I move:
"That the Dáil do now adjourn."
Undeveloped Areas (Amendment) Bill, 1962—Money Resolution. - Adjournment Motion: EEC Negotiations.
It is clear that technically this is a different debate from the one we had on Tuesday and that Deputies who spoke on Tuesday could intervene again but I should imagine that most of us would wish to regard it as the same debate, so that Deputies who have already participated would give way to those who have not had an opportunity of doing so. Nevertheless I would like to intervene to deal with some of the points raised at some stage. It might be agreed that I would conclude the debate at or before 4.30 p.m.
And then adjourn at 5 o'clock?
With Questions at 2.30 p.m.
Yes.
The breakdown of the Brussels negotiations, while a source of disappointment to all who value European unity, must be considered in the light of conditions as they will affect this country. The breakdown may, to some extent, afford us a breathing space in which to consider not merely the next step but also to redouble our efforts on all levels to prepare the country to meet the changed economic conditions which are inevitable, whether we join the EEC or not, or whether that body consists of the present membership of six or ultimately has a wider membership.
So far as this country is concerned, we are not directly concerned in the high policy questions involved in the breakdown of the Brussels negotiations. We cannot influence these questions, nor indeed is it possible for us at all times to follow the reasons behind them and the factors which influenced at particular times the decisions taken, especially the decision taken to suspend proceeding at present with the British application. I should like to express the view that I do not agree with the criticisms that have been made of General de Gaulle. I think, in a matter of this sort, so far as this country is concerned, it is unwise for us, and indeed wrong, to attribute blame to either side, that in fact both Britain and France may not be entirely free, at different stages of the negotiations, from blame. I do not think it would help the cause of unity to apportion blame.
Very considerable stress has been laid in recent years on the idea of European unity. This is, undoubtedly, an aim to which we subscribe and which is attractive. It is attractive because we recognise that the principal objective of that aim was to strengthen not only the defences of the free world but to extend and strengthen the economies of European countries and, in order to promote the development of those economies, to secure the joint efforts of member States and countries in attaining that objective.
One of the phrases that have been used a great deal in recent years is the phrase or description of being "a good European". I must say that at times these phrases, or sometimes the use of them, take leave of any sense of a practical approach to the questions involved. We are geographically a part of Europe and the facts that we are a part of Europe and have close ties, historically and otherwise, and, in the main, are all members of a Christian community, that we have trading and other interests prove that we have an interest in the development and strengthening of Europe. Similarly, we have close ties with the United States, with Britain and other countries where emigrants from this country have gone both in the remote and recent past.
The objective, as I have said, is European unity, to strengthen the defences of freedom and to ensure that Europe will remain strong and united. This idea of EEC developed from the breakdown in 1954 of the European Defence Community. In 1955, the Six met at Messina and after preliminary discussions and negotiations, eventually signed the Rome Treaty. The importance, from our point of view, of that organisation is, on the one hand, the impetus it has given to European unity and strength and on the other, the practical problems involved in the decision of Britain to adhere to that Community. We have held the view that once Britain applied for membership, because of our close trading association with Britain it was essential that we should do so as well. It is therefore in the light of the suspension of the negotiations that we must consider the present position.
The Taoiseach in his review, which was exhaustive, dealt in the main with what has already happened, although he adverted at certain points to what may happen in the future. I think it is correct to say that rarely have protracted negotiations involving economic, political and social questions terminated in circumstances in which there has been so much uncertainty and in which the principal participants do not appear to have reached a decision on what the next step will be. It is obvious from listening to speeches by the British Prime Minister and members of the British Government and reading comments in the British press that the immediate next steps have not yet been decided.
The prolonged uncertainty inherent in a situation of that kind is bad for any country. So far as we are concerned, I believe that prolonged uncertainty is bad for trade, bad for industry and agriculture. It is to that aspect of the matter that I want for the moment to advert. It is, of course, not possible for us to influence to any great extent the trend of future negotiations, but, on the assumption that negotiations will be initiated or undertaken either under the auspices of EFTA or between EFTA and the members of the Six, other than France, and that the objective of these negotiations will be either to lower tariffs and ultimately to associate Britain with the Six, either as a member or in some other way, it is important that this country should endeavour to ensure that we participate either directly in any such negotiations or at least have observer status. I recognise that we cannot gatecrash these negotiations. Unless we are invited and offered an opportunity of participating in them, we cannot of ourselves attend.
At the same time, there is a feeling that we were not in on everything that happened at Brussels. I do not believe that even if we had been present, we could have influenced to any extent what has happened or that in the light of what has happened, it would have made any great change. Nevertheless, from the point of view of keeping this country as fully informed as possible, we should avail of any opportunity to attend these negotiations or obtain observer status. It is a fact that we had an Ambassador at Brussels and that on many occasions officials attended there. Nevertheless, direct participation or observer status in regard to any negotiations is important to this country.
It seems at present uncertain what precise form these negotiations will take. The suggestions which have been canvassed would indicate that they will be undertaken by EFTA and the members of the EEC, other than France. Whether these negotiations will involve the United States through GATT or whether they will be invited to participate directly is merely a matter for conjecture.
The general trend towards freer trade appears to be generally recognised as one that is likely to continue. While agreeing that it is important to emphasise to industrialists, to workers and to the country generally that the tendency will continue and that therefore we must adapt ourselves to meet it, there is one aspect of the matter which requires some consideration. The Taoiseach, in the course of his speech on Tuesday, stated it was proposed to continue with the rhythm of tariff reductions and that further reductions would be operative from January, 1964. I want to enter a caveat on that aspect of the matter at this stage, to query whether it is wise unilaterally to continue tariff reductions unless we get some quid pro quo in exchange.
It may be all right to create the impression that we are able to comply with the tariff reductions envisaged in the EEC programme, ending with the elimination of tariffs in 1970. However, the question has to be considered: what if we do not become members or associate members? The problem involved for a great many industrial undertakings is that of the actual period in which these tariffs may be either reduced or eliminated. If we are assured that we will become members of this body or be associated with it, on the assumption that Britain also becomes a member, then it seems reasonable to continue the policy of tariff reduction. On the other hand, there is involved in this the great problem of redundant workers. This matter has been the subject of consideration now by the CIO and certain suggestions and recommendations have been made. I believe that up to the present nothing like sufficient advertence is being paid to the magnitude of the problems involved, should these tariff reductions become operative.
In this country, we have almost no experience of large-scale redundancies to the extent involved in membership of the EEC. Not merely will there be involved the problems of retraining, resettlement and re-employment of workers but the attendant problems of rehousing in different localities if workers are obliged to move from their present abode to new places of employment. It is to this question we must give consideration.
As I understand it, the European Social Fund is available or will be available to member countries. If, on the other hand, this country becomes associated with the EEC, I do not know whether the same facilities will be available under the Article of the European Social Fund. It says:
(a) At the request of the particular State the Fund shall within the framework of the rules provided for in Article 127 cover 50 per cent. of the expenses incurred after the entry into force of this Treaty by that State or by a body under public law for the purpose of ensuring productive re-employment of workers by means of occupational re-training resettlement allowances, and
(b) granting aids for the benefit of workers whose employment is temporarily reduced or wholly or partly suspended as a result of the conversion of the enterprise to other productions in order that they may maintain the same wage level pending full employment.
One of the facts that have probably obscured the realities of the situation in recent times is that with so much emphasis on membership of EEC, or association with it, the impression may be created that, if and when we become members, many of our problems will be solved. I believe nothing is further from the truth. No matter what group of States we are associated with, the important thing for us to realise is that it will be on our own exertions and our own efforts that the standard of living we will enjoy and the capacity to provide our people with improved economic and social conditions must depend. Whether we are competing on the British Market, as we have been accustomed to do in the past, or competing with any new organisation, our standard of living and improved conditions will depend entirely on our own exertions.
One of the facts in this situation is that competition is, if anything, more keen in EEC than it is in the market available to us in Britain. Last week a question was answered here showing the external trade between this country and the Common Market countries for the last ten years approximately, 1953 to the end of 1962. These figures indicate clearly the heavy adverse trade balance between this country and the member countries of EEC. While in some cases our trade has increased, the trend is heavily adverse, no matter what country we examine or what basis we apply. That poses two problems for us. It means that, whether we are members of or associates with EEC, competition will be intense. It means competitive trading which can only be met by the highest standard of efficiency, competence and skill, and by offering goods at competitive prices in order to encroach on that market.
Faced with the picture shown in these trade returns, I believe the time has now come when we should consider either on a multilateral basis, which, I suppose, would be the most satisfactory because of the advantage of having an international organisation to consider the representations and the case made, or, alternatively, on a bilateral basis, negotiations with the countries with which we have trade agreements. These agreements have now been in existence since the late 'forties or the early 'fifties. They have either been renewed, as initially negotiated, or with modifications. It is significant that in the trade pattern with all these countries the balance is heavily adverse.
