Dáil Éireann debate -
Tuesday, 4 Jan 1966

Vol. 219 No. 8

Agreements between the Government of Ireland and the Government of the United Kingdom.

The Taoiseach

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——

Deputies

Hear, hear!

The Taoiseach

——and can achieve economic and social progress only by expanding its exports. We could not maintain ourselves as a nation except for a minimum population at very low living standards if we were to be cut off or were to cut ourselves off from external markets.

Deputies

Hear, hear!

The Taoiseach

I am glad I have got some measure of agreement.

Mr. S. Collins

Forty-five years too late.

Mr. Moran

This is not a secret Agreement.

The Taoiseach

The emergence of the prospect of tariff-free trade and the general removal of all artificial barriers to the expansion of our exports of every kind, no matter what transitional problems it may create for us or what adjustments we may have to make in industrial organisation, must be welcomed as conforming to our long-term national interests, and we can congratulate ourselves that we are now approaching the stage of industrial development in which we can face up to it with the assurance that it will contribute to the country's continuing industrial growth.

It was with these considerations in our minds that we participated between 1956 and 1959 in the negotiations for a European Free Trade area, although not, I confess, with very much enthusiasm because of their limited scope. We were not unduly dismayed when these negotiations broke down in 1959 because that operation envisaged a Western European free trade area for industrial products only which would afford countries like Ireland, which are still, and always will be, largely dependent on agricultural exports in one form or another, no compensation, in increased agricultural exports prospects, for the problems and the difficulties likely to created for us on the industrial side.

When the European free trade area project disappeared in 1959 and when seven of the countries of Western Europe which were not in the European Economic Community, including Britain, which is our principal export market, came together to set up the European Free Trade Association, we were again faced with a great problem and the need for an important decision. We decided we should not seek to participate in this new association which was again concerned solely with industrial trading and offered no advantages in regard to agriculture.

In 1959, this decision was easier to consider because of our expectations at that time that pressure to open up the European Economic Community to include Britain and other Western European countries was likely to build up. Of the member States of EFTA, however, only Britain has any significant imports of agricultural produce of the kinds we export and the conclusion now of an agreement with Britain which settles the terms of our trading in agricultural goods with that country opens for consideration again the question of our EFTA membership on the basis that the provisions of our agreement with Britain, including the rhythm of tariff reduction, the exclusion list and the safeguards, would be acceptable to the other members and that we would be entitled to all the benefits of membership. These benefits, however, would not be considerable as the present pattern of trade indicates. Our aim is, of course, to achieve membership of the EEC and, if we should decide to explore EFTA membership, this aim should not be considered as modified on that account. It is, however, unlikely in the extreme that membership of the EEC will be feasible for us except in circumstances in which it will be feasible also for EFTA countries——

Mr. Dillon

Hear, hear!

The Taoiseach

——or arises from a situation in which the two European groups will amalgamate in one way or another. Deputies who have been following events in this respect will be aware that on the initiative of the British Prime Minister, efforts are being made to promote contacts between the two European groups with the ultimate aim, no doubt, of bringing about some arrangement of this kind. Membership of EFTA might become a matter of urgency as well as of importance to this country if these efforts should look like making progress, though it cannot be said this is so at the present time.

Some time ago I received an invitation from the President of the Council of Europe, Monsieur Pflimlin, to address the Assembly in January of this year. This was unconnected with the British trade negotiations but I decided to accept it because of the opportunity it will afford to relate this agreement with Britain to our wider European objectives and to place it within the ambit of our general policy of support for the economic integration of Western Europe within an enlarged Economic Community. I have tried in various public statements in recent months to promote understanding that the negotiation of a new trade agreement with Britain was necessarily the first step in a general rearrangement of our external trading situation, whether this comes about on a world-wide scale through GATT or in limited, regional negotiations. This is clearly the case if our participation in a European multilateral system is to be brought about through EFTA, where agricultural trade would not be involved.

An agreement with Britain settling the conditions under which our agricultural trade would be carried on had to be concluded before the question of EFTA membership could even be considered. To have negotiations for EFTA membership involving the dismantling of our tariffs for all EFTA members including Britain without having a prior agricultural agreement with Britain would have been a very shortsighted procedure. Whether in regard to EFTA or EEC there may be some advantages in having this agreement with Britain, with its precise provisions relating to our industrial situation already in existence. It would not be possible now to assess the strength of this advantage in regard to EEC or to assert with any confidence that it may be possible to arrange for any modifications on similar lines of the provisions of the Treaty of Rome when negotiating for membership. It would, however, be highly undesirable that any misunderstanding of this position among Irish industrialists should operate to generate an atmosphere of complacency.

It is necessary to reiterate that it is our firm intention to join the European Economic Community as soon as this becomes possible for us, on whatever terms may be negotiable. Our industrialists must therefore face up to the possibility, even if it is put no stronger than this, that on our acquiring membership of the European Economic Community we may have to accept a more rapid rate of tariff reduction and may not be able to retain all the safeguards and escape clauses negotiated in the British agreement. In the case of any industrial enterprise not yet preparing itself for free trade, there should therefore be no putting on the long finger the reorganisation and re-equipment which may be needed to enable the industry to cope with free trade. The full impact of free trade may, by reason of our membership of the European Economic Community during this decade, conceivably come sooner than the terms of the British trade agreement would require.

In considering the merits of an agreement of this kind, it is also necessary to keep the alternative courses clearly in our minds. If anybody argues that this agreement should not be made or should not now be approved by the Dáil, he has an obligation to state his mind on the options, the alternatives, open to us. Some criticisms of the agreement are no doubt reasonable—suggestions that some clauses might have been worded differently, that it would be advantageous to have some provisions which the agreement as it stands does not contain. I doubt, however, if any Deputy can think of anything of this character that we did not think of ourselves and that we did not discuss in the negotiations.

When speaking of alternatives, I am thinking not of minor changes but of more general aspects of national policy and the direction in which we visualise the development of our external trading policy taking shape. If this agreement were not made or is now rejected by the Dáil, what other courses are open to this country? It would be irresponsible to argue against this agreement while leaving that question unanswered. The negative approach expressed in the Labour Party's amendment is not good enough unless it is amplified during the debate. It would be equivalent to the repudiation of the clear responsibilities of any political Party who wish to be taken seriously not to offer positive solutions to national problems.

The alternatives open to this country are not very many. We could have decided to go on without making any changes either in respect of our own protective tariffs or our trade relations with Britain until membership of the European Economic Community became possible or some new and now unforeseeable development took place in the European economic situation. Such a policy of inactivity, of waiting for something to turn up, would be fatal to our future development. It would have meant continuing the climate of uncertainty which was a real handicap to our economic progress during 1965. It would have meant facing and accepting the possibility of having to undertake a very rapid elimination of our protective tariffs, to secure European Economic Community membership when it became possible, without any period of preparation for our protected industries. If, when that time came, we were forced by our unreadiness to decided that we could not undertake this very rapid reduction of tariffs, or to face the consequences for our unprepared industries, it would almost certainly have compelled us to a decision at the time when European Economic Community membership became feasible to postpone our application or to seek something less than membership if that were possible, and it might not be, involving also the postponing or reduction of the advantages of membership in consideration of the lessening or delaying of the obligations which we were unable to carry.

Deputy Cosgrave in a Press statement on behalf of the Fine Gael Party said that the Government should have explored the possibility of an arrangement with the European Economic Community by which, he suggested, we might have secured some new outlets in that market without losing access for some key products in the British market. This idea, that we could achieve some form of association with the European Economic Community which would give us some or all of the advantages of membership without having to accept the obligations, has been expressed here before. It is a foolish idea which probably even those who make it do not take very seriously. It is based on a complete misunderstanding of the provisions of the Rome Treaty and of the considerations which determine the policies of the European Economic Community.

Formal association with the European Economic Community as is provided for in the Treaty of Rome, and as was arranged with Greece, would involve, as it did in the case of Greece, participation in the Community Customs Union, including commitments on our part to abolish our tariffs on Community goods and at the same time to align our tariffs against outside countries, including Britain, with the Community's common external tariffs. I have tried again and again to explain this to Deputies opposite. Both those commitments would involve a disruption of our existing trading arrangements with Britain with unpredictable and probably disastrous consequences for this country's economic welfare and for the maintenance of employment. The reluctance of some Deputies to face realities in this respect has constantly astonished me, and I am not often astonished by this attitude. The idea that there is a possibility of negotiating some arrangement other than formal association with the European Economic Community in relation to their common external tariffs which would still give us free access to the European markets and, at the same time, would permit of the maintenance of some or all of the British preferential rights in our market, in return for which we might retain access to the British market for some of our key products, is equally divorced from the realities of the situation. The Government have to deal with realities however freely Opposition Deputies may let their imaginations roam.

There is no reason to think that arrangements of that kind would be negotiable either with the European Economic Community or with Britain. We discussed various possibilities with the European Economic Community in 1963 and 1964. In November, 1963, a delegation was led by the Minister for External Affairs to Brussels, which discussed the situation as it then was with the European Council of Ministers. In March, 1964, there were discussions by senior officials with the European Commission and in March, 1965, there were further discussions by a delegation led by the Minister for Agriculture. We found no indications of any readiness to make an arrangement with us of such an exceptional nature as would enable us to concede to Britain, to any extent, preferential rights in our markets without which we could not hope to negotiate or retain preferential treatment for our exports on the British market.

Later in 1965, as everyone knows, a situation arose in the European Economic Community which precluded the possibility of useful discussions of any kind on topics of this character, and that situation still persists. A link with the European Economic Community outside the common external tariff might in theory take the form of an exchange of trading advantages on a non-discriminatory basis, that is to say, reductions in the Community's external tariffs or changes in their levy arrangements negotiated with us which would apply equally to all other countries supplying the same goods to the European Economic Community as it would apply to us. There could be no question of preferential treatment for this country exclusively. All the European Economic Community countries are committed to the GATT rule of non-discrimination. This possibility was discussed with the European Economic Community at the time when the Community were preparing to propose reductions in the common external tariffs in the context of what is known as the Kennedy Round in the GATT and they were not prepared — and this is readily understandable—to discuss such a reduction with us in advance of the GATT negotiations.

That is one reason why we want to get into the GATT in time, although it must be said that, because of the position which is persisting in the European Economic Community, the prospects of the GATT negotiations for all-round tariff reductions being started early in this year do not now look to be very bright. Definitely I can say to the Dáil that there are no trading advantages negotiable with the European Economic Community which would at the same time permit of the preservation of our preferential access to the British market. This is a will-o'-the-wisp with no more solidity than Fine Gael's desire to present something which could pass as an alternative policy. If, at this time, the negotiation of our membership of the European Economic Community, or an association with the European Economic Community, or a trading agreement with the European Economic Community relating to specific products, is not open to us—as it is not —what alternative courses are there for us to follow?

For this country, with a limited home market which can support, without exports, only a restricted range of the smaller, less sophisticated industries, the only alternative to joining in the European movement to free trade, and the negotiation of an agreement of this kind with Britain is the first step, would be to decide to withdraw from European trade, except to whatever extent we are prepared to lower our living standards so as to permit the selling of our products in the European market over the tariff walls against us, nursing our high cost, inefficient, soon-to-be-obsolete industries behind ever increasing tariffs, accepting the inevitable contraction of the level of our economic activities, the accelerated emigration of our workers and the death of our nation. This is an alternative which most of us will reject. There may be some, however, who will still argue for this alternative without attempting to face up to, much less to define, what it would mean.

This appears to me to be the position of the Labour Party, but that is for them to clarify. The Party opposite now are in favour of the policy they opposed 30 years ago. As I have said before, 30 years hence they will be defending this Agreement. The wiser course is to look realistically at the world in which this nation has now to make its way.

(Interruptions.)

The Taoiseach

Would the Deputy mind desisting for a time? If his interruptions were sensible, I would not mind.

An Ceann Comhairle

Order.

The Taoiseach

We have systematically to prepare ourselves for this real world and this means accepting the wisdom and inevitability of eliminating our high protective tariffs and completing the process of reorganisation in the protected industries and relying upon other, more modern and more effective methods of encouraging industrial growth of the kind we need. Because this policy is so clearly dictated by the circumstances and so clearly in our own national interests, we must count it as fortunate that we found our principal customer agreeable to the proposition that in consideration of our doing what we had already decided for ourselves was necessary, they should give without any delay substantial trading advantages in respect of both our agricultural and industrial products without limit in time and in this way to help us to strengthen our national economy during the period while the process of preparing for European Economic Community membership is being pushed ahead.

Deputies will have had time now to study the details of the Agreement, and the White Paper published by the Government has translated its legal and technical terms into comparatively simple explanations. The Ministers who participated with me in the negotiations, the Ministers for Finance, Industry and Commerce and Agriculture and Fisheries, will speak in this debate to explain its provisions even more clearly and to elaborate on their significance in relation to our national economic development plans. For my part, I propose to refer now only to its more general characteristics.

