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Dáil Éireann debate -
Tuesday, 28 May 1963

Vol. 203 No. 2

Committee on Finance. - Control of Imports (Amendment) Bill, 1963—Second and Subsequent Stages.

I move that the Bill be now read a Second Time. Deputies will recall the announcement made in January last of the decision to remove quantitative restrictions on imports as soon as possible and, in any event, not later than the 30th June next. This decision was taken as a consequence of Ireland's application for membership of the European Economic Community, since quantitative restrictions would have to be removed at once on entry into the Common Market, so far as the goods of EEC countries are concerned.

Even as a member of the European Economic Community, however, it would still be possible for us to maintain such restrictions against goods coming from certain countries outside the Common Market, subject to the obligations of the Rome Treaty in regard to common commercial policy. The Control of Imports Acts are not suitable as they stand for the operation of quotas on such a selective basis and, since it was considered necessary to be in a position to maintain quantitative restrictions on the entry of goods coming from particular countries e.g. those which are low-cost producers, while removing them from the goods of other countries, steps were taken, subsequent to the decision announced in January, to prepare legislation amending these Acts so as to enable this to be done.

In view of the change which has taken place in the circumstances in which this country applied for membership of the European Economic Community, it has been decided to proceed more slowly with the removal of quotas and to retain most of them for the time being. In certain cases, however, where it is judged that the industries concerned can be adequately protected by tariffs, it has been decided to carry out the original decision and to remove the quotas as from the 30th June next. It may be necessary, however, to dismantle these quotas on a selective basis should there be a danger to the Irish industry of severe competition from low-cost countries and for this reason it is necessary to proceed with the legislation amending the Acts.

Let me refer now to the particular commodities involved. An Order providing for the revocation of the quota on rubber-proofed garments has been made and will become effective in the course of a couple of days. No difficulty arises about possible imports from low cost countries so the removal of the quota will be absolute. In the case of cycle tyres, imports from low cost countries will have to be guarded against. It is proposed, then, that the revocation of these quota restrictions will apply only to OECD countries. This legislation will enable us to maintain the quota against low cost countries whose exports to this country would affect the home industry.

As far as rubber footwear is concerned, the House is aware that there is at present a review of the leather footwear quota before the Industrial Development Authority. The intention was to eliminate the quota on leather footwear at the end of June this year but since it will not be possible now to have the review on leather footwear completed it was thought better to delay the removal of the rubber footwear quota until the decision of the Industrial Development Authority on the leather footwear quota is made known. In the meantime, the rubber footwear quota is being continued up to the end of this year—in other words for a further six months from the end of June, but the size of the quota has been doubled in agreement with the Irish Dunlop Company.

The quota on a number of commodities is being increased by 10 per cent. They are motor tyres; silk or artificial hose; cotton piece goods; hats; lamps; miscellaneous brushes; plugs; laminated springs; wood screws; superphosphates.

As I have said, the leather footwear quota is being reviewed at the present time. There are also negotiations in connection with the woollen piece goods quota.

I have given an outline of what is happening in relation to quotas which I hope will clear up any misunderstandings there might be. I may say that these orders will be operative within a week or so.

This is a very brief measure from which may flow considerable consequences if it is implemented fully. The Minister has said that it is proposed to proceed with somewhat more caution than was originally anticipated when our application for EEC membership was still under consideration; that in view of the breakdown of the Brussels negotiations it was the intention now to proceed more slowly.

It is necessary to examine with considerable care the possible consequences that some of these quotas may have. I do not propose at this stage to cite the figures which have been quoted here on a number of occasions recently and which are available in the Official Report in the form of replies to Parliamentary Questions concerning trade between this country and a number of European countries, some with our trade with answered in various forms. Some of them deal with our trade with EFTA countries, some with our trade with the EEC and some with our trade with OECD countries. I note from the Minister's remarks introducing the Bill that it is proposed at present to apply these quotas only to OECD countries. That description includes some countries that are also members of EFTA and some countries that are also members of the EEC.

The reason why I suggest it is necessary to proceed with caution appears obvious from a brief glance at the figures for our trade with, for instance, EFTA countries. I shall give the figures for the year 1961. The completed figures were not available for 1962 but the January-November figures indicate a pattern similar to the 1961 pattern. For the year 1961 the percentage of exports to imports between this country and Denmark was 12.7 per cent. In the case of Norway it was 45.6, which was somewhat better; in the case of Austria, 16.9 per cent; Sweden, 21 per cent; Switzerland, 18 per cent and Portugal 25 per cent. The pattern for the period January-November, 1962 was 7.1 per cent; Norway, 26.8 per cent; Austria, 20.3 per cent; Sweden, 13 per cent; Switzerland, 16 per cent and Portugal, 9.9 per cent.