Looking at the figures for the period January to November, 1962, we find that the percentage of exports to imports between this country and Belgium is 17 per cent.; between this country and France, 18 per cent.; between this country and Germany, 27 per cent.; between this country and the Netherlands, 21 per cent. ; between this country and Italy, 33 per cent.; and between this country and Luxembourg, .2 per cent. These figures require no emphasis to stress the seriousness of the situation from our point of view. I think the time has come when we should endeavour now to review these trade agreements. It may be that in some cases there is no reason why we can justify asking for a reconsideration or an alteration of the terms. On the other hand, we have had experience particularly in the case of the export of lamb to France, of the terms of an agreement not being adhered to. My experience is that, when the OEC agreed to liberalisation up to 90 per cent., we were one of the countries that accepted that degree of liberalisation and scrupulously implemented it in practice while other countries, while subscribing to it in theory, employed administrative devices to avoid the full consequences of the particular liberalisation agreed under OEC auspices. So far as we are concerned, we scrupulously adhered to the undertakings we had given in accepting this arrangement.
The importance to this country of increased trade with Britain has been traditional policy as far as this Party is concerned. We have consistently advocated, because of the proximity of the British market, the traditional economic links making trade relatively easy, and the general pattern over a great many years, that this is our most important market. We have available to us a market of over 50 million people. The trade figures run at approximately £250 million per year on a two-way basis. That is a sizeable trade by any standards.
We asserted that view while, at the same time, asserting and defending our political rights. The fact that in recent times the Government have recognised the significance of that trade is a matter for satisfaction. Very often when views are expressed and policies propounded, they do not find initially the appreciation which comes with the passage of time. Nevertheless, recognition of the value of that trade is now general and completely understood throughout the country. Whether it is possible in existing circumstances to strengthen the opportunities we have in that market and to improve these opportunities is, I believe, a matter which requires special further consideration. We have a price link in relation to cattle and sheep. Even in that respect further improvements might still be possible and I believe that if the matter is considered by both countries, it might well be possible to improve our trading arrangements to the mutual advantage of all concerned.
One of the factors in this situation that has been the subject of so much discussion is whether the present arrangements under the EEC are the most satisfactory possible. I do not think the views we may have on this matter are of any great importance because, as I have said, no matter what decisions are taken, particularly decisions on high political questions by member countries, they are to a large extent outside our sphere of interest and indeed our sphere of influence. At the same time, all who value freedom wish to see Europe strong and united in order to strengthen the defences of freedom which, in the main, rest on the United States of America.
The concept of a united Europe, the idea of a number of countries coming together and agreeing on economic, social and ultimately political questions, is one which has many attractions. It is necessary, however, at this juncture to consider whether the concept of a United Europe as enshrined in the Treaty of Rome may not, because of the complexities of the situation, be proceeding too quickly or whether, on the other hand, there is some alternative method of ensuring that the free world, at present grouped in what is known as the Atlantic Alliance, could not resort to alternative groupings.
The European Commission, which in the main operates the EEC, is a body representing the member countries on which are represented higher officials of these countries, and it often seems to me that these officials— though some of them have political experience; some of them may even have been directly involved in politics —proceed on the basis that because the Commission agrees on a particular matter, agreement is immediately capable of being implemented in practice. The difficulties of member countries, and more so of countries not members, are to get these ideas and objectives implemented.
The less rapid approach suggested in some quarters, particularly in France, for the immediate future might still secure the objectives of the Treaty of Rome, without, at the same time, lessening the effectiveness of the organisation or lessening the opportunities the groupings will ultimately have for strengthening European unity. This country has a traditional approach to international affairs, based on the acceptance of the rule of law and on the acceptance of the implementation of the rule of law, on the assumption that the countries concerned are prepared to implement in practice what they accept when they adhere to these international organisations, and while we have, of necessity, a limited sphere of influence, nevertheless this country has in many lands influence in directing the events of these countries. We have a great missionary tradition. We are represented in countries not in the EEC as well as those in it, we have secured the respect of a number of the newer states and nations that have recently won their freedom and, as an independent country, a country that has for long fought for its freedom, we have secured the respect of these countries and their peoples.
In that way we can play some part in promoting support for the principles we believe in. I believe that in the immediate future the important thing for us to concentrate on is the strengthening, first of all, of our own economy to ensure that if any negotiations take place we will be represented at them or at least have observer status, that at the same time we do or say nothing that will attribute or apportion blame to any of those directly concerned in the negotiations that have recently terminated. Whether we do or not, it cannot affect events and may, in the circumstances, react unfavourably on us in the future.
Our objective, as it is the objective, I believe, of all these countries, is to strengthen the political, economic and social framework of Europe. The ultimate objective of the Treaty of Rome was, as laid down in the Preamble, to strengthen the safeguards of peace and liberty by establishing this combination of resources and calling upon the other peoples of Europe who share their ideal to join in their efforts. That Preamble involves political, economic and social questions. Undoubtedly, the problem of defence is also involved.
As far as this country is concerned, that is a matter in which we will have very little say or very little direct interest except to help strengthen the defences of Europe against the onset of Communism. I believe that in so far as opportunity offers, the Government should endeavour to avoid the long period of uncertainty that is likely if these negotiations are to be protracted, that we should review our trade ties with Britain with a view to extending these ties, if possible, and that we should review also existing trade arrangements with continental countries, with a view to strengthening our balance of trade position with them, and that we should at all levels try to ensure the full realisation of the problems involved for redundant workers.
That involves a concentration of effort between industrialists, trade unions and the State. Certain local authority efforts will also be involved. These are the difficulties to be faced and surmounted if we are to provide a high standard of living or even maintain the existing standard in the keen competitive atmosphere developing, irrespective of membership of the EEC or of any other trade arrangements that may be made.
No useful purpose can be served by any attacks on France or the President of France. I think it is necessary to say that in this debate because of the attitude of newspapers in Britain and elsewhere. We must look forward to the time when we shall be taking part in Europe.
I intervene to comment briefly on something Deputy Dillon said. As this is a serious debate, as the Taoiseach said, I have no desire to follow Deputy Dillon in his efforts to score Party points but I think this comment should be made. We are dealing with conditions as they are today in 1963 and we must face them and just as this Party faced the conditions in 1933 and 1953 in the circumstances of the time and took action accordingly, so, in the circumstances of to-day, action must be taken in the light of those circumstances. That practically disposes completely of what Deputy Dillon said.
After that, the only proper course for us is to go ahead with the economic programme at present in train. As the Taoiseach said, we base it on the assumption and the probability and the policy that we shall eventually take part in an integrated Europe, but in the meantime there has been in operation a policy which has brought results that I need not detail. It is the only policy in the present context to meet the loosening trade situation in the world generally, no matter how it develops, and for that reason, whatever this debate may produce, the immediate thing is not to flag in the development of that programme or in our efforts to build our agricultural and industrial economy and to continue to ensure that as far as we can we shall be prepared to meet the competition that will have to be met in our economic life in the years ahead, whether we are actually in Europe or not. That is the most essential thing for us at the moment.
As far as the Irish application for full membership of the EEC is concerned, a discussion on it at this stage is purely academic, to use the Taoiseach's words when he referred here to the suggestion made by us in connection with the possibility of obtaining a referendum. The position now is that his application for full membership is purely an academic question.
I do not get any pleasure in suggesting to the Taoiseach that the lessons which he has learned in the past few weeks are ones that should never have been necessary as far as he is concerned, with his wide political experience, his years of leadership in a Party which has had over 25 years of control or office in this State. His lack of foresight in connection with recent events is one that must give the public a great feeling of uneasiness regarding his wisdom and fitness to lead the country in one of the most difficult periods it has ever faced. When I say that, I want to be quite fair to him and say that so far as the Fine Gael Party are concerned, they followed where he led. Instead of helping by a critical examination of the situation, by requesting the Taoiseach to hold back and be more careful, to use more caution and foresight in his approach to the problem of EEC, they simply rushed in after him, without consideration and without thought of the implications, with the result that they have both received a shattering blow to all their hopes because they were ill-prepared for any alternative.
They could not credit that the situation which has now arisen could possibly arise in spite of the evidence of their ears and eyes and in spite of statements made in the past 12 months in Britain and elsewhere, first, about Britain's proposed membership and secondly, about the possibility that Ireland would be offered associate membership rather than full membership in the event of Britain becoming a member of the Common Market.