Deputy Cosgrave at his Press Conference said that the Agreement lacks balance and the Labour Party say the same in their amendment. They would of course have felt constrained to say that, no matter what agreement had been negotiated. This is the stock in trade of political argument as they see it and need not be taken very seriously. So far as our agriculture is concerned, the Agreement is all gain.

Mr. Dillon

Oh!

The Taoiseach

Maybe there are some who would have wished that we would have been able to secure more advantages but, be that as it may, for agriculture there are no disadvantages even in respect of the retention of protection in our home market where this is justified by reason of special circumstances or to assist us in the development of new activities. It would be easy to say that in the negotiations the Minister for Agriculture and Fisheries had the pleasanter task, though this would not be wholly true, although I can testify that he fought tenaciously for every possible advantage for our farmers. For the Minister for Industry and Commerce, even more than the Minister for Agriculture and Fisheries, the signing of the Agreement marks the commencement of a great new period of activity rather than the completion of a specific operation. This will involve the preparation and submission to the Dáil of a number of Bills during this year. Irish industry now has to accelerate the process of reorganisation which was commenced some years ago, and the drive to bring about the establishment of new export industries has to be intensified. The future course of our national economy has been charted and everybody can see both the problems that have to be resolved and the opportunities which must be used.

It is, I believe, generally agreed by industrialists that the safeguards and escape clauses in the Agreement which the Minister for Industry and Commerce succeeded in having inserted in it, and which will give some latitude in dealing with the problems of adjustment in industry, are reasonable enough. Not all the problems of adjustment can at this point of time be estimated with any precision, or perhaps even foreseen, but these provisions allow reasonable latitude.

Deputy Cosgrave at his Press Conference implied that the safeguard against industrial difficulties provided in the Treaty of Rome for members of the European Economic Community would be of greater value than those negotiated in the British Agreement. I can only assume that he was informed to this effect by some self-described expert in these matters and did not take the elementary precaution of checking the facts for himself. The safeguard clause in the Treaty of Rome operates only for the duration of the transitional period and provides that a Member State experiencing difficulty in a particular sector may request the European Commission to sanction protective measures. A country cannot act on its own initiative. If the Commission decide that protective measures are justified, it is they also who decide what these measures should be and how long they should last. There is no specific provision in the Treaty of Rome for safeguard measures after the transitional period.

In the British Agreement, on the other hand, some products are excluded permanently from free trade and after five years the number may be enlarged by our own decision; at any time during or after the transitional period, difficulties in particular industries may be met by the imposition of quota restrictions for 18 months, again by our own decision. There is provision by which, with the agreement of the British Government, the transitional period may be prolonged for some products. There is no similar provision in the Treaty of Rome. Under the British Agreement, we can deal with the problems of dumping by taking action on our own initiative and justifying it afterwards. Under the Treaty of Rome, we will not have this power. The statement that the safeguards in the Treaty of Rome are stronger than those in the British Agreement does not stand up to examination.

Mr. Sweetman

Where is your stabilisation fund?

The Taoiseach

I hope—although not, I may say, with very much confidence—that in negotiating for membership of the European Economic Community we can persuade them to give us, if only for a limited time, the safeguard clauses of the British Agreement, which are obviously more suited to our circumstances.

Deputies, like members of the Government, will be concerned at the prospect that some existing and protected industries may not be able to adapt themselves to free trade, that is to say, put themselves in a position even with reorganisation, re-equipment and Government financial help, to produce goods which will be fully competitive in price, quality and variety with those that may be imported in conditions of fair competition. No existing industry, no matter how small or inefficient it may seem now, is being written off. In each case there will be an examination in depth of every possibility of reorganisation, with ample Government assistance available to ensure that not only survival but development will be fostered in each case.

In this connection I should refer to the provision of the Agreement which will enable us to transfer after five years to the exclusion list a number of industrial products, representing, in total, trade to the extent of three per cent of British imports in the immediately preceding year. The extent to which and the manner in which this provision will be used will call for most careful consideration when the time comes. Certainly, it must not be thought of as available to exempt lazy or incompetent managements from the obligations of reorganisation, but solely to help industries which are genuinely trying to maximise their efficiency—and which can be trusted to keep on doing so even if their protection is perpetuated—and which require the continuation of protection for good reasons outside their own control. But even among such industries, there will have to be a process of selection. Industries which draw their materials or equipment from other industries cannot be permanently handicapped in conditions of free trade by being forced to purchase their supplies from protected Irish sources at higher costs than their competitors elsewhere. This escape clause may, it seems to me now, to the extent to which it is used at all, have to be confined to industries which are concerned with the production of consumer goods where the higher prices and other factors which justify the perpetuation of their protection are not imposing an undue burden on the national economy as a whole or impeding the development of any other productive processes.

Irish industrialists as a whole must approach the new trade situation, not in a defensive mood and thinking of ways by which the obligations of free trade can be avoided or restricted, but instead in a spirit of aggressive development, using in full the opportunities created by the Trade Agrement and by Government development policies. Opportunity is now knocking at our door. We must go out and welcome it. The making of this Agreement opens the way for a new era of industrial expansion here. This must begin now in 1966, so that the growth of industrial output and industrial employment will help the country to meet whatever problems of adjustment may arise later. It is the intention of the Government to bring this about.

Another aspect of the Agreement which has aroused interest is the reference to trade with Northern Ireland. We have already, as Deputies know, made some tariff changes for the benefit of Northern manufacturers. These changes were in technical contravention of existing Trade Agreements but they did not draw objection from any source. Henceforth, as far as Britain is concerned, this practice will have formal approval. Heretofore, these tariff changes were made in an ad hoc and unsystematic manner following approaches to us by industrial interests and commercial associations from the Six Counties. We are now considering a more systematic adjustment of our tariffs during the transitional period to facilitate the expansion of internal Irish trade across the Border. This will require consultation with manufacturing interests, although purely commercial considerations cannot be the sole factor in our decisions.

There are of course people who profess or pretend to see in this Trade Agreement some implications regarding our national sovereignty. There are of course some people still affected by the sense of inferiority which was once the main national curse, who have never been able to bring themselves to accept the reality of our sovereignty. There are others who, for the same reason, cannot conceive of an Irish Government entering into trade negotiations except from a position of inferiority. I suppose these doubts would not have been there if it had been possible for us to achieve the same trade relationship with Britain through membership of the European Economic Community or the European Free Trade Association. I have explained the very practical considerations which made it necessary, in our own interest, to place our trade relations with Britain, particularly with regard to agriculture, on a new and permanent basis before considering the other possibilities which are open to us, particularly membership of EFTA.

What we have made with Britain is a trade agreement and nothing more. It is an agreement which, as I have said, was entered into on our own initiative and in our own interest. There are no non-trade provisions in it, no political implications of a non-trade character, except to the extent that we see it as facilitating our subsequent membership of EEC on the basis of full equality of status and opportunity with other members. As the elected representatives of the Irish people, we sat as equals with members of the British Government and freely worked out a relationship in the sphere of trade which, in our judgment, will facilitate Ireland's economic growth and open the way to our further and full participation in wider international systems.

We conceive of this new Agreement as representing a great advance towards our economic development and our economic independence. Anybody who does not see that this is so either does not understand the requirements of development or the characteristics of independence. There is no real independence in a country whose products are not able to find export sales on their merits, without having to haggle for preferential treatment. When the country has adjusted itself to the conditions prescribed in the Agreement and availed of all the opportunities which it creates for us, we will have a fully viable national economy, able to sustain itself without artificial props either of protection in the home market or preference in the British market and which will facilitate the realisation of all our economic and social purposes.

More than most members of the present Dáil, I have personally been associated with the policy of industrial development in this country——

Deputies

Hear, hear!

The Taoiseach

——and have had responsibility in Government for the formulation and the fulfilment of plans to bring it about. When the situation envisaged in this Agreement is accomplished, when Irish industry is so organised, managed and equipped as to be able to meet fair competition in the home market and to win ever-expanding markets abroad on the basis of the quality, price and variety of its products, it will have become fully mature. The swaddling clothes which I helped to fashion for it can be cast aside and the nation can face the final phase of establishing its industrial organisation with greater confidence than ever before. It is in reflecting that confidence that I now recommend this motion to Dáil Éireann.

Mr. Cosgrave

I move:

To delete all words after "Dáil Éireann" and to insert the following:

", while approving 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, is concerned with the inevitable effect of the freeing of trade on employment and emigration and deplores the fact that the Agreement as negotiated is unbalanced and that the concessions obtained are small in the immediate future and limited and insecure thereafter."

Having listed to the Taoiseach's speech in moving this motion of approval, one cannot but reflect that there is no zeal as enthusiastic as that shown by the convert.

Deputies

Hear, hear.

Mr. Cosgrave

I think it is also pertinent to observe that learning the facts of life can be a painful and costly process on occasion.

Deputies

Hear, hear!

Mr. Cosgrave

The only difference here is that those responsible are not paying the price.

Deputies

Hear, hear!

Mr. Cosgrave

It is possible to evaluate and examine the actual advantages of this Agreement, when stripped of the enthusiastic language of the Taoiseach and probably the even more enthusiastic comments of the Minister for Agriculture and the chapters of a somewhat propagandist kind which have the hallmark of having been prepared in 13 Upper Mount Street, or somewhere near to it, and the other documents.

If we examine what practical changes will flow from it in respect of industry and agriculture, I think we can see that the statement issued by the Fine Gael Party in respect of it was not merely fair and reasonable but was an accurate assessment of the terms of the Agreement and the likely prospects for agriculture and industry which would flow from the operation of the Agreement when it came into effect. But, before coming to that aspect of it, having listened to the Taoiseach's historical account of the negotiations, which was in some respects rather jaundiced, I think it is right to say that these negotiations have been conducted with a certain air of mystery and the responsibility for that position rests on the Government.

When the British import levy was imposed at the end of 1964, the Government went to London and made representations, without success. It was announced at that stage that certain negotiations would be undertaken and, subsequently, officials went across and, later, the Taoiseach and Ministers went in July. But it was after the July meeting, for the first time, that a free trade area agreement was mentioned. The House will remember that, at the time that communiqué was issued, the House was in recess. In the communiqué issued after those talks, the House will remember that it was said that Ministers reviewed the results of the examination of the possibility of improving the permanent trading arrangements between the two countries which their officials had made as was arranged at the meeting between the Taoiseach and the British Prime Minister on 5th November. They agreed that this examination had disclosed, as one possibility, the establishment of a free trade area between the United Kingdom and the Republic and they instructed their officials to continue their discussions with a view to seeing whether a mutually advantageous agreement on that basis could be concluded. That was the first time a public reference was made, in the course of these discussions, to the possibility of a free trade area.

When that communiqué was issued, I sought, on behalf of the Opposition, to have the Dáil recalled in order to discuss it. That request was refused, as also was time, when the Dáil did resume, for a motion to discuss the possible terms of the Agreement. I think it right to say that that whole attitude was unsatisfactory and created the impression that the Government were not anxious to discuss in advance the possible terms of an agreement, although, at a later stage, the Minister for Finance spoke to the Corkmen's Association dinner in London and referred in that speech to the negotiations which were proceeding. It is a strange fact that the British Prime Minister—or the Queen, as the case may be—in the course of an address on the resumption of the British Parliament, adverted to these discussions. The British Prime Minister adverted to them in the course of his speech on that occasion: our Minister for Finance discussed it at the Corkmen's Association dinner in London. The Dáil was denied an opportunity of discussing it.

Is it any wonder that a great number of people are concerned and have rightly expressed concern? It is somewhat arrogant and intolerant to dismiss too lightly the concern of some of these people, even though we may question the wisdom of their approach or their capacity to express sound views on the actual terms of the Agreement.

We have said that this Agreement lacks balance. The Taoiseach has argued strenuously here that it is more balanced than EEC membership prospects offer. He argued here a few moments ago that, because we have a longer transitional period than was offered in the case of the EEC, there is some advantage. By means of an interjection, Deputy Sweetman rightly pointed out that there is no stabilisation fund in this, that there is no social fund such as exists in EEC membership to deal with redundant workers and workers who are transferred. There is a promise that some manpower agency may be established here to deal with it and they will be provided with funds. The difference is that the funds in this case will have to be provided by this country and not by the community. But, leaving that aside altogether, the position has been reached here that a great many firms are seriously concerned at the lack of effective measures to guard against dumping and unfair competition. The Article dealing with this dumping and subsidised imports is by no means satisfactory.

It has been alleged that because we are entitled to take action in advance without getting community sanction, as was the case with EEC, there is some improvement in our position. But what faith can we have in that when we reflect on what the British Government did in respect of the import levy? That was a breach of all existing agreements and a breach of those agreements illegally without any consultation or even without notice. They imposed a levy on imports and the most remarkable fact is that this Government, in the course of its discussions, did not even seek the withdrawal of the penal import levy. These penal provisions are being accepted in this Agreement, when they are not entitled to continue while the present balance of payments difficulties exist. How can anyone assert here with the confidence and enthusiasm the Taoiseach showed a few moments ago that we have achieved some substantial improvement in the light of the plain breach of faith we have experienced in the past 12 or 14 months on the part of the British Government, not another British Government but the British Government presided over by Mr. Wilson? We know he has mesmerised the House of Commons and the British electorate but apparently he has also mesmerised the Taoiseach.