The trading figures in respect of the continental countries with which we have trade agreements—and some of these are included in the EFTA figures—show that in most cases we import from them about three times what we export to them. In some cases the figures vary somewhat but, on average, we import anything from three to four times what we sell to them. It is for that reason that we should proceed with considerable caution before wiping out the existing quota or tariff protection.

As I understand from the Minister's speech, it is proposed in most cases to substitute tariffs for quotas. As the Minister said in his reply to the debate on the Estimate, it is likely that the effect of the reduction in tariffs will be felt at a later rather than the initial stage. That is undoubtedly true. On the other hand, in the case of certain types of goods, a marginal change can have a considerable effect and there would need to be very considerable compensatory advantage in lower prices before we could be satisfied as to the possible consequences on employment.

I have already heard some complaints about the effect of the reduction in the case of certain silk goods. Industries vary and the competition which this country is likely to face in respect of certain categories of goods varies from one type of manufacture to another but in view of the existing uncertainty about the EEC developments and the unlikelihood of membership becoming a reality in the near future and the fact that these other countries at present enjoy very substantial trade advantages so far as this country is concerned, we ought to proceed with very considerable care.

The list which the Minister has read out covers a very considerable range of industries—motor tyres, leather footwear, silk hose, laminated springs, superphosphates, wood screws and cotton piece goods—affect industries which are very considerable employers and some of which may be the sole suppliers of the goods produced. The effect upon particular industries of a reduction, particularly of the initial ten per cent reduction, may not be great but, on the other hand, some industries may feel it immediately. Anything that would jeopardise their trading ability or interfere with the existing level of employment should be most carefully examined before being decided upon because all industries will be facing keen competition in trying to develop export markets.

All of us are, I think, familiar with industries which, even though enjoying protection, find it difficult to compete with countries where the raw materials are available at lower prices. I am thinking particularly now of laminated springs. This change is, at present, confined to OECD countries and we may not, therefore, be faced with the very acute competition likely to come from low cost countries. On the other hand, some of the OECD countries have available to them certain commodities at cheaper prices and can, therefore, enjoy lower costs of production. In certain circumstances, they even have cheaper labour. In most cases they have the advantages of readily available raw materials. For these reasons, I believe we should proceed with care not only in substituting quotas by tariffs but also in reducing tariffs where they apply. It is not easy to see what quid pro quo can be granted. It is worth considering having discussions with the EEC authorities or the EFTA authorities to see if some modus vivendi could be worked out under which credit would be given for any reduction that might be granted.

I should be interested to hear from the Minister whether it is proposed to take any action against countries with which we have trade agreements where the balance of trade is heavily adverse. Will any effort be made to get the pattern corrected and ensure that these countries are affording to this country, its traders and manufacturers, the full rights under the agreements? We had one or two instances in the past in which administrative or other action was taken to defeat the actual terms of an agreement. It is only right to say that in such cases the country concerned on the receipt of representations, and sometimes vigorous representations, agreed to admit the particular commodities. One is never sure, however, that these agreements are being respected in the letter as well as in the spirit. Because of that I believe the pattern of our trading with these continental countries requires careful examination and consideration, particularly in the light of the present uncertainly with regard to our future trading position.

This is an unpretentious Bill but it has in it the ingredients of what could be quite serious developments. Power is taken here to exempt countries from quotas and tariffs, even where quotas are at present in operation. The Minister gives a list of industries in respect of which it is proposed to increase the quotas in the near future. That means more of these quota goods will be coming in. Everybody with experience knows that, if one cannot prohibit the import of a particular commodity in order to assist an Irish industry, the next thing is to impose a quota thereby ensuring that the Irish product can be sold. It is only when the product is sold that goods from outside are permitted in in order to fill the market. An industry may supply 80 per cent of the home market. A quota is granted for the import of 20 per cent, and no more.

Now, because of the possibility of our entering EEC, we may find ourselves faced with the problem of dismantling not only tariffs but quotas as well. We will thereby subject a number of our industries to excruciating competition and anybody who does not believe that is incapable of appraising the competitive spirit of modern Europe. The soundest policy for us is to hasten very slowly because a too rapid repeal of quotas will be tantamount to erecting headstones over the graves of Irish Industries. Some of those quoted by the Minister cannot possibly survive in EEC. These highly-developed European countries are quite capable of supplying the entire market here for the 52 weeks of the year on a couple of weeks' production. When the battle is fought, a number of Irish industries will be lying dead on the battlefield. There are some which will survive, but there will be casualties too, particularly in those areas where industries provide a substantial measure of employment at perhaps a high cost to the whole nation. I do not think we should be in any great hurry to reduce quotas and tariffs. As far as Britain is concerned, joining EEC is just a big question mark and it is scarcely wise for us to fix a date by which we will adhere to the EEC.