Deputy de Valera is right when he states that it is no use to blame General de Gaulle and no use to follow the British Tory Press in trying to smear de Gaulle for what has happened. We know the techniques of the British newspapers over the years when they adopt this type of campaign and it is very disturbing to find members of the Irish Government falling into the trap prepared for them in that regard by the British Tory Party. The last thing we should do is to follow the line of abuse in Britain because it is a line adopted as a cover for the British Tory Government's failure to face realities in regard to the whole problem. They failed to put into effect in Britain the type of policy which would save them from the disasters of huge unemployment which they face today and as an escape from facing the realities of dealing with their problems, Britain made a jump to get on the Common Market bandwagon.
She could have been there in 1958 and turned it down. She now turns European. We know her European idealism is one that has arisen out of expediency and when Britain took the decision at this late stage to pretend to be European—the Tory element at least—our Government followed them with the very same type of propaganda. We are Europeans, the Taoiseach says; we were always Europeans and we were always anxious to take our part in the European stream of culture, art, literature and so forth.
The position in Britain, as outlined by the late Mr. Gaitskell in May 1962, is given in the following quotation. He was a man who, if alive today, it is suggested, would be the next British Premier. He had this to say:
To go in on good terms would, I believe, be the best solution to this difficult problem. And let's hope we can get them. Not to go in would be a pity, but it would not be a catastrophe. To go in on bad terms, which really meant the end of the Commonwealth, would be a step which I think we would regret all our lives, and for which history would not forgive us.
That is what he said in a broadcast on 8th May last, as Leader of the Labour Party.
This is the text of the resolution passed unanimously by the British Labour Party Conference in 1961:
This Conference does not approve Britain's entry into the Common Market, unless guarantees protecting the position of British Agriculture and Horticulture, the EFTA countries and the Commonwealth are obtained, and Britain retains the power of using public ownership and economic planning as measures to ensure social progress within the United Kingdom.
It was quite clear to the Premier in Britain who wanted to go into the Common Market, accepting, as he said, the full implications, that there was an alternative Government looming up all the time who had made it clear that they would not accept membership of the EEC, unless those matters were guaranteed. During that period, five by-elections were held in Britain and one or two candidates stood as anti-Common Market and there was a signal to the British Tory Party that they would not get a mandate in the next general election.
The Irish Government have an Embassy in London with highly paid officials who are supposed to have their ear to the ground and know what is happening. They should have advised the Government that the position was not as it appeared to be. Government information all along the line in this matter was completely inadequate, or if those officials gave the information to the Government, the Government were not prepared to listen. The Government should give an explanation of their lack of up-to-date and proper information on the political situation in Britain. This dreadful situation should never have arisen in which the Taoiseach is caught without any alternative and without any views except: Wait and see: wait until we find out what happens in Britain. The Taoiseach has found in this House that a lot of his pigeons have come home to roost.
I shall not quote all his speeches but one thing should be put on record because it arises as a result of an announcement made last night in connection with a description of Ireland by a UN organisation as an undeveloped country. This was one of the most important news items that could be made known to the country but the wishy-washy, mealy-mouthed organ of the Government, Radio Éireann, disposed of it in two sentences buried in the other news items. It did not count. I think it is of the utmost importance to know how we were described by an international body—in the light of our proposal to go ahead and allow our application for full membership of EEC to stand. We read in the Irish Independent:
In 1961 World Economic Survey lists Ireland among "under-developed countries "...
This report was prepared by a special working group of the UN Commission on International Commodity Trade and it referred to "less developed" countries including Africa, excluding South Africa, South and South-East Asia, excluding Japan, Latin America, the Middle East and Greece, Ireland, Portugal and Spain.
I do not think we should die with shame that we are so described. The facts of life are bitter at times but when we know them, and accept them, we can deal with them. If we do not accept them, if we have our heads in the clouds, the fall is all the greater. That international body which described Ireland as undeveloped was only repeating, if you like, what the Taoiseach said in this House in 1960 in the course of the debate on the Trade Agreement with Britain. He said:
... we must be prepared to accept, even as one of the so-called less developed countries——
He put it as "less developed countries "——
——the obligation to afford a reasonable measure of reciprocity in return for any trade advantages we may receive.
He also said:
The best situation possibly for us would be association with the Common Market, if Britain were also a member of it, on a basis which satisfactorily took account of our economic circumstances.
I repeat: "... on a basis which satisfactorily took account of our economic circumstances ". Yet, the Taoiseach has declared to the people in Brussels that we will accept the full implications of the Treaty of Rome, that we will have all our tariff barriers removed by the end of 1969, that we will be prepared to accept the full blast of competition from the other countries at that stage, although he admits that we want admission on grounds that would take into account our economic circumstances.
The Taoiseach was questioned in this House a few weeks ago about his statement referring to Ireland as a so-called under-developed country and he took the opportunity to attack me and Deputy Dr. Browne for daring so to describe the country and that was published under headlines which suggested that we were trying to harm the good name of the country. What we wanted to do was to bring the Government down to earth. It was the Taoiseach who had so described the country. Let us be quite clear about that. When the discussions were going on in 1958 in regard to EFTA and GATT, this country was described by Irish officials as underdeveloped and they put forward a tremendous case why Ireland should get special treatment, and the other countries mentioned were Greece, Turkey and Iceland. Up to 1960, our Government and our civil servants put the case that Ireland should get special treatment as a so-called under-developed country. What change took place since 1960?
Good Government.
I will accept that the Deputy believes that himself. I will accept also that the Government are no worse than the Opposition, as I know them, would be if they were in Government. I will accept that, but I cannot accept that a sudden change took place from 1960 to 1962 which justified the Government switching from the statement that we were an underdeveloped country up to 1960 and that overnight we are able to take our place with the highly developed European countries who are members of the EEC.
The figures for unemployment today prove that even if there were, shall we call it, a temporary spurt in our economic development, that spurt has now become a trickle. Today we have 69,000—almost 70,000—unemployed, 10,000 more than the figures for this time last year, and we cannot blame the weather for all of that figure. Apart from the fact that the dynamo has slowed down, our exports have gone down and our imports have gone up. On that basis, we are little better off today than we were in 1959 or 1960, and there is no sane reason why the Government should alter their view of 1959 that we should look for and get special treatment in any trading group. There is no reason why they should change that decision and say: "We will go the whole hog and chance the Common Market for full membership."
I will not repeat what I said in the past 18 months. Even if an arrangement is made in the next 12 months for some sort of association for Britain with the Common Market, there is no possibility of Ireland being accepted as a full member. There is no point in leaving our application lying there, collecting dust. I do not think the people in Brussels will embarrass us by saying: "Take away your application; it is a waste of time," but I think we should now be probing the possibility of getting a trade agreement formed in association with the members of the EEC that will take into account our link with Britain. We should at least be looking for the advantages of a trading association with the EEC. In my opinion, we are not going to be invited to do this. We will have to look for it but certainly the idea of leaving the application for full membership should not be considered by the Government.
I do not intend to go into detail on the political implications or the Taoiseach's promises, or the question of neutrality, or anything like that. There are just two points with which I want to deal, points which are most important to everybody in the country. One of these is the position of the farming community and the worker. Deputy Cosgrave said that we have a breathing space during which to put our house in order. I agree with him that it is a great godsend that there is a breathing space, but there would not have been that breathing space if the two large Parties here had been successful with their application for full membership. What was going to happen the people of this country in that event?
In regard to the agricultural problem, it is no harm to put this on record. The Taoiseach the other day when dealing with the Common Market admitted that openings for agriculture did not seem to be very good. That is a big change from the Utopia which was promised to the Irish farmers for the past twelve months. Up to that, we had speakers up and down the country saying that there might be difficulties for industry and that a certain amount of re-adaptation would have to be undertaken in Irish industry and that there would be a certain amount of redundancy, but that agriculture was the main reason why we were applying for membership. That was one of the songs which was sung down the country to the farming community and echoed by alleged spokesmen of the farmers. I refer now to the rancher element and not the small farmer. The rancher element know, as the Taoiseach knows, that the only possible opening for Irish agriculture in the Common Market was for beef and that other lines were out. Theoretically, we would not be prevented from exporting pig meat, butter, eggs, poultry or potatoes, but what would be the point of exporting these to countries which were already overproducing them at the moment?
As I said, and I do not want to repeat myself, all the stores were full of these commodities and where then was the Irish farmer to sell his goods in Europe? The situation with regard to the farmers and the small farmers in Europe is serious at the moment. We hear very little about it from the Irish Government.
The British Farmer and Stock-breeder for June 19th, 1961, contained a report arising from the visit of a special group to the Common Market Agricultural Commission which dealt with the position of the farmers in Europe and also that of the British farmer. They reported back that some 8,000,000 people in the Common Market Six Countries would go out of agriculture during the transitional period. As a result of their inquiries, they found that in France this process was being speeded up by Government policy by withholding State aid from farms below a certain valuation and size; in other words, put the squeeze on the small farmer in the European countries.