I want to advert to the very serious problems concerned with dumping and to bring before the Government and the country the necessity for the most careful legislation allowing for effective action to be taken in advance of threatened injury and not action when injury has resulted and damage has been done. The Article dealing with this—I think it is Article II—deals with the problems which could be of crucial importance for Irish industry, especially in view of the size of most industrial units in this country, the difficulties created by close proximity to a more powerful industrial country and the fact that under this Agreement Britain will have the right to export goods to this country on much easier terms than heretofore. The clauses in the Agreement purporting to provide safeguards after 1970 are quite inadequate. The problems created for industries by dumping cannot be over-emphasised and the need to take immediate action, not after the damage has been done but to prevent the threatened injury, must receive paramount consideration.

At paragraph 165 of the White Paper there is an indication that comprehensive legislation is being prepared which will ensure effective safeguards. That sort of phraseology is the usual type of phraseology used in White Papers of this sort and used by Government Ministers when they want to create the impression that they are doing something. Previous experience does not warrant confidence in the Government's approach to this matter or indeed confidence that the Department of Industry and Commerce is alive to the catastrophic effects which dumping would have on a great many Irish firms and the consequent unemployment of workers. I have heard the very deepest concern expressed by industrialists that the draft legislative proposals to deal with dumping are still not nearly adequate and are largely concerned with curing the disease after the patient has died.

This particular problem, which has caused so much concern amongst industrialists, has also caused concern to the trade unions. Very serious problems of unemployment must arise if adequate provisions against dumping are not made. I want to suggest with all the vigour and gravity I can that this problem should be considered in consultation with representatives of industries likely to be affected, some of which have already submitted detailed memoranda, representatives of the trade unions as well as the effective Government Departments under which a special committee might be set up comprising representatives of the industries affected, or likely to be affected, the trade unions and the particular Departments. This committee should have the right to decide what prior action should be taken regarding the importation into this country of dumped goods and have the right to exclude, except under permit, dumped goods or goods operating under unfair trade conditions. Those who wish to import particular commodities would be obliged to submit all details concerning prices and costings to the committee. The committee would have available facts and information and would thus be in a position to decide whether or not the price quoted was fair and reasonable or a dumping price. The general policy of such a committee would be to issue permits for imports so long as prices quoted were fair. The approach would not be to prevent imports but would be to ensure that such commodities or articles as were brought before it, or which came to their notice, were imported at prices which were fair and did not contain any element of dumping in their structure. It is imperative that legislation dealing with this should be so framed as to prevent threatened damage or injury to Irish industry. Remedial action or the imposition of penalties after the damage has been done would be no solution and would provide no relief for those unemployed as a result of dumping.

I had recent evidence of two large firms, both having connections with large British firms. One, and possibly both, received industrial grants here. Both of them had been in negotiation, had discussion and had, in fact, purchased commodities sold by an Irish firm. They sought permission to import similar commodities from elsewhere although there was a 20 per cent duty on the commodities. Subsequently, as a result of discussions with the Department of Industry and Commerce and all the parties concerned, permission was given for licences for the import of the particular commodities at something less than 50 per cent of that which was originally requested. Although, in this particular case, after full examination of the commodity being supplied by the Irish firm, after tests carried out in the presence of Department of Industry and Commerce officials and representatives of the other firms concerned, these two firms imported, without notice to the Irish supplier, goods and commodities which cost eight per cent more than a similar commodity produced by the Irish firm.

The danger of that situation is that if action is not taken in advance to prevent it, with the gradual elimination and reduction of tariffs here, with the obvious increase in the tendency of British firms to get a larger and larger share of the Irish market, many Irish firms which will become fringe associates of British firms must, faced with competition elsewhere or with any pressure which the British firms feel, find themselves either put on short time or closed down. I believe that these examples, of which full details are available in the Department of Industry and Commerce, indicate the real gravity of the situation from the point of view of industrial firms and the danger which must be guarded against in respect of dumping and unfair competition.

The Taoiseach dealt at some length with the negotiations in the European Economic Community and in this connection neither what he said nor what is contained in the White Paper is satisfactory. There is absolutely no evidence that any real effort was made to negotiate either membership or some form of association between this country and EEC.

Deputies

Hear, hear!

Mr. Cosgrave

Even the phraseology of the White Paper is vague and indefinite. It says at paragraph 128 on page 41 that it was clearly established, however, that there was no possibility of a bilateral exchange of preferences, except within the framework of the Community's customs union, participation in which would involve the application of the Community's common external tariff to imports from third countries. It said it was clear also—note the indefinite phraseology—that there was no disposition on the part of the Community to agree to any modification of obligations, and so on. It then says that the Community, however, preferred that any such negotiations should take place in a multilateral context such as that provided by GATT.

In that connection, who suspended work on our application to join GATT? The Taoiseach now says we are going to re-activate or revive it. It was suspended on our application and the Taoiseach asserts here that "there was no disposition..."

So far as Austria is concerned, my information from representatives of this Party who attended at Brussels, is that the one country they do not want to hear any mention of is Austria because they have been agitating persistently and consistently over a long period to get some form of association and some form of agreement and so far as one can gather they have now succeeded in reaching some conclusions on this matter. It is true that Greece and Portugal both got extended terms.

I freely admit that our industrial development and general economy would be regarded as much more advanced than either of these but surely there was some in-between arrangement which would have been possible? The Taoiseach described it as foolish to contemplate anything like the Austrian approach. Can the Taoiseach or the Government say what real effort was made? The Minister for External Affairs went there in November, 1963; then officials went and the Minister for Agriculture on his way to or from Berlin for a completely different objective, called to Brussels to the Community. He was not sent specifically and I assert he had no directions and made no formal application in respect of this country, and if the Taoiseach can contend to the contrary, we ask him to publish the documents setting out the application or claim and the manner in which it was pursued in respect of our application.

It is common knowledge that we are more interested so far as international affairs are concerned and this vital matter of EEC, in the United Nations and something that happens in Timbuc-too. The Minister for External Affairs has only once gone to Brussels to the Community: the invitation to address the Council has come to the Taoiseach at this stage. There was some rumour last year that he was to come to the Council of Europe and speak there but apparently that invitation did not materialise. It is not without significance that no real effort was made to pursue our application for membership or secure some form of alternative arrangement. There is this advantage and distinction between EEC and the arrangement that has been negotiated: in this, whether we like it or not, we are not the dominant party: we are but a small country beside a powerful industrial country with large exports. We may leave aside whether the British economy is as strong now as it was in the past because it is still a powerful industrial economy. We know from experience in regard to the levies that we are not an equal unit or an equal partner in the arrangements. The Community institutions provide safeguards which are designed to provide for the needs of small countries as well as for great and in that we would be one of a number of small countries, while in this case we are obviously the weaker partner.

A good deal of reference was made in the Taoiseach's speech and he was liberal enough, in that respect, in praise of his colleagues and officials and of Mr. Wilson and his colleagues. We do not object to that, but I think in his remarks he adverted to the fact that when the Conservative Government were in power, there was no disposition to have such an Agreement because of the possible political situation and the uncertainty of the Government at the time and the fact that the Macmillan administration was coming to an end. Is it not equally obvious that in the present political situation in Britain the Government is not unmindful of political considerations? It is equally obvious from past political experience and assessment that the Irish vote is an influential factor and has never been unfriendly in Britain to the Labour Party and that Mr. Wilson and his colleagues probably had some of these factors in mind when these negotiations were conducted. Small parliamentary majorities, as we know from our experience in this House, make people very susceptible to the political winds.

The situation we are concerned about is that in the arrangements that have been made and particularly the arrangements in respect of agriculture, the present deficiency payments system has only been provided in respect of a limited amount of carcase meat, both beef and lamb. Here it is important to advert to the Conservative Party approach in Britain to this matter. When Mr. Heath recently announced certain Conservative policies, he said that the Conservatives had two priorities in agriculture, to maintain an efficient and competitive agricultural community making its own contribution to the balance of payments and getting a fair return and to shift the emphasis gradually from more commodities from support by deficiency payments to support by import control.

The NFA in their remarks on this Agreement expressed concern at the fact that there was an absolute limitation under the clause dealing with carcase meat on the quantity for which the British Government would be liable to pay deficiency payments. They also adverted to the fact that in this Agreement a great many of the phrases associated with different Articles of the Agreement provide for consultation, provide for discussions or state that the British Government "take note of" the targets in the Second Programme. "Taking note of" in international agreements means damn-all. We all know that from experience. It means absolutely nothing. Even when the actual terms were in the Agreement they refused to honour them. Why are they likely, in the case of vague phrases like "take note of" and "aim to", to do any better? These do not mean anything. The significant thing is that according to the NFA statement, it is expected that by 1969 or 1970 there will be available here over 100,000 tons per annum of carcase meat for export. What arrangements have been made to provide a market for the surplus over and above the 25,000 tons which are being provided for in this Agreement?

In respect of butter, we get 3,000 tons more than was provided for in the 1948 Agreement, which is nearly 20 years ago, and any future increase in that is both vague and uncertain. There is no absolute guarantee either in the Article itself or in the letter from the Minister for Agriculture of any increase in that. There is a reference to the fact that they aim to deal with it.

In the case of bacon, the quota is slightly above—I think 1,000 tons—the quota that was fixed in the 1948 Agreement. In the 1948 Agreement the British Government undertook to import bacon at the annual pre-war rate of 27,000 tons "or more if it is available". In respect of butter, they undertook to import butter from Ireland at the annual pre-war rate of 20,000 tons, "or more if it is available".

The Taoiseach

How much was exported?

Mr. Dillon

All we had.

Mr. Cosgrave

Two ounces a week was the ration. In 1948, we changed that. We provided adequate supplies of butter for our own people, and over and above that we sold all the surplus there was.

The Taoiseach

You had none to export.

Mr. Cosgrave

What is the position now?

The Taoiseach

You could have put in 200,000 tons. It would have come to the same thing.

Mr. Cosgrave

There is a great claim made that this Agreement gives us unlimited access. With the exception of bacon and butter, and then only for a very limited period, was there ever any restriction in respect of orderly marketing? This is merely changing the phraseology to satisfy the susceptibilities of the Ministers who went to negotiate and to create the impression that we are getting some advantage over and above what was there. We have expressed the view that we are in favour of exporting, or aim to export, 638,000 head of cattle— the same as was exported in 1964, which was regarded as a good year but not as good as two years during our period when we exported over 700,000 cattle.

It is time that we wiped out from this Agreement and from the speeches in connection with it the exaggeration, the claims of advantages that are not in it for the future, either remote or immediate. The only way in which we can get advantages out of this Agreement is to examine it critically, carefully, detachedly and, having examined it, to see what steps can be taken to strengthen the economy to overcome the disadvantages and to avail of whatever limited advantages that are in it.

Our approach to this Trade Agreement as, indeed, to all trade agreements, is realistic. With all its defects, as we said earlier, we are not prepared to oppose it but we are concerned, as I have said now, with over-optimism. It is important to bring home to the country, probably most of all to the Government, the measures necessary to minimise the effects of the weaknesses of the Agreement, to curb, as I have said, the disadvantages and to exploit its advantages.

Our approach to industrial policy has been based on positive and not negative measures—the establishment of the Industrial Development Authority, the measures taken to attract foreign investment. I want to bring the House to remember the visits which Mr. Dan Morrissey as Minister for Industry and Commerce made to the United States of America, the visits and promotion campaigns which the late Deputy Norton made to attract capital to this country and which received a good deal of criticism; the introduction by the late Deputy Norton of the Industrial Grants Act; the tax concessions introduced by my colleague, Deputy Sweetman, in 1956, and which have been described as the biggest technical factor in the growth of industrial exports. All of these were positive measures. They did not erect tariffs or quotas to protect inefficiency. The greatest critic of the inefficiency in this country at the moment is the Taoiseach. The inefficiency was created in many cases behind wholesale protection. Having built up industries, having provided employment, having given people the impression, in fact convinced them, that their employment was dependent on a measure of protection, they having committed themselves and their families to work in these industries, we are entitled to say that you cannot disemploy them or worsen their position without taking appropriate action either to compensate them in a monetary way or to transfer them to other employment where and whenever it becomes available.

Ten years is a short time in the life of a country, particularly where industry is concerned. It is a pity, as we said earlier, that these negotiations were so mistimed, that the Government had not yet created the necessary machinery. The Taoiseach was critical a few moments ago of the fact that industry had not prepared itself, the fact that opportunities had not been availed of either in GATT or otherwise. Who was responsible for not gearing industry to prepare itself? Who was responsible for suspending the processing of our GATT application?

We want to say that we believe that ordinary measures will not do to gear industry and to gear the country to meet the problems created by this Agreement and by the advent of the European Economic Community. The maximum possible encouragement by means of the right incentives must be provided. First, industry must be given something like a ten year tax holiday. At least, the exporter should be given not merely the export tax remission which he at present enjoys but also the further concession of a double subtractional set-off against tax on all advertising and other promotional costs incurred in the building up of foreign trade, a subtractional set-off which could be carried forward to be set against future taxable profits.