We have nothing to apologise for so far as our trading with other countries is concerned. Speaking on the EEC debate here in February last I gave certain figures. They will bear repetition now in briefer form. I showed then that we bought from these EEC countries approximately £40 million worth of goods and we sold to them only £8 million worth of goods—for every £5 worth that we bought from them they bought only £1 worth from us. So long as that is our relationship with these countries I do not think we need be in any hurry to take any particular action in the way of reducing our quotas and cutting our tariffs, even from the point of view of external relations, good neighbour relations, or any other substantial reason. At all events, if we are not given some immediate compensation for what we are doing we ought at least to be told what we shall get when we reach a certain stage. So far we have reduced tariffs, increased quotas and we intend to reduce tariffs again in January and to increase quotas next week.

What are we getting for all this at the moment? It may very well be this is a method of creating a climate and an atmosphere in which some manna will fall our way at a later date but I should like to be sure of that. If we look at the pattern of our trade with Europe we shall see it is not getting better. It is getting very much worse. I quote again from what I said on that occasion at column 960, Volume 199, of the Official Report of the 5th February, 1963.

In 1957, Belgium bought from us 43 per cent of what we bought from her; today she buys 17 per cent. France bought, in 1957, 60 per cent of what we bought from her; today she buys only 18 per cent. Germany bought 47 per cent in 1957; today she buys 27 per cent. The Netherlands bought 22 per cent in 1957. Today it is 21 per cent. Italy, in 1957, bought 64 per cent, today she buys 33 per cent. Luxembourg bought nothing from us in 1957. We buy from her today over £300,000 worth of goods; she buys from us £700 worth.

Therefore, as regards these countries we provide a very substantial market for them and export relatively small quantities to them in compensation. If we look at the EFTA countries, that is excluding Britain, which is one of the Outer Seven, we find the position is relatively as bad as that in regard to the European Economic Community. We buy £9 million worth of goods from those six EFTA countries and they buy from us only £2 million worth of goods. Here again we happen to provide a very good market for these countries while our market in these countries is relatively small. The pattern is strictly against us. In 1957 Denmark bought from us six per cent of what we bought from her; today she buys seven per cent. Norway bought 13 per cent in 1957; today she buys 26 per cent. Sweden bought 20 per cent in 1957; today she buys 13 per cent. Portugal bought 57 per cent in 1957; today she buys nine per cent.

Therefore, there is nothing that compels us to repeal our tariffs or dismantle our quotas in order to show these countries that we have provided a very substantial market for them. I am sure the Minister has these facts in his Department and in regard to some of our industries he will know, as will some of the survey teams, that it will be extremely difficult, if not impossible, for these people to exist in a market in which their continued existence is not provided for by a quota. The day may come when these things will have to be done but it will be a very painful exercise for the Irish industries concerned. The Minister would be wise in making haste very slowly and then only if we can see something tangible within our reach by doing so.

I should like also to raise the other aspect of imports, exports, and quotas. It is quite clear that some of the countries from which we buy goods in substantial quantities are buying only a small quantity of goods from us and we can do two things: we can let them carry on and say: As long as we are able to pay for them it does not matter. We pay for them, of course, only by being able to exploit our tourist industry. We pay for them by utilising our external investments and we pay for them with the help of the Irish boys and girls who send money home to their parents or who come home on holidays each year and spend their money here. In the long run that is how we are able to keep our trade with these countries going. It is possible because of our size and because of the limited degree of our industrial investment that there is no effective course open to us but I have never believed that we were wholly powerless.

It may be said against that that if we are thinking of going into the European Economic Community we must forget our weapons and go in there with a lofty adherence to high ideals and pledging ourselves in advance to co-operate to the fullest in the promotion of trading relations. However, until we do go in, and even when we are in, some serious effort should be made to bring the countries of the Six up against the reality that in the aggregate we are buying £40 million worth of goods from them and they are buying only £8 million worth of goods from us. If that lopsided state of affairs continues there is not much prospect for our prosperity in the European Economic Community or indeed outside it.

Before I read this Bill I thought it was an effort by the Government to put into operation what had been threatened, that we would have to consider whether we would permit the continuance of the arrangements under which we bought £5 worth of goods from countries which bought only £1 worth from us. I am not saying that in this matter the Minister can act the Goliath with these large and highly-organised countries in Europe but he is not defenceless in this job and until such time as we are members of the European Economic Community we should try to get a better state of balance into our exports to Europe than exists today.