In Western Germany in 1958 and 1959 alone, there was a decrease of 23,000 farms—small farms wiped out. I do not know what the figures are to-day. I find difficulty in getting these figures but I assume the figures I have given are accurate and I challenge the Taoiseach to produce the correct figures, if these are not correct. I stand over what I have said here. Those figures were available to Irish economists and Government advisers here. In 1961, Garrett Fitzgerald speaking on the Irish farms said that it would require a considerable effort by many Irish people to adjust themselves to the concept of agricultural de-population as a positive aim of public policy. That was a statement by one of the Government advisers, to the effect that it was going to come as a shock to Irish people to realise that agricultural de-population would be carried out deliberately as part of Government policy. I know that many Deputies will not stay awake at night thinking about what he said but it is no harm to have it on the record because of the fact that he seemed to be one of the Government spokesmen on the Common Market.
I turn now to a wider source of evidence on the situation of agriculture. In an FAO report of a review of the agricultural situation in Europe, at the end of 1961, the first paragraph states:
The chief aim of most north western European countries in 1961 has been to overcome difficulties pertaining to excess supplies and marketing difficulties of certain animal produce and the resulting adverse developments in prices and farm incomes.
In 1961, there was a serious situation in the Common Market countries with regard to over-production. A further look at the FAO report is very revealing. It stated that surpluses already existed in soft wheat, sugar, pig meat and dairy products, and even for beef, a decline in prices is shown for 1961. In that year, Italy had to suspend imports of wheat, while France had to support beef prices by State purchases. The French Government had to buy the beef and store it.
On the overall position, the report concluded by saying that the technological advances shown in the past decade were likely to continue into the 1960s. In other words, the hopes of the people who say that there is great opportunity for our farmers in the future because control would be exercised in Europe, are not correct, in the opinion of the FAO people who hold that the tremendous technological advances of the past decade will improve and that there will be greater production in those six countries in the 1960s. As far as I can see that report was not taken into consideration when the small farmers were advised to get on to the Common Market bandwagon. A casual look at the Farmers Bulletin will show the huge amounts of milk being produced in Europe. There is overproduction. It amounts to the fact that in these highly developed European countries, full advantage is being and will be taken of the technological advances that have been made in agriculture. The result is that there will be an increased output and the belief here that the lower prices available will help the Irish producer is, to my mind, a fatal belief, it is a fatal line to follow.
Output is increasing in those European countries. In spite of that, in the Treaty of Rome—for the benefit of those who believe that document—the aim is to increase agricultural production in Europe. How is that done? One way is by reducing the number of people in agriculture. It is quite clear to me, at any rate, that one of the prime objectives of the Common Market policy, as far as agriculture is concerned, is to reduce manpower. The figures are—I hope the Taoiseach will remember them—that since 1954, one in every five people in the EEC countries who were farming have left the land. In 1960, one in every five has gone. This may be desirable in the EEC countries. I do not know. It may be desirable under EEC policy. There may be density of population. The people who leave the land go to towns and they will be absorbed in industrial employment there, but a further de-population in rural Ireland will be disastrous, because depopulation in rural Ireland is not a matter of going to the nearest town to get industrial employment. It is a matter of leaving the country. We will provide a pool of untrained workers if our admission to the Common Market is accepted—a pool of untrained workers for European industrial concerns.
Deputies may say that is far-fetched. I do not know whether the House is familiar with some of the regulations which have been laid down by the EEC people on migration of workers. I have a copy of some of these regulations here. On 16th August, 1961, the Council of the EEC, on the recommendation of its Commission, issued a regulation—No. 15—in which they set forth the first measures concerning the entry, employment and residence of workers from one State to another. I will not bore the House with details except to pinpoint some of what, to my mind, are important provisions. The preamble to this Regulation No. 15 emphasises that the regulations are designed primarily to facilitate the employment of aliens from countries which are members of the Community. In other words, if Germany and France need workers for their industrial potential, the regulations enable them to take cheap labour from Ireland and send them over to Germany, France or Belgium. This is one of the regulations.
In addition each particular State must appoint a regional employment centre for adjusting supply and demand and replacement of workers. The Commission, together with advisory and technical committees will be responsible in collaboration with the member states, for seeking appropriate means of estimating tentative unskilled labour likely to give rise to employment. To this end, it will look to and, if desirable, recommend to the countries concerned, the organisation of rapid vocational training sectors for the special skills short of manpower observed in their country. Next, if there is a shortage of manpower in Germany and there is an accumulation of manpower in Ireland, immediate steps will be taken to bring over the surplus manpower in Ireland for employment in Germany.
That is the position as far as the regulations laid down by the EEC on the free employment of workers is concerned. We are at the moment facing the issue—as the Taoiseach will not accept my views—that there will be a huge number of people disemployed, or would be, if our application were successful. In addition to that, we have this land policy which will depopulate the countryside. I am not accepting that the Government's alternative to stabilise the population in rural Ireland has any hope of success. I refer to this Land Bill which is on the stocks, which aims at increasing the size of the Irish farm. That is the way it will be done, by increasing the farm to 45 acres. By so doing, you inevitably help to remove those who are in the process of going at the present time. It may be that a Bill like that when it reaches the House will calm the public and save the unfortunate farmer from the worry of thinking the Government are letting him down and he will be in a cosy coma while his execution is being planned, always living in the hope that there is a 45-acre farm around the corner. It could not be done for the past 40 years because we were told there was a shortage of land. How can it be done now? That is the funny part of it.
The Minister for Lands went to Kerry and told the people: "Be very nice to foreigners; they get annoyed and hate to think they are not wanted." What is the position? Under the Treaty of Rome, we must give the same rights to the foreigner, no matter who he is, who buys land here in Ireland as we give to the Irish farmer, the same right to buy a farm in Roscommon, Kerry, Cork or Mayo as a native. What is the position in Germany? Take land in Ireland valued at £100 an acre; similar land in Germany is costing from £300 to £350 an acre. It is an incentive for people in those countries with money to spend to come here and buy the land in Ireland at double the price an Irish farmer could afford to pay for it and it will still be a bargain for them.
The only way a European or a foreigner can be stopped is by way of a 25 per cent. purchase tax and that will not stop the influx if barriers are opened. It would appear that I look on foreigners as strangers and that I do not want them in the countryside. Anything but—that is not my view at all. I take first things first. We have a duty here in this country. Let us look at the Constitution. It speaks of placing the maximum number of Irish people at home on economic holdings and until we do that, there is no point in browsing on the theory of an influx of foreigners.
It may be a very rude comparison to make at this stage, but, taking the depopulation of the Irish countryside into consideration, the loss of employment as far as workers are concerned in factories, the decline in business, I believe that opening the doors, as the Government were prepared to do, would have the same effect on the population of this country as myxamatosis had on the rabbits. Now we know that a new breed of rabbit has grown up. It is immune to that disease and what we have here in Ireland is a new breed of person living in Ireland because the influx of foreigners to this country is submerging the native population.
I do not think we can look at the present moment with anything but a sense of relief that we have been saved from disaster by outside influences, over which we have no control. It must be clear to the people that this Government and the major Opposition Party were prepared to lead them along a path that would have meant racial suicide. Let us put it this way. The Olympic Games take place every four years. The people who take part in those games are highly trained, dedicated athletes who fast and go through all sorts of training hardship in order to compete with their colleagues in the world of sport. A simple amateur who got up the week before and started to practice and get ready for the Olympic Games, how long would he last and how far would he get? We are just like an unfortunate amateur competing against the trained professional athlete. We do not stand a chance. This applies to the removal of tariffs. This country has been over the past 30 years wearing overcoats, underwear, mufflers and everything else. Now the Taoiseach wants to strip them all off in one go. What is likely to happen? If not a sudden death, at least a bad case of pneumonia.
That is the comparison I want to make at this stage in regard to the actions of the Government in trying to get us to do something for which we are ill-prepared. The matters of neutrality, defence and political commitments are major ones which I do not propose to discuss now. I am pinning my case purely on economic grounds and saying that we are not prepared in any shape or form to meet the competition with which we shall be faced. Deputy Cosgrave said there would be a breathing space. I think the breathing space will be a considerable one as far as this country is concerned but I do not think that time should be wasted. I do not think we should be looking forward and hoping that perhaps we will get in in two years' time. There is a job to be done here in this country. As the Taoiseach has always stated, we have to stand on our own feet and no later than 1960 he made that clear in this House. We must stand on our own feet and we cannot look to anybody else to do the work for us.
If the Taoiseach believes that and if the Government believe it, it is up to them to take the emergency measures necessary to help the existing position and then start from there to develop. It means a radical change in the Government's view on private enterprise. It means the State itself will have to move into the field the same as the Sugar Company has done in the processing of food. The Taoiseach will have to get down to that, take his head out of the clouds as regards European idealism and safeguard the interests of the Irish people. If he takes steps along those lines I have not the slightest doubt he will have the full support of all the Deputies in this House and, even though he does not like it, he will get support from our small group to the utmost of our ability.