Secondly, the battle for Irish industry will be largely a battle of good management. We cannot afford a tax system which taxes, as our present system does, incomes of managers in Ireland more severely than the taxation that managers would have to pay even in a country of high taxation like the United Kingdom. I am aware of cases where people have considered coming back to this country to make their talents available for the building up of the country but, when they examined the tax structure and took advice, they found that they could not afford to make the move.

In that connection, it is important to reflect on the adverse effects which the taxation that was introduced in the last Finance Act may have on businesses in this country. The aggregation of insurance policies with other free estate must have a penal effect not merely on industry but on agriculture and on farms and is certainly detrimental and will provide no incentives, will provide nothing to attract businesses here or even to maintain at the appropriate level existing businesses or firms.

Thirdly, I do not see why export tax concessions should be enjoyed merely by the promoters of industry. They should in some manner be extended so that, in effect, higher remuneration would be enjoyed by those people whose efforts were directed towards building up the country's foreign trade. In that connection, we negotiated a number of trade agreements with European countries. In many cases time has eroded the benefits of these agreements and circumstances have changed. There is an obvious obligation on the Government to pursue similar arrangements with individual countries, if they cannot pursue them in the context of the EEC, in order to secure markets and outlets, particularly if we are to sell the increased numbers of cattle that are likely to be available and the increased quantities of carcase beef over and above that quantity which the limited concessions secured in this Agreement will allow us to sell in Britain.

Fourthly, some of the costs of Irish industry such as power and freight are not competitive. These must be made competitive to give Irish industry a chance.

Fifthly, industrial development should be given absolute priority in town planning and a directive should be issued to accelerate all proposals for industrial expansion and development.

Sixthly, and this is important in the context of what I said earlier, firms here particularly firms in receipt of Government assistance or State help in one form or another, and Irish consumers must be made resistant to dumping and foreign competition and something analogous to the export tax concessions enjoyed by industry should be given to retailers whose profits are derived from selling Irish manufactured goods. With measures similar or analogous to those, I believe it is possible to gear this country to meet the competition and deal with the problems inevitable if the tariffs and other protection, which this Agreement will see the end of, are not to place Irish industry in a very serious position.

We have given this Agreement the most careful and anxious consideration. We have, as I have said earlier, approached it in a realistic fashion. We believe that, in the national interest, it is better, however defective, however imperfect and however vague many of its provisions are, that we should endeavour to exploit the advantages in it rather than try to exploit, for Party political advantage, the disadvantages in it. That is the spirit in which we approach this Agreement, the spirit in which we approach the problems of our time, and that is the spirit in which we recommend to the nation energetic public service, national self-endeavour and the subordination of national partisan interests to the national good.

Deputies

Hear, hear!

Mr. Cosgrave

At this juncture, I believe it is only right that some reference should be made to the very serious problems that have arisen in the field of industrial relations. It was extraordinary that, in presenting an Agreement of this sort, an Agreement which affects the economic life of the country, both industrial and agricultural, and which must affect employment in the country, no reference was made by the Taoiseach to this problem. I know this is a difficult problem. I know that any words used in reference to it can be construed or misinterpreted, but I think that in this regard both employers and trade union representatives have an inescapable obligation to subordinate their interests to the national interest and the rights of the country as a whole are superior to those of any particular section. If we are to make the country prosperous and justify the claims those who went before us made to secure economic freedom for us, then we must, no matter what the cost, subordinate personal, sectional and other interests to the national good.

Deputies

Hear, hear!

Mr. Cosgrave

Our people are quite capable of rising to all the challenges they meet if they are well led and the right policies applied.

Mr. Corish

I move:

To delete all words after "Dáil Éireann" and to insert the following:—

is of opinion that 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, copies of which have been laid before Dáil Éireann, represent a balance of advantage to the United Kingdom in that they do not provide adequately for agriculture and will lead to a reduction in industrial employment and an increase in emigration.

One would imagine from the way in which the Taoiseach spoke that this was either his first or his second year as Taoiseach of an Irish Government. One was rather amused when he told the Dáil and the nation once again that opportunity was once more knocking. I heard that phrase from him many years ago. It has always been said by Fianna Fáil that, as far as this country is concerned, opportunity always appears to be just round the corner.

I regard the negotiation and completion of this Agreement as one of the most vital things that have been done and one of the most vital decisions with which this country has been confronted since we adopted a policy of protection. This represents a very serious departure from the pattern we have been used to down through the years, and particularly the pattern under Fianna Fáil. This Agreement must have been contemplated over a fairly long period. I was somewhat surprised, however, when the Taoiseach said his first approach was made in 1963. I believe he could be accused now of concealing a tremendous amount of important information from the Dáil and the country over the last two or three years.

There was no mention of free trade during the last general election. As a matter of fact, there was no mention by Government spokesmen about our application for membership of the European Economic Community. The forced determination and whipped-up enthusiasm of the Taoiseach today demonstrates how important he considers this Trade Agreement. Yet, though the free trade area was mooted two-and-a-half or three years ago with Great Britain, the Taoiseach did not think it worth his while to have discussions with representatives of important sections of the community, with the farmers, the trade unionists and the industrialists.

As Deputy Cosgrave said, he denied the opportunity to Dáil Éireann to have a preliminary discussion. The approach was very different from that in relation to the EEC some four or five years ago when there was a full discussion in Dáil Éireann. Workers, farmers and industrialists understood so far as they could the implications of membership of the European Economic Community. But, even after the Taoiseach's speech today, even after the articles that have appeared in the newspapers and the Taoiseach's interview at Dublin Airport, and despite his interview for three-quarters of an hour on television, I do not think it is correct for him, or anybody else, to say that the people of this country fully understand the implications of this Trade Agreement with Great Britain. He has, I think, done the country a disservice—his is, I believe, the responsibility—by insisting on an earlier sitting of the Dáil than was requested by the two Opposition Parties. I remember—indeed, I am quite positive of this—informing the Taoiseach that I believed there should be at least another week——

Mr. Sweetman

We said the 11th.

Mr. Cosgrave

We did not object to the 4th but we said the 11th.

Mr. Corish

This Trade Agreement was completed approximately ten days before Christmas. No matter how important it is, as far as the people are concerned there are much more important things where Christmas is concerned, and it would be ludicrous to suggest that the people would concern themselves with a document of this kind over the Christmas period. I believe the Taoiseach did this deliberately.

The Taoiseach

The debate was fixed at the Deputy's request.

Mr. Sweetman

That is quite untrue and, if the Taoiseach looks at the debate, he will see that it is untrue.

Mr. Corish

At any rate, no real opportunity has been given to the people to study and appreciate fully the implications of this Trade Agree-member—indeed ment. Unfortunately, they will have plenty of time to think about it when it will be, in our opinion, too late.

The conclusion of this Trade Agreement arose out of discussions on the British import levy, although the Taoiseach has announced now that he has been trying to negotiate free trade with Britain since 1963. Despite what he says, would there have been any talk at all about free trade but for the imposition of the import levy, the levy which we were told was to have such an adverse effect on our exports to Britain? We can well remember the indignation of the Taoiseach and his Government when this import levy was imposed. Did the Government consider the import levy a good excuse to discontinue the global reductions of ten per cent per annum in our tariffs?

In any case, we are told now that we have concluded a Free Trade Area Agreement with the United Kingdom. We are conscious of the fact that this has been negotiated by a Fianna Fáil Government, and without consultation. Despite the attitude of Fine Gael, we do not propose to take any responsibility for this. The Taoiseach admitted today that it was he, as Taoiseach of an Irish Government, who sought this Agreement. Earlier he was reluctant to make that admission. Whether he entered into this Agreement as a good agreement or as an exercise in preparation for entry to the European Economic Community, we do not know. We can see that free trading conditions are coming in this part of the world but we do not know whether it will be absolute free trading or whether it will be conditional in its final stages.

That is the thing that concerns the Labour Party. We believe the Taoiseach, despite what he said in his speech, has not made sufficient efforts to ensure that the special position of this country is protected for the sake of those who get employment in it. We know we cannot remain in isolation all the time but, again because of our special conditions, we should not assume that because we are an independent country we can compete on equal terms with countries such as are in the EEC or with the United Kingdom.

We do not believe that the Government have been consistent in their approach to free trade, and we do not believe that they have used the best judgment in their whole approach over the last five or six years. I think it is correct to say that there has been an element of confusion and uncertainty amongst all sections as to where we are going because the Taoiseach has changed his feet so very often. He tried to explain today the history of the approach of his Government towards free trade. We remember in 1960 that he rejected the idea of EFTA. Now, according to himself, he sought admission. We remember the Taoiseach insisting on many occasions that we would be in the European Economic Community by 1970. He still cannot say that in 1966, but it must be remembered that the Taoiseach insisted that our application for membership of EEC was independent of Great Britain. There is every sign on this agreement that it was made to allow this country to make application and subsequently to become a member of EEC with the United Kingdom.

It is valid comment to say that the Taoiseach was wrong in refusing to seek association with EEC. I do not say I quote his actual words but in the debate on the Trade Agreement in 1960 he did make reference to the fact that this country was regarded as one of the under-developed countries in Europe. If that is so—and I do not think there has been a tremendous improvement even though there has been some since then—we still should and could negotiate better terms than absolute membership which the Taoiseach seems to regard as imperative for this country.

There is uncertainty and confusion in the matter of discontinuing tariff reductions with other countries apart from Great Britain as a preparatory exercise for membership of EEC. The Taoiseach said at that time about three years ago that this was a vital exercise. Is it not now vital that we should make these reductions with other countries and not with Great Britain alone in order to fit us for membership of the European Economic Community? The Taoiseach has adopted this same pose today. He has approached the whole business of free trade as if we could by physical effort or by pious resolution compete with countries that have an industrial tradition going back four or five times as long as the industrial position of this country. I think it is valid criticism to say that the Government are not taking and did not take the necessary steps to prepare us for the situation in which we shall find ourselves very soon as a result of this Trade Agreement with the United Kingdom.

Exhortation to Irish industry is not enough. More Government action is necessary. The Taoiseach has, in his speech last night, given some hint that the Government would take stronger action in relation to industry and the establishment of industries. I do not think he will deny that for years the Labour Party has been advocating that the Government through the various Ministers should take positive action as far as the establishment and the promotion of industry is concerned.

We do not believe this is a free trade agreement in the sense that there is equal advantage or nearly equal advantage for this country. For that reason we put down this amendment. We believe the balance of advantage is in favour of Britain. We also believe, despite what the Taoiseach says, that the present British influence will be increased to such an extent that it may become dominant in this country as far as our industry is concerned. This Agreement will bring us to a stage that obtained in Ireland so many years ago and for so very long when we had a fair measure of free entry for agricultural goods to Great Britain and when there was free access into Ireland for British goods. We thereby became suppliers of cattle, so that we were forced to introduce protection in order to preserve and establish Irish industry here.

There are very many greatly exaggerated claims made for this Agreement. An interview was given by the Minister for Agriculture. There have been several statements from the Taoiseach. However, this Agreement should be judged as a trade agreement and we should, as against what the Minister for Agriculture does, judge it not alone in terms of pounds, shillings and pence but in terms of people. It should be judged by its effect on emigration and unemployment. All our policies, internal and external, should be directed towards keeping Irish people at home in secure and well-paid employment. This Agreement should be judged by its long-term effect and not by any immediate advantages alone.

We concede that under this Agreement the outlet for certain agricultural products has somewhat improved. We welcome this for the agricultural community and trust that all sections of the agricultural community will benefit. We trust that those who are employed on a wage basis will also benefit from this Agreement but we are doubtful if they will. We are also doubtful if it will provide any worthwhile advantage for the small farmers. The emphasis in regard to agriculture is on the export of store cattle, and the raising and export of store cattle is not associated with the small farmer. It is not associated with the man who has ten, 15 or 20 acres but with the big farmer.

We appreciate that the concessions on the agricultural side will contribute to solving our balance of payments problems and will continue to assist in that in future years. It is stated that as far as cattle, beef and certain other items are concerned, agricultural income will increase, but I want to ask this direct and simple question, maybe too simple for some people, in regard to all these agricultural advantages. Could the Taoiseach or any member of the Fianna Fáil Party tell me will it mean there will be one more man employed in that industry? I do not believe it will and that is why we say that, while we welcome any worthwhile benefit to the community, to the country, this is a concession, welcome though it may be, that will not give any extra employment where it is needed so much.

This country cannot be said to be rich in natural resources. Even compared with Britain, we cannot boast of many natural resources and, apart from our principal one, which is a surplus of workers, our main one is the grass we grow and the cattle we raise therefrom. I wonder should we be prepared for all time to export, without any processing whatsoever, this important natural resource. Are we required to export as many cattle as we can on the hoof? There has always been agitation in the Dáil to establish as many industries as possible connected with agriculture. We have not made any great progress in that respect.