In all this, one thing stands out, that is, that the British market is by far the best market for us. The statistics which I could quote from the same speech show that there is a much closer approximation to a balance between our exports to Britain and our imports from Britain. Unless we have that stable influence in our external trading relations, our whole economy will be lopsided and there will be no viable economic structure whatever. It is that very fact which dictates to us out of sheer self-interest that we should keep an eye on British moves in relation to both the Common Market and EFTA countries because any examination of the trade figures of this country makes it perfectly clear that the one country with which we can trade on some sort of rewarding basis is Britain. Our trade with the other countries of EFTA and EEC is onesided and operates very considerably to our detriment.

The lowering of tariffs and the increasing of import quotas is necessarily a very painful process. My uneasiness about the whole pattern of what is taking place here continues. I take it there has been—if not, there should be—complete consultation with home producers on the matter of quota increases. I take it that an increase of ten per cent, for instance, in the quota of imports can be absorbed without any reduction in the capacity of our producers. If, hitherto, we had an import quota of 50,000 pairs of a certain kind of shoe or boot and if we increased that figure to 55,000, are we taking those 55,000 pieces of manufacture off the benches and out of the hands of employees in our factories?

I should like the Minister to deal with the way in which the proportion of these quotas is allotted to importers. I am not clear about what is being done. I hope it is being done in a manner fair to importers and that the proportion of quotas is allotted to the countries to which we export. The countries which get these quotas from us should get them in relation to our present trading figures with them, the figures Deputy Norton has quoted and of which we have all been made aware in recent months. They show this silly disparity in our trade figures. A great disparity should be a factor in the decisions we make about allotting import quotas to countries who trade with us on a more favourable balance of trade than some of the European countries do.

It is all part of a pattern of reversing a 30-year-old policy of high protection here. I do not think it will be as invigorating a process as the Minister suggested it might be in his speech on his Estimate. An increase in the flow of imports in any way carries grave danger, I believe, to both employment and investment here. We have feather-bedded industry for 30 years and I do not think we can decide to sleep on the floor too quickly. I believe we are doing it far too quickly for our economic comfort and I agree with the two previous speakers that exhortions to go slow should be heeded by all of us in this matter. We should curb enthusiasm for what I think would prove an illusory feeling that we would get efficiency overnight by plunging manufacturers, industrialists and workers into the cold water of the facts of international trade. It seems curious to me that the Fine Gael Party of which I am a member should now seem to be champions of industry but I think we have always been champions of reasonableness in everything and if we thought you went too fast in 1933, possibly we think you are going too fast now.

I want to underline some of the representations made by Deputy Cosgrave in dealing with this Bill. He spoke of the impact of the consequential steps which were in contemplation in connection with the Bill on the labour content of industry. I often think when I sit here and listen to the Minister for Industry and Commerce producing legislation of this kind, what the Fianna Fáil position would be if we were in their place and they over here. I can imagine the screams of hysteria that would be heard from these benches and the charges that we were betraying the industrial interests of the country. I am proud of the fact that that kind of hysterical fraud does not characterise this discussion.

I make no apology for recalling to the mind of the House the fact that we are members of OECD and that one of the obligations of membership is to progress steadily towards the abolition of quotas. Is not that true? We are bound to proceed deliberately to that end and, where it is desired to retain protection, to substitute for quota appropriate rates of duty. We have the choice of cutting ourselves off altogether from external contact with Europe, the US and Canada and "going it" utterly alone or else collaborating with them in OECD and other international organisations which are becoming more and more a fact of international life and, outside of which, I believe our circumstances would become well nigh intolerable.

There should be no sentiment in dealing with matters of this kind but there should be prudence. I recognise at once that progress, slow or rapid, towards the disappearance of quotas is bound to create problems for our industrialists but I am also aware that very considerable help has been provided by this House for industrialists to adapt themselves to the new climate in which we must operate. I want to say again what I have said here repeatedly and what I went out of my way to say at our Ard Fheis in the Mansion House recently and what I have heard Deputy Cosgrave and other members of his Party refer to repeatedly: we do not seem to be sufficiently preoccupied with the problems of the people who are working in these industries. I sympathise with the man who has a substantial capital investment in the country but I am conscious of the fact, having been in business all my life myself, that you have an obligation if you are running a business on rational lines, of accumulating from your profits reserves adequate to meet any foreseeable contingency. Indeed, you ought to have supplementary reserves to meet the unforeseeable contingency. If we add to that the adaptation grants and other devices, difficult as some industrialists may find the process of adaptation, they are not without resources and anyone who pleads he is absolutely without resources is, I think, open to question as to whether he has himself taken reasonable precautions.

Take the case of a man who at 23 or 24 years of age had the option in 1933, 1934 or 1935 of going to England or to America or of taking a job in a new industry established here with Government patronage and the extremist type of quota tariff protection. He said to himself: "This is a new departure. The Government guarantee they are going to give whatever protection is necessary to ensure this industry will survive." He took a chance and took a job. He trained himself in that industry and in due course got married. He bought a house and his children are now going to school. He has a wife and family and maybe payments are outstanding on his house. Suddenly he is confronted with the situation that it is not impossible that the industry in which he has invested not his capital but his whole life is going to close down.

