrefined sugar, steam coal and timber. These are goods that can be exported readily in very large bulk consignments and one consignment might easily create a very wide imbalance in our trade with these countries. Therefore, we should have the power to ensure that transactions we know might be contemplated can be stopped at the source, unless there is some corresponding advantage for exporters in this country. I suggest there is a good reason for this normal procedure whereby we act and let the action be justified in the House afterwards, if necessary, or nullified, as the case may be.

The only penalty provided for in the Bill is in relation to the non-disclosure or giving of false information in the case of applications for licences but the ordinary customs and excise penalties would apply in the event of evasion of the provisions of any order made under the Bill. I can assure Deputy Cosgrave that is very well covered already. Deputy de Valera raised the question of existing contracts, and what would happen in the event of goods being consigned under contract and being landed at a point of entry in this country. I can assure Deputy de Valera that my Department have very long experience of these activities. They are used to examining the bona fides of these contracts and, by and large, bona fide transactions that have taken place before a particular tariff or other import restriction is imposed will not suffer. If these transactions are bona fide, they will be honoured by my Department as a general rule. Again, as far as the issuing of licences is concerned, it is an exercise which is very common in my Department and I do not think there need be any fears that there will be delays in issuing licences in proper cases.

Deputy P. Hogan referred to the figures from Russia and Poland within the past year or so. He is quite correct —there was over £1,000,000 worth of goods imported from Russia as against £154 worth of exports to Russia, and there was something short of £2,000,000 from Poland as against a very small export value of goods to Poland. Therefore, it is clear that the necessity for this Bill is there and I am glad the House has received it in the manner it has been received.

Question put and agreed to.

Agreed to take remaining Stages today.