If we are to utilise our natural resources, particularly our principal one, our cattle, we should be prepared to process more and more, to employ more and more at this processing, and then to export the product instead of allowing other countries to process it for us. The claim in respect of agriculture in this agreement is that there is free access to Britain. This was stated by the Government Information Bureau on the night of 14th December last. Still, when we examine the agreement as far as agricultural commodities are concerned, we find there are restrictions. There are restrictions in quantity but above all, there are restrictions in respect of the length of time during which the agreement in respect of these commodities will obtain.

The statement on 14th December said that all our pigmeat can be exported but, of course, not all our bacon. That is a pity. Bacon is much more valuable to the producer than is pork and the bacon quota does not provide any great advantage to the country. In regard to exports of butter, as Deputy Cosgrave said, here again we are subject to quota restrictions. It is proposed to increase the quota from 12,900 tons to 23,000 tons but, as has been pointed out, the present effective quota is 19,000 tons. Therefore, the advantage in practical terms is a mere 4,000 tons per year and that applies only to March, 1967. I wonder will the Taoiseach and the Minister for Agriculture tell us what will happen after that because, as far as I can see, the Agreement does not provide for an increase in the quota.

The Irish Government statement on 14th December, as distinct from the British statement, gave the impression that the butter quota would be reviewed upwards at the end of the period. The British Government stated that they would keep in mind the possibility of reviewing it upwards. Surely that is not the terminology one would associate with a trade agreement of this kind. I admit that the present butter quota will absorb our present production, but if the cattle population increases, as is anticipated, our butter production will rise and there must be a guaranteed outlet for it. However, according to the terms of the Agreement and the stated intentions of the British Government, it does not seem that we will have an outlet for the extra butter we shall produce when our cattle population goes up.

The Taoiseach boasted that store cattle, sheep and lamb will have unrestricted access to the United Kingdom. This has always been so in practice, if not in theory. It is true that the British Government could control it but they have never invoked that control and have never had any intention of invoking it. Again, and this must be cleared up by the Minister for Agriculture, the Agreement stipulates that this unrestricted access will operate up to 1970. What then is the effect of Article 8, paragraph 3, of the Agreement to the effect that if the United Kingdom introduces an import price system through price levies, there would be a review in regard to Irish cattle exported to Britain? Is that a saver for the British Government to get out of the Agreement in this respect and treat us as any other country? It is also stated that the Irish Government undertake to the best of their ability to export 670,000 cattle to Britain. From recent speeches by the Minister for Agriculture, I assume we can fulfil that part of the Agreement. We have heard from the Government on many occasions about the possibility of alternative markets. If there are more attractive markets in Europe, are the Government under any obligation to take any steps under the terms of the Agreement to see that all our cattle will be diverted to the United Kingdom?

Can the Taoiseach and Minister for Agriculture tell us whether the Agreement in respect of cattle can be or may be upset if we become members of EEC? As far as carcase beef is concerned, there is a quantitative restriction to the extent of 25,000 tons of carcase beef and a similar restriction to the extent of 5,000 tons in respect of carcase lamb. We are told the full guarantee payments will be made in regard to fat stock but there is mention in the statement issued by the Department of External Affairs that deficiency payments in regard to carcase beef and lamb will be disposed of by the Irish Government in agreement with the British Government. This appears to me to be an extraordinary clause. If this deficiency payment is to be given by Britain to the Irish Government, why should there be any consultation with the British Government as to how it is to be disposed of?

Mr. T.F. O'Higgins

Hear, hear!

Mr. Corish

If this is part of the Agreement, why should there be any interference? It appears to me to be the thin end of the wedge. I do not suggest there was an ulterior motive on the part of either side but somebody ought to clear it up because it seems to me we have got to a ridiculous stage when some other Government can tell us how to spend money.

Mr. J. Lynch

The Deputy agreed to that in connection with Marshall Aid.

Mr. S. Dunne

It was a present.

Mr. J. Lynch

We have had to pay it back since.

Mr. Donegan

It was a flea on an elephant by comparison.

Mr. Corish

The Agreement provides for consultations, for discussions. About what? Are the British Government to advise the Minister for Finance on the kind of Budget he will have?

Mr. J. Lynch

We may advise them.

Mr. Norton

Better advice than the Minister got in the last Budget.

Mr. Corish

There is a provision to the effect that in the event of any significant increase in broilers or turkeys, the United Kingdom may export to Ireland. Is there to be an influx of British broilers and turkeys into this country? In any case, so far as I can see the benefits to agriculture are very much exaggerated. There is absolutely no free access in July, 1966, and there is no indication in the Agreement that there will ever be free access under its terms. It is true that we can protect the agricultural goods included in Annex A, with the exception of broilers and turkeys, but these goods listed in Annex A are of no particular significance.

I do not think this is a free trade Agreement for agriculture. The Taoiseach must concede all the restrictions that are there in respect of cattle, butter, bacon, sugar and cereals. Those advantages were supposed to compensate for the damage to Irish industry. There is a financial benefit. There is a benefit so far as the balance of payments is concerned, but again—let me stress this—unless the Taoiseach can show that I am wrong, as a result of this Agreement there will be no increase in employment. There are vague provisions for changes in the conditions of trading but there is nothing specific. This Trade Agreement has been worded in a very loose fashion so that it can be interpreted, particularly in regard to agriculture, to the advantage of the British Government. It talks of "aims" and "desires" and "having regard to the Second Programme for Economic Expansion,” but there are no specific promises that in respect of these agricultural items, there will be a revision upwards after a certain period and the freer access that is boasted of by members of the Fianna Fáil Party.

The British agricultural industry is heavily subsidised and protected and we will not be allowed to encroach. That has been made clear in this Agreement. It is thus far and no further, for Irish agricultural exports to Britain. In return for a limited advantage for Irish industry in this Agreement, we find that we will eventually open our home market to the United Kingdom. There will be no new export market except for one particular commodity: cloth which contains man-made fibre. The hand of the clock has certainly gone fully round.

The Taoiseach was Minister for Industry and Commerce for a long time and he cannot evade his responsibility for what happened to Irish industry. He can take a lot of credit for building it up—I do not think anyone can deny him that—but when one has regard to the situation today, one must also remember the deficiencies of Deputy Seán Lemass when Minister for Industry and Commerce. Up to 1930 we had some old and traditional industries that thrived, despite competition from outside markets, particularly in Britain, but these were few and far between. It was recognised in the 1930s that industry would have to be built on protection. That was the accepted policy of the Fianna Fáil Party, and that was the policy that got them the votes which elected them to Government in 1932 and 1933. It was always insisted that this protection was meant to be temporary, but it was continued. The Taoiseach has been a member of the Government for 26 or 27 years out of the past 33 years. Listening to him today one would think this was his first major speech. He was bursting to go ahead, forgetting all the things he did not do in the past.

Mr. P.J. Burke

He never sold the Irish International Airlines.

Mr. Corish

He may have sold the Republic; we do not know yet. Some of those who enjoyed this protection believed it would last forever, and the Minister for Industry and Commerce did not disillusion them until four or five years ago. They honestly believed this protection would be there forever—and this was during a period, short though it may have been, when this country was contemplating membership of the EEC. Many of them were content with the home market, as managers, owners or bosses. They were prepared to live on the home market, and because they had the home market, they had no incentive to expand or to look for exports. The workers were lulled into a false sense of security. They are the concern of the Labour Party, not the people who were feather-bedded, not the people who made enormous profits out of Irish industry. We are concerned with the Irish workers who were fooled.

They are now being told that in four or five years' time—or certainly in ten years' time—there may not be a job for them because, they are told, Irish industry must face the open wind of competition with the United Kingdom. I do not believe Irish industry should be feather-bedded. I believe protection was essential for a time. I believe that it should always have been stated that that protection would go gradually. That should have been stated years ago, not now. I believe there should have been greater preparation for free trade conditions, for the sake of those in employment.

In the 1938 Agreement, the 1940 Agreement, and the 1960 Agreement with the United Kingdom, there was provision for a review of the protection of Irish industry by the Department of Industry and Commerce with the British Board of Trade. The Taoiseach was very conscious of this in 1960, because the debate on the 1960 Agreement which he and his colleagues brought back was one of the first debates in which free trade was stressed. In that debate the Taoiseach said a priority list for a review of tariff protection would be drawn up and that successful exports would be at the top of the list. Can the Taoiseach tell us has anything been done in that respect, apart from the ten per cent that was taken off?

Mr. J. Lynch

There has indeed.

Mr. Corish

I want details.

Mr. J. Lynch

I will give them.

Mr. Corish

I do not believe that review was carried out in an extensive way. It is obvious to everyone that there are industries which could have done without protection long before now—not a lot, but there are certainly some. In any case all import duties on goods from Britain will cease on 1st July, 1975. This throws open the entire home market to British manufacturers. As protection will go in ten annual reductions, the effect of the Agreement on Irish industry will be felt much earlier than 1975. I think, again, it is recognised that our tariff walls have been so high as to make it impossible for people to export as the tariff barrier goes down, and in five or six years' time, the effect will be seen, and certainly the influence of British exports will be felt to a very large extent. I do not think we should underestimate the value of this to the British exporter.

When I read in the newspapers the speeches of the Fianna Fáil spokesmen lauding this Agreement, I asked myself: "What did the British Government get?" The British Government are not fools. One would imagine from the Taoiseach's speech that we were getting a tremendous advantage in respect of agriculture, and that the British Government were voluntarily, without any return, helping us to prepare ourselves for membership of the EEC. Britain is a nation of approximately 50 million people. Some people would say that our market of three million people is not very big and that it does not make any difference, but the British are desperate for markets and a market of three million people would be regarded as a substantial contribution to the difficulties they have had in regard to their balance of payments over the past number of years. But if we should not underestimate the value of the Irish home market to the British exporter neither should we ignore the effect on the Irish manufacturer who has had the home market to himself for quite a long time.

I agree that the Taoiseach could not give the comprehensive review which must be given by his various Ministers but I heard him admit on television that some industries would be affected and that industries would close down. Of course that was not news for us but he said something which seemed very strange to me, when he was questioned by one of the members of the panel. In reply to a question, the Taoiseach said that it would be difficult to say what industries would suffer or would disappear. I think that was irresponsible coming from the Taoiseach. That is the reason why there should be consultation with the industrial and agricultural communities and the trade union movement. The Taoiseach goes to Britain to concede certain things to them and he says he does not know what industries would be affected. He signs this Agreement, he does not know what effect it is going to have, nor is he anything but vague about what is to replace these industries which are to go. I do not know whether the Taoiseach was joking but on one occasion he said for every factory that was closed down, five would spring up. Afterwards he retracted that and I am sure he was only "codding". I would like to know where are these factories or where are they coming from. If they are to come, they must come rapidly.

I want to assure the Taoiseach of this. We can appreciate the short term and immediate advantages but we have to look ahead as well. Workers will not remain idle in this country for very long. If a worker becomes idle, he is not going to wait any more than three or four weeks before deciding to go to Britain and, mark you, they are looking for workers, for a lot of workers, in Great Britain. Therefore, it is valid and reasonable to ask what plans the Government have to protect, not industry by way of tariffs, because this Agreement has been signed, but employment so that workers will continue to be employed in this country. We all know our own constituencies and many Fianna Fáil Deputies, apropos this Agreement, have thought and are thinking about their own constituencies. Many of them will be forced to admit that there are certain specified industries that are going to go. The only consolation they get from the Taoiseach is that for every one that closes down, five will spring up.

The Taoiseach, who is the chief signatory to this Agreement, will have to be more specific than he has been. We have not done so well already as far as employment is concerned. I concede that industrial employment has increased and has kept step with the forecasts in the Second Programme for Economic Expansion. Industrial employment is one thing, but we have to think about employment generally, having regard to the number of people who have been forced to leave the land over the past few decades. Under the Second Programme, we should have got 7,800 new jobs per year but we did not get anything like that. We got 1,000 jobs per year net. Does the Taoiseach think that there will be such a tremendous change in industrial employment, that there will be a change to such an extent that we can still achieve the targets laid down in the Second Programme when, between 1960 and 1970, we should get 78,000 new jobs? It merely means that people are going to leave the country, as they already have, in greater numbers than anticipated. We see that in the emigration figures which are produced from time to time, which show that rather than a decrease in emigration, there has been an increase in recent years.

Nobody has told us how this Trade Agreement is going to correct that situation. One of the advantages claimed for the Agreement and I believe that this was the sticky one, the only one got by agreement between the Taoiseach and the Prime Minister of Great Britain is that in respect of goods containing man-made fibres. This concession generally is good—it will give increased employment in certain branches of that particular processing industry—but let me tell the Taoiseach that as far as power weaving of woollens and worsteds is concerned, it may not be so good. In a report of the Committee on Industrial Organisation in respect of this particular trade published about four or five years ago, it was said that there were 26 power weaving mills in the country and that seven or eight of them would survive in the event of free trade. At that time 7,000 people were employed in the trade and today we still have the same number. But the CIO report said that 2,600 would lose their jobs if there was no re-adaptation and there has been no evidence since that report was published that there has been, or will be, such readaptation or reorganisation in that trade. Therefore if that is still valid, 2,600 people will lose their employment in that trade. The seven or eight factories that will survive will not employ any more. They will produce more because as far as my information goes, the machinery they have is capable of the increased production.