I remember a specific case of which I had personal experience. I remember a man who was in just that case. He had spent approximately 30 years in an industry in this city and had reached a very responsible position in it. He was not a director but he was a principal foreman. He was very comfortably circumstanced. He was a hardworking, industrious man, most highly thought of. In this case the family owning the business died out. The employer was an elderly man, and when he died his executors simply wound up the business.

I shall never forget the despairing prospect with which that man was faced through no fault of his own. He would have most gladly taken any work, but the difficulty was he had attained to a position of responsibility and distinction in his particular industry, which was a small industry of which there are only four or five units in the city. To get that man a job in the lower ranks of experience in that industry was virtually impossible, because men who were 10 or 15 years younger than he and who had attained to supervisory capacity naturally recoiled from seeing a man who was their senior in experience being brought in under them. This man was, therefore, out of a job and was suddenly brought smack up against a problem of a man with family responsibilities who has attained a time in life where it is hard to get a job no matter how willing or eager he is to take it. He suddenly finds his employment folding up under him.

What I am anxious about is this. There is no use closing our eyes to the fact that with the disappearance of quota protection there is a certain number of industries here whose survival is highly problematical. As Deputy Norton said, without particularising I can think of certain commodities where the large mechanised industries in Europe and Great Britain could supply our entire requirements in one day. What are we saying now to the individual workers in these industries by way of reassurance, if they find that the employment in which they have spent their lives and invested the only capital they have, which is their life, spent in acquiring experience and expertise? What are we saying to them if they are faced with the prospect of the industry in which they have worked closing up?

The Minister ought to address his mind to this problem and take an early opportunity of saying that our resources will be mobilised and that we will regard as a first charge upon them two obligations to persons who find themselves in that circumstance. First, that we will seek, where their age is such that entry into a new industry is virtually impossible for them, that superannuation on reasonable terms will be provided to ensure that they will not be thrown on the industrial scrapheap. Secondly, we ought to say, boldly and resolutely, in regard to others of middle-age and below middle-age that we will devise a re-training scheme, access to which will be available to them all, to retrain themselves for alternative employment, that we will concern ourselves to get them settled in alternative employment, and that during the period of re-training we will provide them with an income to make it possible for them to keep their families together and to avoid a complete disruption of their lives.

I believe we ought to have the moral courage to say to the employees of such industries whose survival is highly problematical in the completely free trade era, particularly to the younger man: "Listen, you ought to look around now for alternative employment in an analogous trade so as to avoid becoming unnecessarily a social problem in five or ten years' time when it might be very much more difficult for you to make the necessary adaptation in spite of any help the community can provide for you."

These things are to be faced. If they are not faced, it will gradually dawn on a great many trade unionists here that this kind of danger is looming up. You will be liable to get a very acute reaction, which perhaps will on occasion appear to be irrational and extreme. But then you pause and think that a man with a wife and family to provide for finds it extremely difficult to concentrate his attention on the wider economic interests of the country as a whole if it involves his utter ruin. You cannot expect him to be as calm and as deliberate as we here who are trying to look at the thing from an overall viewpoint. I urge the Minister to turn his mind to that aspect of the situation, in the certain knowledge that any proposal he has to put forward will be most sympathetically received in this House, if we are to provide a real solution to the inevitable problem that will arise.

I heard a good deal of talk about a kind of nostalgic yearning for the preservation of highly protective tariffs here no matter what happens in the world outside. This is an illusion, because the industries that have a prospect of expanding employment and have a dynamic future are the industries that have passed the point of depending on the domestic market exclusively. I do not think there is anything truer in business or trade than this: nobody ever stands still. You either expand or you decline. No business long stands still. The firms which are depending for their dynamic on expanding production are the firms who are exporting a part of their output. And what will those firms find, whether they like it or not and whether we like it or not, in 1966?

The EFTA countries are pledged to abolish all tariffs and all quotas. One of the EFTA countries is Great Britain, and we will find ourselves in competition in Great Britain in 1966 with her partners in EFTA on the basis of free trade. Not only that, but President Kennedy is pressing very strenuously for an across the board reduction of all existing tariffs by 50 per cent in the immediate future. As the Minister has said, Britain is preparing very hard, with her EFTA partners, to get into the Common Market, which presupposes a complete disappearance of any tariffs, of any protective device, in Europe by 1970.

