I move:
That Dáil Éireann approve the Agreements, Exchanges of Letters and Understandings between the Government of Ireland and the Government of the United Kingdom which were signed in London on the 14th day of December, 1965, and copies of which have been laid before Dáil Éireann.
I assume, Sir, that in accord with the normal practice of the Dáil this motion and the amendments which have been tabled to it will be discussed together.
No trade agreement emerging from a long hard process of negotiation could be presented as giving us all the trade advantages that we would have wished or that we could have thought of if the British Government had left it to ourselves to settle its provisions as we desired.
The first comment that must be made on the Agreement now being considered by the Dáil is that it was a negotiated Agreement which, even if it does not give us everything that we sought, provides, nevertheless, a fair balance of advantages and which was accepted and signed on behalf of the Government because we believe it to be a good Agreement which will contribute to Ireland's future economic progress, to the expansion of exports on which the country's economic progress depends and to the adjustment of the national economy to the conditions which are now developing generally in international trade.
The second aspect which should be noted is that it is a permanent Agreement which contains no provisions for its termination. It is our intention that it will continue to regulate our trading arrangements with Britain until it is absorbed in an agreement for our membership of a wider international trading group, whether the European Free Trade Association or the European Economic Community or, perhaps, a combination of both. Changes in the Agreement can be envisaged and may be discussed from time to time, but, if and when they are made, they will be by the process of consultation and agreement and only when mutual interest makes them as acceptable to this country as to Britain. This element of permanency in the new Agreement gives us a degree of security which was lacking under previous Agreements and which will facilitate us in the planning of our national economic progress.
Another aspect which it is desirable to stress is that the process by which the Agreement came to be negotiated began on our initiative. Understanding of this basic fact may help to remove some misconceptions. The idea of making a free trade agreement with Britain, while awaiting developments in the European Economic Community, was first put forward to the British Government by us. It is not an arrangement which anybody asked or urged us to accept but one which we ourselves desired and which we proposed because we considered that it was necessary in this country's interests.
Following the interruption, in January, 1963, of the negotiations for British membership of the European Economic Community and the consequential suspension of action by the EEC on our application, we had to give careful consideration to the best course to take to protect our economic interests in this uncertain situation. Some of the decisions which were taken then were explained to the Dáil early in 1963. Amongst those decisions was one of considerable importance regarding the policy of industrial protection out of which developed the proposal to the British Government for the making of this Free Trade Agreement. I informed the Dáil on that occasion, in 1963, of our intention to continue with the process of reducing our industrial protection which we had initiated in the previous year, 1962, in anticipation of, and as a part of our preparation for, our membership of the European Economic Community.
This policy decision was based on a number of considerations, all of which were stated and, to some extent, debated here at that time. There was, first of all, the consideration that the policy of protection had ceased to be effective in our circumstances as a means of promoting industrial expansion and had been replaced by the policy of capital grants, technical assistance and tax inducements. Secondly, there was the consideration that the maintenance of high protection was in some instances supporting inefficiency and high costs, both of which this country could no longer afford to carry, and also there was the understanding that the reduction of tariffs was a necessary stimulus to greater industrial efficiency and to the expansion of industrial exports by industries to which tariff protection continued to apply.
Thirdly, there was the consideration that the country had to be made ready in all aspects of its economic organisation to meet the situation with which it would be faced when membership of the European Economic Community would become possible, which it was assumed would be before the end of the present decade, that is, before 1970. It was accepted that this could involve us in a very rapid rate of elimination of our protective tariffs if the process was not started in good time and if the full obligations of the Treaty of Rome had to be accepted by this country by 1970 without qualification.
It was clear to us that the reduction and the eventual elimination of our protective industrial tariffs was a course dictated by our own interests and it was a course on which we had decided to embark regardless of any reciprocal advantages which other countries might be willing to give us. We made known in the Second Programme for Economic Expansion our intention to have another look at the whole position in this regard after three ten per cent across the board tariff cuts had been made, that is to say, in 1965. We had decided to continue the process after 1965, however, if the prospects of European Economic Community membership seemed to be closer at hand, or if other countries, and particularly Britain with which we now do 72 per cent of our export trade, were prepared to extend corresponding trade advantages to us.
The first approach to the British Government for a new trade agreement of the kind now completed was made in 1963, after the deadlock had developed regarding European Economic Community membership for both countries and when Mr. Harold Macmillan was the British Prime Minister. There had been an earlier approach for a comprehensive revision of the existing Trade Agreement on a different basis in 1960 following on the breakdown of the Free Trade Area negotiations and the setting up of the European Free Trade Association, but this had in its main purposes been unsuccessful, as I informed the Dáil at that time, although some amendments of the existing Agreements were negotiated in that year.