The Taoiseach referred to the motor car assembly industry but he did not give what appeared to me to be a satisfactory explanation about it. He did say that there would be consultations with the industry. I remember the Minister for Finance, then Minister for Industry and Commerce, telling us two years ago that there was consultation with the motor car assembly industry to see how they could readapt, join together, to provide alternative employment and there was no good result. As a matter of fact, there was no result which indicated that there would be an increase in employment. The Taoiseach said on television that the assemblers would be allowed to import cars, provided they employed the same number of workers. I do not know what he meant by that. This is rather vague for the thousands of people employed in this industry and for those in employment ancillary to that type of work. There are certain modifications on the industrial side that have been referred to already. These are merely softening the blow and will not have any appreciable effects on the industry generally because by 1975 there will be free entry. The Taoiseach referred to the difficulties in particular sectors and submitted that quantitative restrictions could be imposed in respect of industries that had any difficulties particularly in regard to employment, but this is only up to 1975——

The Taoiseach

Permanently.

Mr. Corish

Industries that cannot be helped by temporary relief will be reviewed after five years. As far as I know, some will not survive up to this five-year review provided for in this Agreement and it will not affect them in any advantageous way. The provisions in regard to dumping and subsidised exports do not appear to be binding enough to ensure that in dumping or in the export of subsidised goods, damage will not be done to Irish industry or workers. I should like to know the definition of dumping and subsidised exports. There is no reference to this matter and, as a matter of fact, there is no definition section in the Trade Agreement to give us any detailed information in respect of such things as dumping or subsidised exports. Will it mean that goods below the cost of manufacture or distribution of the same goods here will be regarded as dumped goods? In respect of dumping, when it is detected, quantitative restrictions can be imposed not to exceed three per cent of British imports to this country. There is not as yet any machinery for the detection of dumping of this kind. Until these matters are cleared up, Irish industry and those who work in it will not get much consolation from the Trade Agreement.

In his television appearance, the Taoiseach also referred to the importation of goods into British chain stores here. This certainly would seem to me to be tantamount to dumping, but, according to the Taoiseach on television, this was a problem that would have to be sorted out and for which there was no special provision in the Agreement.

I should also like to refer the Taoiseach to Article 14 which states that public undertakings—I assume that would mean CIE, local authorities and State bodies—cannot give preference to Irish goods after 1975 and cannot introduce new preferences for Irish goods even before 1975. The Buy Irish campaign initiated in November, 1964, can fold up straight away. If public undertakings, semi-State bodies and local authorities cannot decide within their own country to buy Irish, that is going a bit too far. That is an Article that need not have been accepted by an Irish Government. It looks as if it was dictated by the British Government.

In respect of balance of payments difficulties, we are told the Government may impose quantitative restrictions on imports, provided the measures are consistent with other international obligations. That is a phrase that occurs in the Agreement many times, but I must confess it does not mean much to me. It has to be elaborated on before we know what exactly can be done in respect of balance of payment difficulties. Article 18 provides that the British Government can propose other measures in order to solve our balance of payments problems. I should like to know what other measures are contemplated. I have not much idea what other measures another Government could propose to solve our balance of payments difficulties. That Article also needs to be explained in more detail.

It has been mentioned by Deputy Cosgrave that Britain retains the right to impose import levies. I suppose we have the same right. If we have balance of payments difficulties, could we not put on 15 per cent or 20 per cent tariff protection instead of going through this procedure of having to go across to Britain and saying: "Please, Mr. Wilson, we have balance of payments difficulties and what do you think we should do?" Did he come to the Taoiseach when he had balance of payments difficulties and ask the Taoiseach what he should do when he slapped on the 15 per cent? The Irish Government should at least retain the right to say, without consultation with anybody: "Here is our ten per cent or 15 per cent. Do what you like about it."

The Taoiseach should take note of the statement made by the Irish Congress of Trade Unions wherein they express their concern for Irish industry. It must be conceded they know something about the condition of our industry and the prospects for employment there. The Taoiseach should indicate what new steps will be taken to preserve that employment. The statement of Congress stresses the fact that by 1975, or somewhat before it, our home market will be wide open to the United Kingdom industries who are assisted by advertising and sales organisations in a pretty formidable way and a way certainly not within the scope of the smaller Irish units. This is one real danger, and again it is something in regard to which the Taoiseach did not give a very satisfactory answer in his television appearance.

Some time ago Deputy Tully had a Private Members' Bill down to provide for redundancy. The Taoiseach did not mention redundancy today. He admitted there is going to be displacement of workers, but he has not told the Irish workers what plans there are for retraining them or compensating them in the event of their losing their employment by reason of the operation of this Agreement. Deputy Cosgrave asked was there any fund such as that set aside in the EEC and contributed to by all members. Here we have to build up that fund ourselves. There is no indication from the Government that Irish workers who lose their employment will be compensated during any interim period.

The Minister or his Parliamentary Secretary when dealing with a manpower policy will be confronted with a huge problem of displacement of workers. I do not think it is an exaggeration to say that. They will be contronted with a problem of men, aged 50 or 55, who cannot be retrained, who do not want to leave their own home towns, who will be expected to travel to other places. In this matter we have to think in terms of the physical character of the country. There is no point in the Government deciding that, because two factories have had to close down in a particular spot, those disemployed can be sent to Waterford, Wexford, Dublin, Cork or Galway. We have important assets in all those towns. We should not run riot in any manpower policy to the extent of leaving derelict or underused the amenities in these towns—the schools, churches, shops, footpaths and all other amenities. That will be a big problem.

I have always given the Government credit for the assistance they gave towards the establishment of industry, but they must do much more than providing grants and exhorting Irish industry to avail of them. The Government entered into this Agreement and, therefore, they must take positive steps to provide industrial employment. They must think in terms of direct investment and of utilising the places we have. There have been vague announcements to the effect that certain centres in the country would be developed, but we have heard nothing more about it. If we are to depend entirely on private enterprise in this country, this Trade Agreement will play havoc. I do not know whether the Government are afraid of being accused of being socialist or of being too interfering. But I think it is legitimate to say this: if private enterprise do not do their job, there is a moral responsibility on the Government to do it. We have seen far too few industries established in this country, despite the number that have been established in recent years. We will have to have more direct investment through State bodies. We also could engage in the practice of direct investment with private enterprise. It is not enough to say: "Here is the money, if you come in." More positive action will have to be taken to ensure that industrial employment is preserved.

To sum up, as far as this Agreement is concerned it seems we are getting some improvement in our agricultural exports to Great Britain, but restricted both in quantity and in time. Britain, in turn, will have unrestricted access to the Irish market by 1975 and easier access before then as the years go by. The Taoiseach asked what was the alternative. He mixed it all up in what he described as the inevitability of our going into a Free Trade Area. The question put to the Labour Party is this: we have to do it in order to enter a Free Trade Area. I have conceded we are moving towards freer trade conditions, but I say the Government are going in too easily. Over the past five or six years, the Taoiseach seemed to be bursting to get into some sort of a Free Trade Area. He talked about the ability of this country to stand up to anywhere in Europe. As far as morale is concerned, as far as the ability of our individual workers is concerned and as far as the country generally is concerned, we can. When it comes to physical resources, to know-how, to industrial tradition, we have no right to pose as mighty as Great Britain, France, Belgium or Germany. We should understand our limitations.

The Taoiseach should not have gone across and got so little and given back so much: that is our criticism of the Agreement. That is why we believe it will have an effect on emigration and employment. The Taoiseach said they sought more but did not get it, thereby admitting that, if it had been a fair agreement, he would have got more. He was content to come back and to say, in effect "This is all I have got" and every section of the community and every Party are expected to say "Well done, you did your best." Your best was not good enough, in these circumstances. If this agreement means that we shall have unemployment and emigration then, in turn, it will mean that we need not go into the EEC because they will not want us: it will mean that we shall be regarded as a cattle ranch for EEC or Great Britain.

There is no point in having one section in this country rich, benefiting from some particular aspect of a trade agreement, when other people have to go out of it. The ambition should be to increase the population here and to increase employment here. Unless the necessary steps are taken to ensure that Irish industry will be built up and will survive, I think untold damage can be done.

We have an amendment down here and Fine Gael have an amendment down to this motion. We believe in the terms of this amendment. We believe that the agreement can do damage. I do not want to preach to the Fine Gael Party but I would point out that they have condemned this as a bad agreement not alone at their Press conference but in the speech today by the Leader of the Party, Deputy Cosgrave.

The actual phraseology of the Fine Gael amendment is:

To delete all words after "Dáil Éireann" and to insert the following:

",while approving 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, is concerned with the inevitable effect of the freeing of trade on employment and emigration and deplores the fact that the Agreement as negotiated is unbalanced and that the concessions obtained are small in the immediate future and limited and insecure thereafter."

I do not want to tell Fine Gael what to do. We believe a lot of what Deputy Cosgrave said, but, because we believe it, we believe it is our bounden duty to vote against the Agreement. I do not think we should have recourse to such spurious phrases as "national unity". I do not think the Taoiseach is concerned whether he gets the support of certain sections. Fianna Fáil will stand by this Agreement. Because the Labour Party believe it is a bad Agreement, we shall vote against it for the reasons outlined in our amendment, that, because the Taoiseach has given away so much, there can be much unemployment and much emigration here.

Minister for Industry and Commerce (Dr. Hillery)

Deputy Corish seemed to think it was irresponsible of the Taoiseach not to be able to forecast what industries, if any, might go to the wall in conditions of freer trade. I should like to point out that the survival prospects of our industries depend so much on matters in the hands of the people involved in industry— on adaptation, on the removal of restrictive practices, on the prospects of our being able to put our house in order in the field of industrial relations and on our ability to maintain competitive costs—that it would not be possible for anybody to forecast which industry will not survive in conditions of free and fair trade. What we do believe and what we do know is that, given a clear-headed appreciation that nobody owes us a living, and the will to succeed, Irish industry has very little to lose and a great deal to gain in this transition from the old position of protection to the newer position of fair competition.

One is inclined to start off by assuring people that, in the wider trading groups established in Europe, the smaller industries found that their anxieties beforehand about their prospects of survival were not well-founded. I started my work this year by arranging that the officers of the Department of Industry and Commerce would, if possible, redouble their efforts to get Irish industry into fighting condition through readaptation, and the Industrial Reorganisation Branch of that Department, which has been working over the years to this end, is already in the process of bringing a sense of urgency to the work. Having started in that way, and seeing the healthy response of the Federation of Irish Industries to this Agreement, I felt it might perhaps be going back a little to have a prolonged inquest, either here or in the Press, on what might have been or could have been better in the Agreement. In the balance, however, I think it is good to have a full discussion of it so long as we realise that this now is the trading position in which we Irish find ourselves.

As other speakers have pointed out, our job now is to get the very best benefits out of this Agreement and to provide against any possible disruption of our industry. A healthy reaction, and the example already given by our industrialists in their pronouncement, would have been to accept this as a fact of life. But, here in the Dáil, if the Minister suggested we should accept it as a fact of life, and go on, it might be misinterpreted: it might be taken to mean that something less than desirable had been arranged. This is not so. What we have got in this Free Trade Agreement is exactly what we ourselves had decided upon as necessary for the full maturity of Irish industrial development. In fact, some years ago, we ourselves had already embarked on a procedure of unilateral removal of protective tariffs to stimulate our industry into the position of competitiveness which is necessary for us in order to gain the benefit of the export markets which are available.

I do not think anybody has argued, here or anywhere else, that it is desirable to continue in a protective state. The protective barriers were essential to the beginnings of industry but now, 30 years later, they can only have the effect of stunting the growth of Irish industry and, as elsewhere, should be replaced by other aids to industry such as technical assistance, capital grants and tax concessions. Anybody who would argue that things were going all right as they were and were going to remain that way is arguing from a fundamental weakness. We were faced with the prospect of Irish industry becoming isolated in a free trading world, stagnating and sinking, the prospect of some of our industrialists sinking deeper into the rut of inefficiency which is engendered by protection.

The fact that I have to speak about inefficiency makes it necessary for me to say, first of all, that there are honourable, and many honourable, exceptions in Irish industries who have been winning export markets and have adapted themselves to the competition which the industrialists in other countries can put up. But there are a number of firms who need a real stimulus or incentive to become efficient. It was not unreal some time ago to visualise a situation in the future in which our competitors, ever increasing their efficiency and productivity, would be able to cross any protective barriers we put up and win the markets from industrialists here who had been made more and more complacent and more and more inefficient by virtue of those very protective barriers. We were, in fact, in very real danger. The alternative of things staying as they were did not really exist and nobody can say it did. I do not think it is seriously argued that this new phase of Irish industrial development should not be brought about. Nobody will deny the need for Irish industry to bring itself out from behind protective barriers and make itself thoroughly efficient. I believe, through this Agreement, we have found the best possible way available to us now of successfully changing our industry from protection to growth in competition.