That is a world for which we must adapt ourselves. We had better ask ourselves whether all this is unqualifiedly black. I do not think it is. In the first place, I do not believe that the Grand Design adumbrated by President Kennedy at Philadelphia on 4th July last year will disappear into smoke. If I did I would substantially despair for the survival of free society. If I had to accept that prospect I would not give a fiddle-de-dee, I would not give a damn for our chances, because then Mr. Khrushchev and Mr. Mao Tse Tung would be calling the tune. I believe that unless the Grand Design of the Atlantic Partnership is implemented then Mao and Khrushchev and their subscribers will call the tune. I do not believe that they will call the tune. I believe the Atlantic Partnership will become a fait accompli, despite the work of some Europeans to stop it. If it is illuminated altogether——

Illuminated?

That is what the Deputy said.

I said that.

I stressed that to make sure that it was understood.

I said "illuminated" and I endorse the emphasis the Minister casts on the verb "illuminate". I want to recall that these developments leading to an Atlantic Partnership may take time as a result of the lack of illumination which at present afflicts certain quarters in Europe. We have got to live in the meantime. Deputy Norton has drawn attention to the obvious discrepancies that exist in the balance of trade between Ireland and certain other countries in Europe. That is a problem not peculiar to Ireland. It is a problem occupying the minds of economists in Europe with growing emphasis. It is this: there is a woeful tendency, which manifestly must be controlled if disaster is not to ensue, for the rich to grow richer while the poor grow poorer. There is a queer and almost uncontrollable dynamic operating in which the highly developed countries trade more and more with one another and with an increased gross national product, while the less developed countries tend to trade less and less, with danger of a steadily decreasing gross national income.

That is not only a danger to the less developed countries. It is, in the long run, a much greater danger to the highly developed industrial countries because nothing is more certain than that the free world cannot survive half plutocrat and half pauper, and they know it. What is to be done about it? I often think that when these gargantuan problems present themselves to the minds of men they produce a sort of paralysis which prevents people doing the obvious thing. Here is a problem requiring solution. There may be some very complicated and elaborate answer to it but nobody seems to know the complicated and elaborate answer. However, ad interim, I think there is a simple solution. If we have an organisation for European economic co-operation and development which comprises not only the free countries of Europe but Canada and the United States as well, if they mean what they say, what problem does it present to the nations of that organisation, say they accept the obligation that we must all buy at least one per cent of our total imports from one another?

It is supposed to be a family.

Is that not a perfectly simple solution?

If it could be operated.

The Deputy, I think, is making a mistake. There must be no eleemosynary element in this. I am suggesting that the rich countries of the world know that the free world cannot survive half pauper and half plutocrat. It is that idea that is enshrined in the suggested European economic and development co-operation. Now, does that mean what it says or not? If it does not, the sooner this idea of European economic co-operation is wound up the better. If it does, let us do something about it, and we have a perfectly simple proposition which will resolve a large part of the interim problem which will continue to exist until an exhaustive solution for the whole difficulty is found—let each nation say: "We pledge ourselves to buy one per cent of our total imports from one another".

If the United States, Canada, France, Germany, Italy, Belgium, Norway, Sweden and the others bought one per cent of their total imports from Ireland, our problems were over. It might, on the other hand, create a problem for them because they might find themselves having to deposit a sum here and then to search for means to convert that into goods. It simply means they are co-operating, developing and ensuring that some measure of unity and progress will be maintained between us. As far as co-operation between the USA and Britain is concerned, it happens in any case; it happens unilaterally between Great Britain and Germany already: they buy far more than one per cent of their total imports from each other. What it means is that in respect of poorer members of the community, certain minimum guarantees would be provided—that until such exchanges become automatic, the rich will take steps to ensure that the exchange we all desire will take place.

Does the Deputy think they will ever do it?

If I were there at OECD, I would make them. Is it not reasonable?

Of course it is reasonable, but it does not operate.

We must not simply lie down and let reason die. We must go out to fight in the world for reason. We must not go out to fight always for justice. I am talking about reason. You must be able to say: "Listen; my vital interest is concerned, but I want to demonstrate that your vital interest is involved, too. I want to present to you a proposition."

No one did that in our application last year.

I am talking about the Government.

I was Minister for Agriculture at the time of OEEC. I remember Deputy Cosgrave was sitting beside me. OEEC broke into two parts and there was a green pool annexed. The Minister will remember it. I think they are both combined now. I said to the Secretary General of the new body with which I was primarily concerned as Minister for Agriculture: "You are going to get a fine job and I will measure your competence by your ability or failure to sell Irish fish. If these people mean what they say, they will provide a market for Irish fish, which for them will be a fraction of the total consumption, and for us it will mean the foundation for an expanding market for fish produced by us." Before that had time to develop, OEEC disappeared and OECD exists today.