We know now that the British Government were during that period in process of making the change in their policy which led in 1961 to their application for membership of the European Economic Community. In 1963, however, after the EEC deadlock had arisen, Mr. Macmillan expressed interest in the wider free trade suggestion which we then proposed and we arranged for further discussions on it at official level; but, mainly I believe, because of the political situation in Britain at that time, including the uncertainty of Mr. Macmillan's continuing in office as Prime Minister, and also about the date of the general election in Britain, the official talks which took place following my meeting with Mr. Macmillan made little real progress because, as it seemed to us, the British officials participating in the talks had no very precise instructions other than to discuss and to explore our ideas.
This position remained virtually unchanged until Mr. Harold Wilson's Government came into power. When I went with the Ministers for Industry and Commerce and Agriculture to see Mr. Wilson and his Ministers in November 1964 to discuss the implications of the British special import charge on the trade relations of the two countries, he indicated that he was aware of the proposals we had made to his predecessor and that he was prepared to discuss them. Because of the deterrent effect on our development prospects by reason of the uncertainty regarding our future trade arrangements with Britain, arising from the special import charge in contravention of existing Agreements, we were most desirous of getting effective negotiations on future trade arrangements between the two countries under way as soon as possible. There was reason for our anxiety in that, in the absence of any effort to work out a new agreement, our industrial expansion would mark time until the special import charge had been ended or the future trade relations between the two countries had in some way been clarified.
Arrangements were made with Mr. Wilson for the commencement of the examination of our outlined proposals in detail. The talks between officials were resumed early in 1965, when it soon became clear that they had a new sense of purpose and that the British officials had the backing of a Government decision that such an agreement as we had envisaged should, if at all possible, be worked out. The discussions soon ran into some difficulties and in July, 1965, I went with my colleagues, the Ministers for Finance, Industry and Commerce and Agriculture and Fisheries, to London once more for further talks with Mr. Wilson and his Ministers. We succeeded in securing some provisional decisions which enabled us to announce that the objective of the negotiations was a Free Trade Area Agreement, and which allowed the negotiations to proceed, although there were still some months of hard negotiations before us. Indeed, the duration of the negotiations and the process of reaching agreement —agreement on arrangements we could accept—were much longer than we had originally either expected or desired. British officials are highly experienced and skilled practitioners of the art of negotiating trade agreements and they retreated very slowly from the positions they had taken earlier.
When the officials of both sides had brought the negotiations as far as was possible for them in the light of their instructions and had reported to the two Governments on their inability to make further progress on important aspects of the negotiations, the final ministerial talks were arranged. Because other problems were occupying the attention of the British Government these final discussions took place some weeks later than we had expected. In this connection I should like to pay tribute to the officials of both sides who, particularly in the closing stages of the negotiations, worked continuously for very long hours, sometimes all night, to complete the drafting of the technical provisions of the Agreement and to clarify the options that had to be left for the ministerial discussion.
Before entering on these final talks, we settled amongst ourselves as a Government in respect of the outstanding points and in the normal way the arrangements we should strive to obtain in regard to the matters still outstanding, the fall-back positions for which we would settle if we had to, and the circumstances in which we would break off the negotiations. As it turned out we got what we sought in most respects and the fall-back positions in others, and there was no break. I must say that I do not believe that this could have happened but for the personal intervention of the British Prime Minister, Mr. Harold Wilson, at the final and crucial stages of the negotiations when, as is perhaps not unusual in these matters, the main purpose of the negotiations was becoming obscured by arguments about details.
This new Trade Agreement with Britain must be considered against the background of the European situation as it is developing and in which this country has to earn its living by expanding its exports. Any Deputy who fails to keep this background situation constantly in his mind may not fully understand its significance and importance for this country at this time. Within 12 months all the countries of Western Europe with which we have any significant trading relations will have completely removed their tariffs and other trade restrictions against one another within the ambit of the European trade groups, the European Economic Community or the European Free Trade Association. Except for this division into two blocs, Western Europe will then have entered the era of free trade. Their industries will have completed whatever reorganisation was required by reason of the elimination of protection of their home markets and their access to wider tariff-free export possibilities.
We have not heretofore participated in this movement and this reorganisation to anything like a similar extent and the efforts to bring about similar progress and similar changes here were frustrated in some degree by the continuing uncertainty regarding our situation and about our future trading relations with the countries of Western Europe. This has been for some time past a serious threat to our industrial progress. This uncertainty has now to a considerable extent been removed and this is one important advantage of the situation created by the new Agreement.
It is, as Deputies know, our assumption that within some period of time Member States comprising the two European trade groups will come together in an enlarged free trade area or common market. Views may differ as to when or how this may come about but few in any country in Europe deny its inevitability. The only sensible course is to assume that it will come sooner rather than later and to make our own reorganisation plans accordingly. We have already lost valuable time and we have now to make it up without further hesitations or delay. These changes and developments in Europe are not going to stop and it would be only wishful thinking to believe that they might stop. It is certainly not in our power to stop them, much less to turn back the clock to the older international trading system in which tariffs and quotas regulated trade and which has now departed probably forever. Nor would it be in our interest to try to do so even if we had the power because to a much greater extent than other European States, not excluding Britain, this country lives by its external trade——