In the very long statement the Taoiseach made the other evening when he opened this debate, he dealt very widely with the factual situation before the breakdown of the negotiations, and subsequently. I think one could sum up the whole speech as being somewhat Asquithian in tone; in other words he was not prepared to commit himself as he has done heretofore in this House.
I propose to deal briefly in my opening remarks with the statement made by the Taoiseach the other day in relation to the negotiations on the Irish application. He brought it up to date, to the 22nd October, 1962, when it was agreed that the Irish application would be accepted in principle and would be considered on a date to be decided on by the Irish Government. The negotiations failed a week ago. I would like the Taoiseach to tell the House when he is replying if any discussions of any sort took place at Ministerial or political level between the 22nd October and the date of the failure of the EEC negotiations with the United Kingdom and other countries a week ago.
The reason I ask the Taoiseach the question is this: The other applicants for full membership along with the United Kingdom and Ireland were Norway and Denmark and—I believe this to be correct from the information I have—negotiations on behalf of both those countries were well advanced and the application on behalf of both those countries was dependent to a certain extent on the application of the United Kingdom, as ours was, in that their application depended on whether the United Kingdom became a member or not. Such being the case I fail to understand why we had no negotiations whatsoever although our application corresponded more or less in its terms with that of these two Scandinavian countries.
The Taoiseach went on to deal with the situation in his somewhat factual statement. He spoke early on about the growth of our economy. Although the growth of our economy seems to be largely a matter for another debate, with some of the factors that present themselves to us today we cannot exactly congratulate ourselves on that matter. The Taoiseach did sound one very noticeable warning and that was that we can expect in our external trade more competitiveness with regard to the British market and we cannot expect the easy situation that we enjoyed heretofore. I do not disagree with that. Obviously over the last couple of years our position vis-á-vis the British market and our preferences there have been gradually deteriorating for reasons to which I cannot refer at present.
The Taoiseach went on to refer to the EFTA and the question as to whether it was desirable for us to join some other trading group. Then he passed on to GATT and mentioned the fact that probably we would accede to GATT. I took it that that really was the major contribution he made to this House in relation to our policy. While I have no objection to Ireland acceding to GATT, it is a pity we did not accede to GATT before. It has no particular benefit for us in the somewhat difficult situation in which we find ourselves at the moment, if we advert to what Government spokesmen so often say, that agriculture is vital to our economy because GATT so far, in its clauses, relations, negotiations, and so on, has no relation whatsoever to agriculture. Though there is no particular reason why, in the future, it should not have, up to date it has not in any way impinged on agriculture.
With reference to the Taoiseach's remarks about EFTA, he did not make it clear whether the Government were going to make application to join the European Free Trading Association. In fact, repeatedly in this House in answer to Parliamentary Questions tabled by members of the Fine Gael Party, he has stated that he sees no benefit whatever in joining the EFTA group. Would the Taoiseach like to tell the House now, when he comes to reply, whether he sees any particular advantages at the moment in joining the EFTA group? It seems to me that EFTA is simply a marriage of convenience, which took place some time back between the countries concerned —a union in which they sought, first of all, to try to increase their own trade and, to a certain extent, set up an opposition trading group to the European Economic Community, with the idea possibly of gaining advantages later on.
I wonder if there is now any change in that particular outlook. As I know the position, EFTA has no secretariat. It has offices in Geneva, or somewhere in Switzerland, where meetings take place from time to time; the different foreign ministers gathering there meet as a body politic. There is no particular treaty. The aim is to reduce tariffs amongst themselves, in line with the Common Market. That is to the advantage of the countries concerned possibly, but they have no close treaty ties with each other. If we were to join EFTA, I wonder what advantages would accrue. The Taoiseach has not indicated whether or not the Government are considering doing that, but it would be a good thing if he were to tell the House what advantages would accrue from our joining EFTA now as against joining them at a later period perhaps.
I think I have summed up pretty fairly what the Taoiseach said. I seem to remember him saying that he did not see any advantage in any individual, or unilateral, trade agreements for the time being. I take it the policy of the Government is to wait until the dust subsides to see what happens. I want to direct the Taoiseach's attention to several matters which indicate that this country should be up and doing, should be on the move the whole time rather than waiting on events to develop. Since last Tuesday week, after the collapse of the negotiations in Brussels when the door was closed by the French, the Taoiseach will see, if he reads the newspapers carefully, that the idea is developing in well-informed Press circles, be they in France, Germany, the United Kingdom, or anywhere else, that the negotiations are suspended not necessarily for a couple of months but in all probability for several years. In fact the general impression is that the negotiations, such as they were, are unlikely to be continued in the near future. No less a person than Mr. Heath, the British negotiator, expressed that opinion in an interview in the Daily Mail yesterday.
I interpreted the tone of the Taoiseach's speech to mean that the negotiations have fallen down, that they will pick up again, and the Government think they will soon start again. The attitude seems to be let us wait and see, and do nothing until the negotiations start again. That is wishful thinking. Like all such thinking, it is a mistake.
Mr. Macmillan went to Italy last week. A great many people believe he went to Italy—there was no secret about it—to try to establish a wider trade agreement between Italy and United Kingdom. It may well be that he was buoyed up with false hopes as a result of the general expression of disappointment in the Press at the failure of the negotiations. It may well be that the British negotiators, advised by their Foreign Office officials, who do not appear to be very up to date in their European outlook, believed that the measure of indignation in Europe was such that negotiations would start again in the near future, or the other five would force France to recommence negotiations, and, failing that, the five would themselves negotiate a separate agreement with the United Kingdom. Mr. Macmillan, on his return from Italy, having, as far as I can read the position, failed to secure a trade agreement, talked in a rather abstract way about the setting up of further negotiations by WEU. The Taoiseach will agree that WEU consists of the Six plus the United Kingdom. Does it not strike a note of caution in the mind of the Government when an important person like the British Prime Minister states that it is intended—it has possibly been considered—opening negotiations among seven nations? Ought not we to be on the qui vive? Ought we not to be up and doing, watching the situation very carefully?
It may be that as a result of what happened last Tuesday week we are much more privy now to what has been going on than we were earlier. I draw the Taoiseach's attention to the fact that in spite of the outcry in the Press and the suggestion that General de Gaulle was going to turn towards Spain and negotiate with that country, to create, perhaps, a Paris-Madrid Axis in association with the existing Bonn Treaty, the British President of the Board of Trade has invited the Minister for Industry in Spain to the United Kingdom for a fortnight to negotiate a trade agreement.
I mention these things to the Taoiseach. It may well be that we are negotiating a trade agreement with Spain. It may well be that we are negotiating a trade agreement with Italy. It may well be that we are fully cognisant of every move that our principal customer, the United Kingdom, is making. But we have no indication of that in this House. We have no indication that this Government is negotiating with anybody at all. I do not think I am unjust when I say that the Irish Government have somewhat misjudged the European situation. They have somewhat misjudged the outcome of the EEC negotiations. When I say that I am putting things mildly. I think it is also fair to say that the United Kingdom appear to have misjudged the situation as well. We have accepted hook, line and sinker every school of thought propounded by the negotiators in the United Kingdom, subject to the proviso that we were privy to what was going on. The Taoiseach has assured me on two occasions across the floor of this House that we were.
I should like to put this to the House: the French did not break up the negotiations for any reason other than the fact that they felt it economically expedient for them to do so. There are in the Six only two countries which export agriculture and whose economy is in great measure dependent upon agriculture. These are the Dutch and the French. The Dutch are very highly developed. They are very up-to-date agriculturalists. They export in considerable measure to the United Kingdom. The French are not so highly developed agriculturally, though 25 per cent. of their economy is bound up with agriculture and they are capable of considerable expansion, probably more so than their colleagues, the Dutch, by virtue of the fact that they are not so highly developed.
The French envisaged that the British deficiency payments, which are not helpful to an agricultural country and which agricultural exports assist to the extent of £340 million per annum, were detrimental to the interests of the French economy, and it does seem to me that the action they took was, from their point of view, a logical one. We may not agree with the manner in which the negotiations were ended, but we in this country are not in a position to state whether the French were correct or otherwise because we do not know. We were not present at the negotiations; we had no information except what seeped through from our embassies; but from the point of view I am putting here, the French action was logical.
I would accordingly ask the Taoiseach not to be deceived by the outcry in Europe by certain prominent men in the different countries of the Five, or by the somewhat wild statements in the Press in Britain and elsewhere, supposedly reflecting a great measure of indignation against France. We have to remember there is a large issue of domestic politics involved and I am citing these things to the House because I believe they are correct and that they may, in some way, assist the Taoiseach and the Government in whatever negotiations they will have.