Does the Minister agree that if OECD accepted an obligation of that kind, it would resolve the problems of the countries which are at present struggling with this growing tendency to imbalance to which Deputy Norton referred? Deputy Norton pointed out that when you examine the whole picture, it transpires that the British market is the market which is of real significance to us. Why? Because we have trading relations with Britain going back over seven centuries. Ever since the first dawn of the industrial revolution, there have been intimate trading relations between us and Great Britain, because we have daily contact with Great Britain and because—and this is a very material and substantial matter—any salesman going from here to Britain, when he trades with Britain, speaks the same language.

Furthermore, what you eat for your breakfast in Britain is substantially what you eat for your breakfast in Ireland; what you wear in Birmingham is indistinguishable from what you wear in Cork; what you smoke in Cardiff is indistinguishable from what you smoke in Drogheda. It is not until you go to the Continent that you discover that what you smoke on the Continent is radically different from what you smoke here. What you eat for your breakfast in the morning on the Continent is different from what you eat for your breakfast here. The clothes you wear on the Continent are entirely different from the clothes you wear here.

It is relatively easy to trade with Great Britain, but to make any headway on the Continent of Europe involves a far more complex operation, and unless we can afford to build up the kind of sales organisation requisite to break in there, I suggest some device along the lines I now adumbrate is necessary if our problems and the problems of other small countries are not to be gravely complicated. I am not offering this as a solution of all the problems that exist in international trading, but I am saying that until someone turns up with something better, unless we are to agree that, the OECD notwithstanding, the free world is to allow that dynamic to continue of the rich getting richer and the poor growing poorer, some interim step is required. Here is one interim step that will solve our problems.

It is a device that could be adapted to very much wider problems, including the problems of the underdeveloped countries in Africa and elsewhere, albeit the percentage may have to be graded down. It is a form of economic development and co-operation that would produce results. I suggest to the Minister that it is worth considering.

I especially direct the Minister's attention to the matter raised by Deputy Cosgrave, the implications of which this Bill is the herald for the men working in industry who are jeopardised by the developments that lie ahead. They require, and they are entitled, to have a recognisable reassurance now. In my judgment, the adaptation requisite to meet the new situation cannot be made without their effective co-operation, and you cannot get that co-operation unless they get the minimal reassurance. I invite the Minister to provide it for them at the earliest possible moment.

I do not underestimate the difficulty of doing so. I fully appreciate it. I do not reprobate the Minister because he has not been able to rush in with a readymade scheme. This Bill is a milestone in the journey towards a new situation which confronts us, and a milestone at which he should not allow himself to be further delayed in producing some blueprint which will meet the problems of the man who entered industry as a worker 30 years ago, and who now, in middle-age, foresees the disappearance of his job.

The House will have little difficulty in approving this Bill. Its purpose is simply to give power to the Government to exempt goods from particular countries from quota orders, and to exempt goods from particular countries from quota orders already made.

I am afraid I am responsible for widening the scope of the debate in so far as I referred to the elimination of quotas, the expansion of quotas, and a review of some commodities which were under quotas. Therefore, the Bill does not relate to the wider scope of the debate, that is, the effect the removal or expansion of quotas is likely to have on Irish industrial firms and their employees. The meat of the debate was provided by those reductions to which I referred in introducing the Bill. I thought that reference would be more appropriate on this Bill than in my reply to the general debate on the Estimate.

I want to mention to the House that only two quotas are being removed. The firms manufacturing the goods which were covered by these quotas are satisfied that the removal of the quotas will have no effect on the employment content or the output of their factories. One is rubber proofed coating, the quota on which is being removed immediately, and the other is cycle tyres, the quota on which is not being removed immediately because of certain administrative difficulties in relation to the Bill.

They are both rubber commodities?

Yes, but, of course, there is more than one firm engaged in rubber proofing coats. Each of these firms was consulted and they gave us the assurance we sought before the action was taken. I want to assure all the Deputies who spoke and who expressed concern about one, the danger of removing quotas, and two, the danger of going too fast, that I am very conscious of these dangers and of the effect there might be on employees. The extensions that will take place have been discussed with the firms involved and any reasonable fears they expressed were taken into account.

I referred to two quotas, leather footwear and woollen and worsted piece goods. One is being reviewed by the Industrial Development Authority and the other may be unless we can come to an agreement with the British, that is the woollen and worsted piece goods. If the quotas disappear it will be because of our obligation under the trade agreement but they will be replaced by tariffs. Therefore, here again the reasonable requirements for the protection of the firms will be taken into account and, therefore, the problems that might be faced by the employees. I can assure Deputy Dillon that I am very conscious of the position of the type of man to whom he refers. It has arisen in my own city where a big business undertaking closed down and went into voluntary liquidation and threw on the labour market a lot of men who had spent their lives working for this firm. Their savings were perhaps dissipated by the obligations they had to their families and their commitments for their own housing were still outstanding and because of the level they had reached in their employment they were not entitled to any social welfare payments. I knew several of these men intimately and I knew some of them practically all my life and I have a good idea of the hardships these men can be involved in. In fact, I have an even more personal contact with this problem because my own father was working for a concern which went out of business, probably from the same type of reason as Deputy Dillon mentioned in his case. I can assure the House that I, for one, will be conscious of the difficulties of men and women in that position.