Many people see the main advantages in this Free Trade Agreement as agricultural. Others are quite certain that the important advantage is this enabling of our industry to undertake the transition which will make it possible to have fuller growth and to increase our export trade. The obvious gains, at first sight, would appear to be for our farmers. Apart from the fact that the expanded financial gains estimated to accrue from the arrangements on the agricultural side should give rise to several thousand new jobs outside of agriculture, the gains on our side in agriculture are many and will be dealt with by the Minister for Agriculture. Broadly speaking, under the former Trade Agreements, our farmers had duty-free access but this was not secure and was subject to termination on six months' notice and subject also to control in some form in the interests of orderly marketing by the British Government.

Mr. T.F. O'Higgins

Which never happened——

Dr. Hillery

This happened in the case of butter——

Mr. T.F. O'Higgins

Only in butter——

Dr. Hillery

——which is a very important example. The benefits of access to the British market duty-free have been somewhat eroded by the deficiency payments to British farmers which made the prices to our farmers fall to an artifically low level. There was a partial exemption from this in that Irish cattle would, after three months' residence, become eligible for these payments.

In this new trading arrangement, there is improved assurance and security of access for increased quantities as well as, for the first time, deficiency payments being made for beef and lamb. There is an improved butter quota and a shortening of the time necessary for qualification for the deficiency payments. It appeared to somebody who was speaking to me earlier on—and he put it this way— that maximum security had been arranged for the Irish farmer by creating insecurity for Irish industrialists. The first part—the gaining of maximum security—is undoubted but I reject the implication in the second part that the creation of insecurity for Irish industry is in any way a sacrifice of industry.

If we are to survive as a nation, if we are to maintain the standard of living to which we are accustomed and if we are to achieve the standard of living which is accepted as normal in other countries and throughout Europe, we must export. We must export to the big markets. I cannot accept, as a sacrifice, the taking away of protection from industrialists who, because of that protection, limit or attempt to limit their activities to the Irish market and, in so doing, are and continue to be inefficient, causing high prices here in Ireland.

I should like to examine the industrial picture now brought about through this Agreement. The trading between this country and the United Kingdom has been governed by the Trade Agreements of 1938, 1948 and 1960. The principal advantage in industry under those Agreements has been the right of duty-free entry to Britain for a wide range of industrial goods from Ireland. In the cases where goods from Ireland were subjected to duties on entering England, a preferential rate of duty was applied, the same as that applicable to goods of Commonwealth origin. The sector of goods subject to duty going from Ireland to Britain is a narrow sector but this had been assuming great importance through the years because of the development of man-made fibres. The duty on man-made fibres had become a serious impediment to the development of Irish textile exports.

By way of exchange for those concessions to the Irish side, dutiable goods exported from Britain to Ireland were, under those Agreements, entitled to a preferential rate, normally two-thirds of the full rate. There were certain other privileges which would confer competitive advantages on British goods on the Irish market. Notable amongst these was the ten per cent duty charged on goods imported under duty-free licences from outside the Commonwealth area. I should point out the advantages we had in the free entry of our goods to the British market had been declining because the United Kingdom had made reductions in their tariffs to other countries, and had so narrowed the margin of preference which our products enjoyed over goods from non-Commonwealth countries that our preference was becoming much reduced.

The formation of EFTA was particularly significant in that regard. Tariffs on industrial products going into Britain from EFTA countries had been steadily reduced, and at the end of this year, will be eliminated. By that time goods from EFTA countries will have parity with goods from Ireland over the range of goods where up to now we enjoyed duty-free entry. Consequently the advantages of duty-free entry to the British market had been very much reduced unless our industrialists were capable of competing, through efficiency, with members of EFTA.

When one considers the range of Irish goods which were subject to tariffs going into Britain under old Agreements, we had reached the stage where we were at a tariff disadvantage vis-à-vis the EFTA countries, a disadvantage which would have increased as the British tariffs against EFTA countries were cut unless we were able to have them eliminated for our goods also. Our preferences were also being eroded in the British market by negotiations in a multilateral way in the GATT. I refer to these points as any judgment of the Free Trade Agreement must be made against this constantly changing world in which the advantages we held in the British market could continue to be advantages only if our industry and industrial production was geared to a higher degree of competitiveness in price, value and design.

Under the Free Trade Agreement we are now discussing, the British protective duties against Irish goods, such as exist, will be eliminated on 1st July next. That is the first gain: whatever rhythms of reduction we have in removing our tariffs, the tariffs on this sector, and on a very important sector of goods from Ireland going into Britain, will be reduced immediately. The products originating in Ireland which are to be liable to protective duty are listed in Appendix II, page 221 of this book which has been presented to the House. The most important of these duties are on silk and man-made fibres and goods containing these products; on musical instruments; motor vehicles and parts of motor vehicles including tyres. The removal of the man-made fibres duty will be a substantial benefit to Irish textile industries in different areas and the removal of duty on musical instruments, for example, will be of great benefit to an important industry at Shannon.

It should not be necessary for me to say that the benefits of the removal on July 1st, 1966 of the remaining British tariffs will only be benefits if our industrialists are at this moment planning their sales campaign in Britain to start on 1st July. It would not be good enough to wait until the tariffs are gone to start thinking of the benefits. We shall have to get that sense of urgency across to every one of our industrialists who can benefit so that they can be out looking for the markets now which will be available from 1st July. It would not be too much to hope that an extra £5 million to £6 million in exports should be available in the second part of this year as the benefit from the removal of these tariffs.

Apart from certain products listed in Annex A, Ireland has undertaken to eliminate by means of ten annual reductions of ten per cent all existing protective duties on goods imported from Britain. The first of these reductions will be made on 1st July, 1966. The basic duties except for quota cases, will be those currently in force, that is, where unilateral reductions have been made, the cut rate will be the basic duty. Ireland has also undertaken to eliminate the protective element in revenue duties either within a period of five years from 1st July, 1966 or in stages of ten per cent over nine years, as in the case of protective duties. This is what I describe as the best possible arrangement: we could make the transition from protection to free trade for our industries over a period of nine years but I repeat what the Taoiseach said here: our industrialists should not feel any cause for complacency because they have ten years to do this. The quicker they become efficient, the better and the greater their prospects of joining a wider market sooner and that objective should be in the forefront of their plans.

It is natural that we should have certain anxieties and seek to provide safeguards for our industries during this transition period and afterwards and so the obligation to eliminate duties is subject on the Irish side to modification in accordance with paragraph 5 of Article I and in accordance with Article XIX. Under paragraph 5 of Article I, the Irish Government are enabled to make a review in the fifth year of the transition period for the purpose of selecting a limited number of products which, because exceptional difficulties have arisen, can be excluded at that stage from the Free Trade Area obligations. The goods so excluded may represent up to three per cent by value of the total imports from Britain in the year preceding the review. That is in addition to goods and products excluded from the very beginning of the Free Trade Area Agreement. In addition to goods which may be so excluded, products of other industries which are found on review to be in difficulties may, with the agreement of the British Government, be accorded special treatment under Article XIX, paragraph 3. This special treatment provides for the extension of the transitional period in individual cases up to a maximum of 15 years. This protection can be in the form of a slower rhythm or a standstill for a period.

Article XIX relates to difficulties in particular sectors and permits the temporary imposition of quantitative import restrictions where an increase in imports, due to the removal of quotas or duties, causes an appreciable rise in unemployment in a particular sector of industry or in a particular region. These restrictions may be applied unilaterally, without consultation, for a period of eighteen months and, with the agreement of the British Government, may be extended beyond 18 months.

Quantitative import restrictions of a similar nature can be undertaken as an advance action where an appreciable rise in unemployment is anticipated in a particular sector of industry or in a region. Other action as may be agreed upon by the two Governments including the extension of the transitional period, as I mentioned before, may also be taken.

Before the end of the transitional period, 1st July, 1975, the two Governments can consider whether the provisions of paragraphs (1) and (2) of the Article which I have just been discussing will continue to be necessary and they may be agreement make such provision as is thought to be necessary after the end of the transitional period to deal with difficulties in any particular industry or region.

These safeguards should not, as has already been said, attract anybody as shelters from competition or give anybody the notion that it is not necessary for him to become competitive or to take measures to reorganise his industry. We realise that the success of Irish industry depends on becoming competitive and that for many the urge to become competitive and the need to adapt will arise only through the exigencies of the trading situation which confronts them. While this Government worked hard to ensure that the provision for safeguards by exclusions at the beginning, exclusions after a five year review, a slowing of the rhythm of reductions in sensitive industries and the quantitative restrictions unilaterally applied in cases of unemployment, would be as good as could be desired, we do not want our industrialists to think of these in terms of shelters to which they can run. The shelter and safeguard is there but I want no part in allaying anxiety which is necessary in many of our industries to bring about the mental change which is necessary, apart from any physical adaptation which we are undertaking.

The question of dumping was raised during the debate. It was not necessary for any of the speakers to press me to produce anti-dumping legislation. As has been said, anti-dumping measures can be taken unilaterally without consultation by either Government now. As far as we are concerned we can take unilateral anti-dumping action.

Mr. James Tully

What do you consider to be dumping?

Mr. Donegan

That is a thorny question.

Dr. Hillery

This is an extension of the rights which existed under the other Trade Agreements where consultation between the two Governments was necessary before anti-dumping action would be taken. While paragraph 21 of the Record of Understanding provides that, as a normal practice, we would continue to consult, each party now has the right under Article XI to take unilateral anti-dumping action if there is a threat of material injury to its domestic industry.

The fact that we have a better position now in relation to anti-dumping is due to the need for that because under the old Agreements, we were entitled to protect ourselves by increased or new protective duties or tariffs. In the new situation, where we are not so entitled, we find ourselves in a particularly vulnerable situation in relation to the possibility of dumped imports and I and the Government are very well aware of the absolute necessity to have effective anti-dumping legislation and to have the freedom which I have already mentioned to take speedy action unilaterally where dumping or the threat of dumping could result in material injury.

The legislation which will be required to protect against dumping or against subsidised exports has been under consideration for some time. We had some time ago a submission from the Federation of Irish Industries for the introduction of such legislation and a special group was set up to study the matter. This group, which is representative of the Department of Industry and Commerce, the Revenue Commissioners and the Federation of Irish Industries, has drafted proposals for anti-dumping legislation and these have been going through the process of examination by all concerned and the consequent revisions. I intend to bring in legislation here with the proposals but I do not see any benefit in discussing the nature of the proposals or even the definitions at this time.

Mr. James Tully

That is one way of getting out of it.

Dr. Hillery

There is no question of getting out of it. Legislation is being prepared in consultation with those most concerned and it will be the very best we can do because we realise how vulnerable we are.

Mr. James Tully

The definition of dumping will not change the legislation. We should know what we are talking about when we are talking about dumping.

Mr. Donegan

We have to wait and see.

Dr. Hillery

It is difficult enough for me to follow my own train of thought, without following the Deputy. There is an onus on me to go into some details which are quite puzzling to people who are not in trade but I should like to say something in relation to quantitative import restrictions. Under this Agreement, import quotas on industrial goods from the United Kingdom other than goods in Annex A, that is, the exclusions list, are required to be eliminated. The quotas listed at Part I of Annex B—woollen and worsted piece goods, synthetic piece goods, cotton piece goods, hose of a value exceeding 50/- per dozen pairs, rubber and plastic footwear, felt hats and screws, and also the quotas on motor vehicles and tyres, which are not listed in the Annex because they had not been subject to the two ten per cent tariff cuts—are to be eliminated on 1st July, 1966. The remaining quotas which are listed in Part II of Annex B are to be removed in stages over the transitional period, some more quickly than others.

The quota on footwear, other than rubber and plastic, will be abolished in two years' time, that on electric filament lamps in five years and those on springs, sparking plugs and brushes and hose of a value not exceeding 50/- per dozen pairs will be expanded progressively over the full transitional period. On the removal of quotas protection will be afforded by duties and these duties will be reduced progressively in accordance with the general programme of tariff reductions. There is provision where the duties applicable in quota cases have been subjected to unilateral cuts that while the duty currently charged will be applied, the basic duty for the purpose of reductions will be the uncut rate. As a result the rate charged will mark time for two years in all but one case, until overtaken by the downward progression of the basic duty. In cases where quotas are being removed over the full transitional period, the reduction of duties and the expanding of the quotas take place simultaneously. The relief provisions of Article XIX apply to quota protected goods as well as those protected by duties.

On the Irish side goods listed in Annex A are excluded from the obligations of free trade. The goods in Annex A are mainly agriculture and fishing products but some industrial products are also included. Generally the basis for the exclusion of the products from free trade treatment is that such products are price supported or otherwise State assisted in the United Kingdom or derive directly from products so assisted or supported and so the conditions of fair free trade could not be fulfilled.

In the case of industrial products on the lists I mentioned, for example, flour, bread, pastry, biscuits, sugar, sugar confectionery, chocolate and jams, wheat or sugar are the principal ingredients and the prices at which these commodities are available to the British and Irish users are, because of policies pursued in each country, unequal. Jute and jute goods are excluded under a special arrangement but this is because jute products are subject to State trading arrangements in Britain.