The Dutch export a considerable volume of agricultural produce to the United Kingdom. They also export into the Six. Therefore, they were not so directly concerned in the deficiency payments as the French were. Secondly, the Dutch are at the moment in the throes of a general election. I am not certain whether it has begun, but if it has not, it is due to start at any moment. Therefore, there was bound to be a certain amount of domestic politics involved there. If their parliamentarians expressed opinions, those opinions may have been given purely for domestic political consumption rather than for the benefit of the overall European situation.
The Italians have elections in April. They have not got a very strong Government at the moment in that the Christian Democrats, who have been so long in office, no longer have an overall majority. Accordingly, many of the statements that may have been made in that quarter are probably made with an eye to the elections, which take place not later than April.
No one can suggest that the German political situation is very stable, and I would remind the Taoiseach, who has had recent close contacts with Germany—in fact, I think it was from Bonn he took the idea that we would be in the Common market by January, 1964—that the political situation there is most uncertain. It is now almost certain that the ancient Chancellor, Dr. Adenauer, who has done so much to bring about friendship between France and Germany, lack of which has caused two world wars, is due to go and there is a great deal of jockeying there for the position of his successor. The only public representative in Germany who has not expressed an opinion one way or another on the negotiations is Dr. Erhard and it is by no means certain that he will be the leader of the next German Government.
The French are the people who have taken a definite stand. As a Government, they are in a position to do so. They have the strongest Government the country has had in 20 years and they have recently had elections. Their leader, General de Gaulle, is firmly seated on the throne and is free to express any opinions he wants, with the full realisation that he speaks for the French people.
The Belgian Government is what the Taoiseach and Fianna Fáil have been decrying in sorrow and anger, a coalition and not a very strong coalition at that. There are three parties in Belgium, the Christian Democrats or Catholic party, the Socialists and the Liberals, all almost on a par with each other, the Catholic party being the biggest and in coalition with the Socialists. The Taoiseach, being such an expert on coalitions, will therefore realise they might not be a very strong Government.
We then come to the other people who have expressed opinions. Dr. Hallstein, a German, was formerly a member of the Government of that country but is now a civil servant. He is Chairman of the European Economic Commission, a body composed of civil servants with a certain amount of authority, but whose authority is entirely subject to parliamentary control. He expressed very guarded sentiments on the situation generally. Another member of the European Economic Commission is Dr. Mansholt, a Dutchman, and also formerly a member of his country's Government. In fact, he was Minister for Agriculture in Holland. He expressed somewhat more forceful opinions, the possible reason being that he is Vice-President of the European Economic Commission and Chairman of the Agricultural Commission which has been largely responsible for the breakdown of the negotiations. I do not suggest Dr. Mansholt himself was responsible for the breakdown, but the committee over which he presided dealt in full with all the negotiations.
I am giving these facts because I want to make it clear to the Taoiseach and his Government, because I do not think they have got their facts sufficiently clearly, that what happened the other day in Brussels was not merely a temporary suspension for a period of two or three weeks of these negotiations. And this brings me back to British external relations. Mr. Macmillan said when he came back from Rome that a further trade treaty would be discussed between the United Kingdom and Italy, to start in March, and the general consensus of opinion is, as the Taoiseach will have seen if he has been reading the newspapers, that these negotiations are dead for the time being.
That does not mean to say that the idea of a united Europe is completely dead and buried—I have little doubt it will come in the not too distant future—but it does mean that for the time being, these negotiations are unlikely to continue and that for that reason this Government must seriously take into consideration what they intend to do.
I now want to pose some very definite questions to the Taoiseach. I do not think these should be very embarrassing. I realise the difficulties with which he is faced and his extreme disappointment, probably, at the turn of events. I am surprised he did not know that events were turning that way; perhaps he was wrongly advised on those matters. We shall let it go at that. On the night when the negotiations collapsed in Brussels, the Taoiseach spoke in Dublin. I think he was addressing the Workers' Institute or some such organisation at a function at which quite a number of distinguished people were present. I read his speech carefully but it gave no information. It merely gave me a lead about asking for the information. He said that the Government, when the time came, would take prompt and decisive action.
In a long speech which the Taoiseach made here on Tuesday, he did not give us any indication of what those prompt and decisive actions were. At the time he spoke, he had probably just heard or read of the storm of indignation that had been aroused against France and was probably under the impression that the negotiations would re-open in the near future. Perhaps the Taoiseach now accepts the more general opinion that they are not likely to do so. Therefore it seems that the Government cannot afford to wait indefinitely, cannot afford to miss the bus while others are negotiating. Would the Taoiseach tell us in reply to this debate what are the prompt and decisive actions the Government will take? The Leader of the Government does not address an assembly, even though it is outside Dáil Éireann, at an important function and say he is going to take prompt and decisive action without having an idea of what those actions are.
Secondly, could we have further clarification on the subject of tariff reduction? I think I am correct in saying that we have already reduced our tariffs by 10 per cent. over a great many products commencing on 1st of January, 1963. The EFTA group, one of whom is a principal market, have been steadily reducing tariffs among themselves for the past couple of years vis-á-vis EEC. What is the suggested rate of our tariff reduction? I accept that the general opinion is that what will soon become the subject of negotiations is wider free trade agreements among all interested nations. Would the Taoiseach say what the rate of tariff reduction is to be? Is it 10 per cent. this year and 10 per cent. next year? In the event of negotiations re-commencing regarding the entry of countries to EEC, it would seem desirable that if we are to keep level and allow our application to stand we should be able to negotiate from a position of strength.
It is possible we may have a 12 months' interval before we have further negotiations, perhaps more. We must bear in mind that all other European countries that have made application are reducing their tariffs vis-á-vis the Common Market. That goes for all applicants for external association, Austria, Portugal, Switzerland and Sweden. Therefore, clarification on that point is desirable, if the Taoiseach feels he can provide it.
I have referred to the discussions going on between Spain and Italy and the United Kingdom. I cite only those two countries because they have been very much before the public eye in the past few days but I am satisfied these are not the only negotiations going on within the concept of a wider free trade area. Is the Taoiseach aware that of all negotiations in Europe, it has been the invariable custom for negotiations to take place at political or, rather, ministerial level? Has the Taoiseach considered the likelihood of Ireland having to start immediately to negotiate further agreements within this proposed free trade area? If so, has he appointed a negotiating team? Has he anybody in mind whom he proposes to send or does he consider it is sufficient for him to continue negotiating as all negotiations so far have been conducted, solely at ambassadorial or Civil Service level. The House would like to know the answer and I should like the Taoiseach to bear in mind when he takes a decision, whatever it is, that all negotiations in Europe do not take place at this level. The negotiations commence at high political level and the evidence of that is the two cases I have cited, two of many, that are taking place at the present.
There is a growing feeling in the country that the Government are prepared to follow closely in the footsteps of the United Kingdom. I am the first to accept that the major portion of our trade is with the United Kingdom, whether industrial or agricultural exports, but at the same time the Taoiseach in his opening speech here said that our position vis-á-vis the British market was not now as it was heretofore. I do not think it is likely to remain as it was because in the event of the United Kingdom negotiating trade agreements, as I feel certain she will—I mention her specifically so often because we are so vitally concerned in our economy with her agreements—as she wishes eventually to gain entry into EEC, she must certainly negotiate at the agricultural level. Most of the difficulties, in fact all the difficulties regarding the application of Britain for Common Market membership were agricultural and nothing else.
We should be in a position to know in this House what ideas for the future the Government have in relation to negotiations taking place. It is absolutely true to say that as far as the EEC negotiations went, our policy was to wait and see. We were waiting to see if Britain went in. I think that was a bad policy. We are a sovereign, independent State and the duty of the Government is to look after the interests of the people we represent. There were many negotiations we could have carried out. If I am wrong in that, let the Taoiseach deny it when replying. I believe there have been no direct negotiations with any country with regard to our Common Market application.
In conclusion, I feel there has been, to a certain extent, another factor responsible for the breakdown of negotiations. The idea behind the Eisenhower Administration and subsequently the Kennedy Administration is that in the situation emerging in the world to-day—which is quite a dangerous one—with so many new, emergent countries appearing it is extremely desirable that you should have a unification of economic forces so that in every possible way the old traditional centre of culture, Europe, should be in the strongest possible position to assist these countries by united effort, first, so that they would have sufficient to eat and, secondly, so that they should be allowed to build their economies and have stable government.