As I think I told the House on a number of occasions, we had set up during the currency of our application for membership of the European Economic Community an inter-Departmental committee, headed by a Senior official of the Department of Social Welfare, examining the effects of the European Social Fund and how it could be applied and adapted here. That committee is still in existence and they continued, notwithstanding the suspension of negotiations, to examine adaptation and retraining for workers and resettlement costs, so that while I cannot say that there is a ready solution to meet the type of case involved I hope as a result of this exercise, it will not be necessary because the ten per cent increase in the quotas now involving these commodities will not create a great problem for the firms involved, and the firms were specifically consulted. I want to assure Deputy Barry of that, in all cases——

Will that be done in the leather trade and the shoe trade, if we increase the number of shoes we allow in?

In so far as footwear is concerned, I am afraid we have no say. The British were entitled to apply at any time to have the quotas replaced by tariffs. The obligation to examine any such application was at one time on the Prices Advisory Body and latterly the obligation reposed on the Industrial Development Authority. At the present time they are examining such an application and they will be bound to suggest a tariff to replace the quota.

Has the tariff to be mutually agreed to?

No, whatever tariff will be suggested by the IDA as the reviewing authority——

Is this for protection? Is it to give the others a reasonable chance of competing?

——as reasonable protection for Irish industrialists. Within these limits, the IDA will have to impose the tariff in replacement. In so far as the woollen and worsted goods are concerned, the British have the same right but we are now negotiating with the British to see if we can come to some agreement with them on woollen and worsted goods rather than have the matter submitted to the Industrial Development Authority for a similar type of review. As Deputy Dillon said, we are members of OECD. We hope to move towards liberalisation and I think we have a reasonable record in that regard so far. We are also in this fast moving world where freer trade is pressing in on all sides and because of our isolation now, I think it would be wrong to stay in isolation so far as protection is concerned. As I said at the outset, it is important that we should make some move in this direction so as not to be left completely bereft of competitive ability say by 1966 or 1967, when tariffs, and possibly quotas, will have been removed in other European countries and when the results of the Kennedy round will have had its effects so far as the United States of America is concerned. It is important that we should, even at some pain to ourselves, take steps to ensure that our industries will be reasonably competitive at a time when we hope we can take our place in an expanded European community.

Both Deputy Norton and Deputy Cosgrave dwelt at some length on the balance of payments problem. This Bill is not designed to improve that as such. We have the other Act, the Restriction of Imports Act, 1962, which was passed recently, but which as I stated in the House at the time, was designed to meet the position of imbalance as far as Iron Curtain countries were concerned. It was not the intention to apply it to other countries but there is a considerable degree of control involved in this Bill. If the position went out of hand with non-Iron Curtain countries I am sure I would get the goodwill of the House if I asked for it in the event of applying the provisions of the 1962 Act against non-Iron Curtain countries, if that were necessary.

I do not think there is anything more I need say except, again, that this Bill does not provide for the extensions of quotas which are now being proposed as well as the removal of a quota in one case and the removal, ultimately, of a quota in another case. These have all been done by Orders under previous Bills and by Orders which will be effected in a short time.

Whatever may have been the attitude of the firms concerned at the outset of the negotiations leading to the liberalisation of the quota, can we take it from what the Minister said that, in the end, they all agreed?

I cannot say they all agreed fully. Nobody likes to remove something he regards as valuable to him.

Hear, hear.

In many cases, we got agreement; in some cases, we got reluctant agreement.

Did the Minister get any continuing dissent?

We have not removed any quotas where there was dissent.

Did the Minister get a reluctant agreement in all those cases where he is now increasing the quota coming in?

They all agreed to that. Actually, we are removing only two quotas. We have full agreement in these two cases.

What happened in the other cases?

They have consented to the extension of quotas.

Unwillingly?

In many cases, willingly; in some cases, perhaps, with a little show of apprehension.

What is an "extension"?

A ten per cent increase.

Coming in?

I should call that liberalisation. In other words, the Minister was letting in more. All the others consented ultimately?

Yes. In the two cases where the quotas were removed, they gave consent.

Question put and agreed to.
Agreed to take remaining Stages today.
Bill put through Committee, reported without amendment, received for final consideration and passed.
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