That was the policy of the Eisenhower Administration. Mr. Douglas Dillon, Under-Secretary of State, was sent to Europe to form the OECD as the successor to OEEC, which was freely accepted by all the member countries, and subsequently President Kennedy went further than that. He changed the long existing high tariff protective policy of the United States of America and started to liberalise with the further idea of extending to Europe and having Europe, with the United Kingdom in it, the United States and Canada as one strong economic force that could help the list of countries read out by Deputy McQuillan, the underdeveloped countries and the undeveloped countries.
One must applaud the idea behind that. It is absolutely essential for the freedom and stability of the world. The difficulty was that Europe is rather sensitive of her ancient heritage and cultural background and there is no doubt that a feeling had grown up in the European mind that their future was being dictated to them by the US, which they regard as a new country. There was also a feeling in the United Kingdom that they were being forced by the US to enter Europe. I think the Taoiseach will agree that there were many people in the United Kingdom who did not see their way to becoming a member of the EEC.
We all desire to see the preservation of what we hold sacred in this country: freedom, democracy and christianity. It is essential that we have a united force: first, on humane grounds, to feed those who want food because there are millions of people hungry in the world today; secondly to assist in the setting up of stable communities; and thirdly, to enable them to resist the enticements of the Communists which might induce them to accept that ideology and lose their freedom to the detriment of themselves and the free world.
I feel that things were rather rushed. Of course the ideal of a united Europe, with the United Kingdom as a member of the EEC, virtually leading to a United States of Europe seems for the moment to be not dead but, rather, let us say, dormant. I think the position was pushed too rapidly. A stage of development had not been reached in which such things were possible, but I believe that if the Governments in any of their negotiations keep that ideal still in view it will come. It may take four or five years, or it may be less before the full negotiations are opened again. I believe we will have the wider free trade agreement which is so essential.
From what I know of the European mind, and a certain amount of the American mind, I believe ultimately the ideals envisaged by President Kennedy and by President Eisenhower before him and those of the people who believe in the conservation of everything we hold sacred will eventually be realised. If we are to play our part we must bide our time in patience, but that does not mean I should like to see the Government sitting tight and doing nothing. I should like them to get on with the job. Anything they do to expand our trade, and any negotiations they undertake to further the interests of Ireland, I can assure the Taoiseach will have the full support of the fine Gael Party.
I see in this mornings papers that Deputy Dillon, the Leader of the Fine Gael Party, has a cold. I am sorry to learn this and I hope he recovers quickly. That may be the explanation—and, in all charity, I am prepared to assume it is—for the very inconsequential speech he made on Tuesday last. Unfortunately, some members of his Party took his speech as a headline and made similar irrelevant and sometimes irresponsible interventions in the discussions. However, not all the members of the Fine Gael Party took that bad example, I am glad to say, and we heard some serious and useful speeches from them, and also from members of the Labour Party.
On Tuesday, I gave a comprehensive statement of the position which has arisen in connection with developments in the EEC and on all the possibilities which may arise in the immediate or the more distant future. I endeavoured also to disclose the Government's thinking on the position and I did so in as frank a manner as was possible, keeping in mind that I and other members of the Government may be involved in important negotiations during the course of the year, and remembering that others as well as ourselves can read reports of Dáil debates.
I also indicated the decisions which the Government have already taken in the situation. There has been no change since Tuesday. In view of the speed at which events have been moving, that may be a matter for comment. However, Deputies who have read the newspaper reports yesterday and today will have noted that important European personages—men who because of their personalities and positions have power to influence the course of events—have indicated that they do not regard the question of Britain's membership of the EEC as finally disposed of. Developments of major importance in that connection may occur at any time, although I agree it is safer to base our own course of action on the assumption that they will not happen soon.
The so-called "Kennedy" round of negotiations for tariff reductions is expected to begin within GATT during March. It is not likely that they will be finished quickly and, indeed, previous experience of similar negotiations suggests that they may go on for several months. Mr. Herter, the US special representative dealing with this matter, said recently at a meeting of OECD that the US Trade Expansion Act to which I referred on Tuesday is not likely to be amended, so that the clause which permits the American Government to reduce tariffs by 50 per cent. in return for general reductions of a similar character by other countries, and particularly by the EEC, is likely to be the operative clause.
Developments in the political debate as to the future of European relations with the United States are likely to take place, within the Western European Union and possibly in NATO. We are not members of either organisation and do not wish to become involved in those debates. I do not agree with Deputy Cosgrave's suggestion that we should seek observer status in connection with those discussions or participate on any basis. Our prime concern is for our own national interest. It is of course in our national interest, as we see it, that European integration should proceed, based on the Treaty of Rome, and on the maintenance of the most harmonious relations and the most active co-operation in every important sphere between Europe and the United States of America.
During the course of the discussion on Tuesday, there were many references to association with the European Economic Community. In my statement on Tuesday, I quoted the clause of the Treaty of Rome which relates to association agreements and I indicated that it is of such a wide character that many forms of association could be contemplated. We have been put under notice that the only association agreement already made, that with Greece, is not to be taken as a pattern for any other country and that the EEC, through its Commission, has not yet developed—although it is working on it—what it terms the development of a philosophy of association.
Of course the main question in any association agreement we might make with the European Community is whether it would put us in or leave us out of the Customs Union. If we were inside it, then the common external tariff of the Community would have to be applied by us to British goods. That would disrupt our present trading arrangements with Britain. There have been indications of some very vague thinking by Deputies in this connection, because if we go that far, if we decide to make an association arrangement with the Community which puts us inside the Customs Union, which would disrupt our present trade arrangements with Britain, then we might as well go the whole hog and seek full membership, assuming it is open to us, and get the benefit of the agricultural arrangements and a voice in the formulation of the agricultural policy of the European Economic Community. If we are not thinking in terms of getting inside the Customs Union, then association with the EEC in present circumstances would not be of very great importance.
Some Deputies who spoke in relation to the political aspects of this question appear to be under the impression that by seeking to align ourselves with the European Community through association rather than full membership, we would avoid all political commitments and implications. That is another illusion because it has been made clear already by public statements of spokesmen of some Community countries that they regard the provision for association in the Treaty of Rome as only a device to take care of the temporary economic difficulties of some applicant countries and involving precisely the same commitments to its political aims as membership does.
Deputy Dr. Browne talked about associated membership. There is, of course, nothing of that kind and his persistence in talking about associated membership instead of an association agreement led, in large measure, to the confused thinking which he showed in his speech. All I can say about his speech is that it had very little relation to the facts as we know them.
The main possibilities of the future are, first a resumption of action on the British application for membership, involving subsequently a resumption of action on the applications made by Norway, Denmark and ourselves. The second possibility is that Britain may take up the question of an association agreement with the European Economic Community, either bilaterally or through the European Free Trade Association, or perhaps for the time being confine herself to seeking some commercial agreement with the European Economic Community. The third possibility is no change at all in the situation for a long time to come, no change, anyway, regarding the British position vis-á-vis the European Economic Community, and that activity in the immediate future will be transferred to the GATT for negotiations on world-wide tariff reductions, on the initiative of the United States.
Deputy Cosgrave queried the wisdom of persisting unilaterally with tariff reductions. What are the considerations which, in the view of the Government, make that a good policy? First of all, we have got to keep up here the pressures towards maximum efficiency in our economy which we were building up in anticipation of our membership of the EEC. The future conditions of world trade will not give us—this is one thing which can be accepted as a certainty—the opportunity of export outlets while retaining for ourselves the freedom to preserve our high tariffs. Our freedom of action in future trade negotiations, whether carried on bilaterally with particular countries or in conjunction with the development of any multilateral agreement, will increase in direct proportion to the competitiveness of our economic activities.
If the possibilities facing us are those I have mentioned, membership on the basis of our application to EEC, a collective agreement involving something like the old European Free Trade Area arrangement, resulting from negotiations between the EEC and the European Free Trade Association, or an agreement for association with the Community following upon a British movement in that direction, or wider agreements negotiated through the GATT including the U.S.A., involving tariff reductions, we have got to take these facts into account: under the first of these possibilities, membership of the EEC, we cannot and will not get a longer transitional period than the Treaty of Rome provides.
We must be prepared to accept full obligations of membership and the consequences of unrestricted free trade by 1970. In any of the other possibilities, either a free trade area type of agreement resulting from collective negotiations between EEC and EFTA, or a bilateral agreement for association, we have no guarantee that there will be any transitional period at all, so that we would have to face the possibility of being presented with the prospect of participating in these arrangements only on the basis of coming into tariff reductions at the stage which the other countries have already reached.
That would present us with a very critical choice, as I have said on earlier occasions, but there is no possibility facing us in this situation which does not indicate the need to keep up the momentum of our tariff reductions. By doing it, assuming that we do it by our own unilateral decision, we can at least give ourselves the benefit of the arrangements we hoped to negotiate with the European Economic Community, that is to say, automatic reductions in respect of the general range of tariffs with exceptions for those viable industries which are making a genuine attempt to improve their efficiency and to get into a position in which they could meet free trade, but which required a longer period to complete adjustments.
When I talk about measures taken here to improve the efficiency of the national economy, I include amongst them the measures directed towards the problems, which must of course be solved, which in time may arise from possible redundancy in some industries, by reason of their adopting more efficient production methods before they can expand their export sales.
Agricultural centres.
I would not like to get into that question because it is too far-reaching. It is quite clear that if we succeed in building up a pattern of farming in this country based upon farms of 40 to 50 acres then there will be fewer farm owners. But the intensification of farming methods would increase the numbers occupied in farming. Deputy Cosgrave raised the question of our trade agreements with countries now included amongst the Six. We, of course, have agreements with the principal countries concerned. Arrangements have been made with France and Germany respecting specific commodities. I do not know what Deputy Esmonde is complaining about. They were all published to the Dáil and are to be found in the Library. These agreements will develop in accordance with the policy of the European Economic Community. Eventually the European Economic Community will have a common commercial policy so that, if we are not a member of or associated with it through an agreement then, presumably, we will have to conduct our trade on the basis of a collective agreement with the whole Six.
Is the Taoiseach satisfied that our existing trade agreements are strong enough?
We are never satisfied with our trade agreements and Deputies should not ask me to say so. We have improved our trade agreements with France and Germany but we would like to have them better. Deputy McQuillan referred to a report in this morning's papers. Deputy McQuillan naturally seizes with joy on any description which was disparaging and damaging to the country. I am not sure what this report contains. I have not seen it myself. According to one paper we are described as less developed and to another as underdeveloped. Of course, Deputy McQuillan adopted the still more objectionable term "undeveloped".
I think in some other report we were excluded from it.
What I want to say is that this body, whatever it is, a working group set up by the United Nations headquarters in New York, made no inquiries in Ireland nor had any contact with any Department of the Government and had no communication, so far as we know, with anybody in this country. They did not in fact know what they were talking about. We are less developed industrially than Britain, France and Germany. We know that and we did not require any body of alleged experts to tell us that. "Underdeveloped" is a phrase frequently used in international discussions in recent years and it is a way of describing a country's infrastructure, that is to say its development in the fields of power, transport, communications, the state of its roads, railways, harbours and airports, the development of its telephone services, banking organisation, trade union organisation and so forth. To describe Ireland as underdeveloped in that sense is just nonsense. If that is what this United Nations body has done, it justifies my statement that they did not know what they were talking about.
I assume there will be a protest.
I certainly express my resentment that any United Nations body should publish a damaging report of that character—if that has happened—without reference or notification to the Government here. I would regard it not merely as discourtesy in the extreme but highly irresponsible.
There is another matter I want to deal with which Deputy Dillon mentioned in the course of his speech yesterday. It is not the first time he has endeavoured to suggest that, because we have a gap between our imports and exports, a deficit of visible trade amounting to £100 million, without any diminution in the external reserves of the banking system, the explanation is that money is being brought in by foreigners on that scale to buy Irish land. That is such utter nonsense that only Deputy Dillon could give expression to it.
What is the explanation?
The explanation is obvious and would be clear to anybody who took any trouble to seek it. First of all, let me make it clear that the deficit on our external payments in 1962 is estimated to be somewhere between £10 million and £15 million. Nobody knows yet how the actual deficit will work out. This gap in our visible trade is not of great importance. What is of importance is the extent to which our total incomings were less than our total outgoings. In relation to the volume of transactions involved, this gap is not of very great consequence.
For the Government loans issued last year, some £3,500,000 was invested by people outside Ireland which is an indication of their confidence in the economic future of the country and in the financial policy of the Government.
Apparently the local people had not.
If the Deputy tries to learn, he may do so. I cannot do more than give him the material. That is not hot money in any sense of the term, as Deputy Dillon was trying to convey. It is a permanent investment voluntarily made from outside this country in the securities issued by the Irish Government, presumably because they were considered to be more secure or to give a better return than other securities offered by other Governments at that time. There has been quite a considerable external investment in industrial development and during last year in mineral development in this country. No precise figures can be given for that but it is common knowledge—an exact calculation is not required.
There was last year a considerable re-valuation upwards of the external assets of the banks due to the fall in interest rates generally. All these factors would be more than sufficient to account for the maintenance and the expansion of the external assets of the banking system. We are not trying to build up these external reserves. I have tried to explain that time and again. Their level is adequate to our trading requirements. The aim is to ensure that, arising from the savings generated here or from the willingness of people abroad to invest here, resources will be available and used for economic development and not for the building up of external reserves.
The Taoiseach rejects that it is a standing army.
This suggestion that the £100 million gap in our visible trade represents an inflow of money to buy land by foreigners is so nonsensical that it is hardly worth taking seriously. In fact the total expenditure on the purchase of agricultural land by people outside Ireland during the past 18 months—that would include in some cases Irish people who had acquired American nationality and who were coming back to resume their life in Ireland—and I mean the total expenditure including the 25 per cent. tax they had to pay, was not much more than £500,000.
Deputy Dillon asked for three things: hot money——
There was no hot money.
He asked a question about hot money, the purchase of land——
That is about £500,000.
——and the amount coming in from industrialists outside. He asked——
He did not ask me anything. He made an assertion.
The Taoiseach might be allowed to make his statement.
However, the poor man has a cold. I will wait until he is back to health to deal with him.
There is one final matter I want to deal with. Deputy Corish referred here —and we had some words across the floor of the House—to the importance of improving productivity generally, as a base for higher incomes and higher living standards for our people. I and my colleagues have come to the conclusion that there is an obligation on us to make our views on that question known generally, to set out the conclusions we have reached as to the developments that have already taken place and as to what possible developments in the future may mean in improving or disimproving the prospects of expanding employment and improving living conditions in this country. We have decided to put these views in a White Paper which will deal with this question of the relationship between incomes and output and the whole question of national policy in that regard.
If the Minister for Transport and Power does not have a hand in it, it will be all right.
It will be published tomorrow and I hope the Deputy will study it. We regard it as important that there should be the widest understanding not merely amongst members of the House but amongst all members of the community as to the essential requirements of a policy designed to promote economic growth and also understanding of the serious consequences that would follow from any departure over a protracted period of time from these essential requirements of a good policy. I am sure, in the circumstances that the considered views of the Government are about to be made available in that form, Deputy Corish will not ask me further to deal with that point now.
My remarks arose out of those of the Minister for Transport and Power. He may not have meant what he said but he certainly couched it in very strange language, so far as the workers are concerned.
This White Paper takes the bad taste out of it.
The Taoiseach indicated the Government had decided to dismantle tariffs in accordance with what he has stated and with the suggestions made to EEC when he applied for membership. He also speculated on our position vis-à-vis other countries and groups of countries and, incidentally, said that the lowering of tariffs might have to be stepped up or to be more severe than proposed. Would it, therefore, be right to take it that the minimum requirements of the Government for industry in this country in respect of the lowering of tariffs would be as announced and proposed by the Taoiseach to EEC?
We have to consider two possibilities. One is that we will be reducing our tariffs under the compulsion of some international agreement. If that international agreement is one for membership of EEC, then we know it will involve a rhythm of reduction which would lead to their complete disappearance by 1st January, 1970. If it is not an agreement for membership of EEC, it will be some agreement which has not been negotiated yet and about which we have no knowledge but it could possibly involve an even more rapid dismantlement or certainly a larger initial reduction than we contemplated in connection with EEC membership.
If we go ahead without any agreement, and solely by reason of our own decision based upon our conception of our interests, I do not suggest we should commit ourselves at this stage to going beyond a one-third reduction and certainly, after that, there would need to be an examination of individual industries to understand their position. I contemplate, although we have not yet taken a firm decision on this, the possibility of setting up some form of reviewing authority which would carry out these examinations and determine in each case what the appropriate rhythm would be so that all concerned with those industries would know, so far as it would be possible to state in advance, their tariff position.
That is fair enough. I know the Taoiseach would not want a slackening off in the efforts he has asked for in industry. However, there is a possibility, in respect of some industries only, that the dismantling of tariffs might be less severe in different circumstances.
I proceed on the assumption that it is the most efficient industries that will be first in to avail of the aids and grants that the Government are offering. I do not want to say anything which will encourage the less efficient industries to hang back in the expectation that they will be spared, by reason of their delay, the tasks of re-organisation upon which they should be embarking during this period.
That is clear.
I presume the motion to adjourn is withdrawn?
Deputies who have Questions on the Order Paper expect them to be taken at 2.30 p.m. I suggest the House recess now until 2.30 p.m. and adjourn after Questions.
Motion, by leave, withdrawn.
Sitting suspended at 2.5 p.m. and resumed at 2.30 p.m.