In the case of goods already entering duty-free into Britain from Ireland, there will be no change in the rules of origin, that is, the rules which determine whether or not an article is Irish. For the goods which are at present dutiable, there is some change necessary when the Free Trade Agreement is in force. Some change in the rules will be necessary to prevent goods made in Commonwealth countries from securing duty-free entry to Britain by being routed from Ireland. I am discouraged from going into the details of the rules of origin here. They are quite complicated, indeed so complex that I do not think any purpose would be served by putting them on the record.

Mr. T.F. O'Higgins

I agree.

Mr. Donegan

What is the position in the case of low cost materials? What is the change, if any?

Dr. Hillery

What the Deputy asks sounds simple but the answer could not be simple.

Mr. Donegan

That is why I am asking.

Dr. Hillery

What I have decided is that those concerned who want to find out about their particular exports should get in touch with the Department and there they will be given every assistance.

Mr. T.F. O'Higgins

In relation to man-made fibres, will Japanese materials count as materials of Irish origin?

Dr. Hillery

I think I had better go into it in detail.

Mr. Donegan

It might be as well.

Dr. Hillery

For textile products— that excludes clothing—the new rules of origin provide that at least two stages of manufacture—spinning and weaving, for example, in the case of fabrics, or weaving and making-up in the case of garments—must normally be carried out within this new Free Trade Area either in Britain or in Ireland.

Mr. Donegan

Does that exclude Japanese cloth?

Dr. Hillery

There are some modifications to allow a reasonable amount of non-area materials to be introduced in the final stage so that a certain percentage of non-area cloth can be used in outer clothing.

Mr. T.F. O'Higgins

Does non-area mean EFTA?

Dr. Hillery

There are certain modifications which differ for different types of cloth, but non-area means non-area.

Mr. Donegan

Does that mean each factory will have to send to Britain some goods which have their origin in the area and they will then be permitted to send some goods which have not, or does it mean they can send all their made-up articles manufactured of materials from outside the area?

Dr. Hillery

Depending on the percentage of non-area material in them, they can send outer clothing.

Mr. Donegan

Will these be subject to licence?

Dr. Hillery

No.

Mr. Donegan

To certificates of origin?

Dr. Hillery

Origin will have to be proved.

Mr. Donegan

The Minister says there will be a limitation on the quantity of made-up garments sent from here to Britain when the material used is from outside the area; does that mean that one is limited in the number of certificates of origin?

Dr. Hillery

No.

Mr. Donegan

What does it mean?

Dr. Hillery

There is no problem at all involved in certificates of origin, provided the two stages of manufacture I have instanced take place within the area.

Mr. James Tully

That includes Japanese cloth which is foam-backed and made up?

Dr. Hillery

No.

Mr. Donegan

One does not foam-back a frock.

Mr. James Tully

One might.

Mr. Donegan

Stitching is one process. Where is the other process? If three yards of Japanese cloth are used to make a dress, the only process involved is cutting out and stitching up. Is that one process and must there be another?

Dr. Hillery

One process, and there should be two.

Mr. Donegan

Did the Minister say a limited quantity of these dresses, in which only one process was involved, will be allowed in?

Dr. Hillery

No.

Mr. Donegan

It must be two processes. That has not come to light until this moment. This is very important.

Dr. Hillery

There is, as I said, a certain percentage permitted in outer wear which does not apply to inner wear.

Mr. Donegan

A skirt, a frock or a pair of pants is all outer wear.

Dr. Hillery

If there is less than a certain percentage non-area material, then it is all right. It is limited in percentage only and, as far as I know, it does not create a problem for manufacturers.

Mr. Donegan

It does not create a problem? Does the Minister think they will be able to send as much as heretofore?

Dr. Hillery

Much more than before. The general achievement is a big improvement. Would the Deputy be confusing the issue with the low cost cotton?

Mr. Donegan

Yes.

Dr. Hillery

This has nothing to do with the rules of origin. The Deputy has been talking about a different thing from what I was talking about.

Mr. Donegan

What is the Minister talking about, man-made fibres?

An Ceann Comhairle

We shall get nowhere with this cross-examination.

Dr. Hillery

What has happened is that Deputy O'Higgins was talking about man-made fibres and Deputy Donegan was talking about cotton. I was dealing mainly with man-made fibres.

Mr. Donegan

What is the situation in regard to cotton?

Dr. Hillery

May I not make a speech as I intended to do? I would not know the details which manufacturers would know. Any information that is required by manufacturers, exporters or even Deputies will be made available to them in the most detailed way if they can formulate their questions and know what they are talking about.

Mr. Donegan

Does the Minister know what he is talking about?

Dr. Hillery

I do not claim to be an expert.

Donnchadh Ó Briain

Is the Minister for Industry and Commerce not entitled to make his speech?

Dr. Hillery

The rules of origin are very complex, and we have had a good example of how confusing they can be for all of us. I do not think that politicians could be expected to know all about cloths and threads of different kinds that even exporters themselves find difficult. I think they would be well advised to consult either the Department of Industry and Commerce or Córas Tráchtála who will give them detailed, specific advice on their own particular problem. I understand that Córas Tráchtála are preparing a leaflet which will be available for exporters in the near future. They hope to have discussions with exporters to explain the rules of origin. Therefore there is nothing to be gained by going through the very complex field of rules of origin and putting them on the records of this House.

Mr. Donegan

I am not entirely with the Minister.

Dr. Hillery

In relation to cotton, this is a separate Agreement. Side by side with the Free Trade Agreement, a separate Agreement governing trade in certain cotton textiles has been made. Under this Agreement the Irish Government have undertaken to continue existing control on the exports from this country of cotton yarn for five years. They have also undertaken to restrict the exports of cloth, household textiles and made-up goods manufactured from materials originating in countries whose direct exports to Britain are themselves restricted. The control of exports of these goods will last for five years. The base level of the amount is something to be decided between the two Governments within the next two months. It is expected that the base will be a recent year and that there will be a provision for growth in the controlled exports on a basis equivalent to the rate of growth of the British market for cotton textile products. Cotton products other than those covered by the special Agreement are subject to the ordinary application of the Free Trade Area Agreement rules and are not affected by the restriction now being imposed on low cost cotton.

Mr. Donegan

After five years it is free?

Dr. Hillery

It is likely, yes.

Mr. Donegan

After five years the low cost cotton is free to come here?

Dr. Hillery

That is what I assume.

Mr. T.F. O'Higgins

Is it not more than an assumption? Is that not the Agreement?

Dr. Hillery

Yes; that is the Agreement. I have outlined the situation as far as I can. Any information that Deputies or exporters want will be available in the Department of Industry and Commerce. I should like to repeat what I said earlier, that any benefits to be gained or any untoward effects to be avoided will depend mostly on people outside this House. It will depend on the attempts at adaptation made by industry itself. That is why I say I would not like to say anything in this debate which would reduce the feeling of urgency and anxiety which should drive our industrialists into organising their industries and adapting their industries, and guide our workers into winning for themselves a livelihood in this country out of the new opportunities.

My predecessor in office, Deputy Lynch, spent many a long day and night exhorting and almost begging Irish industry to adapt itself. That was eight years ago when the question of a European Free Trade Area was first raised, four years ago when the question of EEC was raised, and since he arranged for the unilateral removal of tariffs. Some firms of honourable mention have responded to this and have made themselves fit for competition. This time, however, I should like to talk about the firms that have not responded and have not seen fit to adapt themselves to the competitive conditions of free trade. I suppose this Agreement seems to give further time for adaptation, but again, as was remarked already, we may have joined a wider trading group which requires a more rapid reduction of our tariffs before the end of the transition period mentioned in this Agreement.

There has never been so much advance warning given of any impending change. Some months ago during a debate on the economic situation, I dealt at length with adaptation, the amount of adaptation that has taken place, and the need for urgently getting down to adaptation by those who had not taken part. Now at this time with my short period of experience in this office, I find myself more concerned with another aspect of adaptation, the mental outlook of management and workers towards their responsibilities and their work in this new situation. I suppose it is inevitable that 30 years of protection should have fostered in management and workers an attitude of mind which would be fatal in an era of free trade. This is the lack of a sense of urgency about which I complained before. This is the lack of response to the exhortations of my predecessor over so many years. I should like to say to them now that if a sense of urgency does not become part of the normal attitude of mind of management and workers, we have very little to look forward to in a free trade area. The managers here must compete with managers in other countries and the workers and trade unions here must contribute every bit as much as the workers and the unions in competing countries.

The rate of productivity which enables a country or an industry to carry on without difficulty behind high tariff walls is not the rate which would enable it to survive in free trade conditions. Much has been done by the Irish Productivity Committee but we would be deluding ourselves if we failed to realise that over a large range of Irish industries there is scope for much further improvement in productivity. Let me repeat, therefore, that while physical adaptation is of primary importance in meeting free trade conditions, and is of the greatest urgency, it is not of itself sufficient if we are to achieve what we desire—to put it bluntly, nothing more or less than industrial survival. Physical adaptation must be accompanied by a radical change in outlook, in practice, in trends of thought, much more so than was necessary during a prolonged period of high protections. That type of outlook must disappear.

The time for physical adaptation is running out, now that the terms of this Free Trade Agreement are known. The uncertainty of our future trading relations has now been removed and people cannot any longer blame uncertainty as a cause for inhibiting final decisions in relation to adaptation. To assist these firms who have not already taken the necessary adaptation measures, the Government have decided to extend the provisions of the legislation in relation to adaptation grants to enable such grants to be approved up to 31st December, 1967, provided application is made by 30th September, 1967 to An Foras Tionscal. This gives industry an extra 18 months in which to formulate extra plans for adaptation, if these plans are to be grant-aided. I hope this last opportunity will be availed of to the fullest. I should like to draw attention here to the fact that applications for adaptation grants lodged after 31st March, 1966, will be confined to expenditure in the future and such grants may not be applied retrospectively as at present. This should encourage firms not already undertaking adaptation measures, or who have but have not yet applied for grants, to get down to it before 31st March next.

Many calls were made to industry by the Government to create circumstances that would insure against the worst effects foreseen by the more pessimistic members of the community. I should like to repeat that the outcome in 1970 and 1975 depends to a great extent not on what the Government do but on the action of the various parts of industry. I have already mentioned that productivity of course would be largely determined by improved skills and more scientific means of production, of work study and the use of more up to date machinery. We must also look for more co-operation and understanding between workers and management. This will become increasingly important. I am sure that in this respect the community look for an enlightened spirit of trade union leadership. Trade unions have worked hard and have participated in the various organisations concerned with industrial efficiency and increased productivity. This, of course, is for the direct benefit of their members as well as for the common national good. They are now participating in various councils of State. I should like to be able to remove any doubt people may have that they are adequately organised to get the fullest possible support from their own members.

On this question of efficiency, it is not in ten years' time, when all the tariffs are gone, but in five or six years when half the protective level will be removed, that the first real wind of competition will be felt. Even in five years' time we will not just be starting to become competitive and if what we do in 1966 is against the economy, if it is wrong for the economy, then what we do this year will not be undone by 1970. If we continue to award ourselves pay increases without corresponding productivity increases this year and next year, we will very likely have priced ourselves out of competition by 1970.

There have been great changes in the employment pattern in Ireland during the past ten years and I foresee even greater changes during the next ten years. There are areas in the country which will suffer reductions in employment and other areas where there will be increased employment opportunities. These changes are inevitable. They happen in every country which is developing and making progress. It is the price of progress. Other countries have had to face up to it and so must we. Many people are reluctant to face this inevitable change in employment opportunities and incidence. They are naturally afraid their jobs will be jeopardised or that their patterns of life will be upset.

We must overcome this fear of change or the fear will overcome us. The main aim of the Government's manpower policy and the various explanations we have published of it is to minimise the need for workers to feel apprehensive about changes which are about to come. We must try to look into the future and forecast these changes so that they will not prevent workers from earning a decent standard of living in their own country. We have decided on a number of measures to make it easier for workers to change from one type of employment to another and to protect the worker from fear at the disappearance of one type of work by gearing him for another type.

The White Paper was published by the Government to explain this manpower policy, and I am happy to be in a position to inform the House that substantial progress has been achieved by the Parliamentary Secretary in this, one of the most important of our works for the near future. Since the publication of the White Paper, a manpower advisory committee consisting of representatives of the Federated Union of Employers and the Irish Congress of Trade Unions, under the chairmanship of an official of the Department of Industry and Commerce, was set up last month to assist the manpower agency in its work. An Industrial Training Bill which proposes the establishment of a number of authorities with wider powers in regard to industrial training and re-training was introduced on 14th December, and it is hoped to circulate this Bill at a early date. A draft scheme for redundancy payments and re-settlement allowances has been prepared. This draft scheme, together with the initial development proposals and placement functions which have been agreed upon, has been submitted to the manpower advisory committee which meets in a couple of days' time. Arrangements for recruitment of staff for the manpower forecasting unit and careers information service are in hand and every effort will be made to have this functioning as soon as possible.

In relation to the motor car industry, I should explain that quota restrictions on vehicles are required under the Agreement to be abolished on 1st July. On the removal of the quotas, a shadow duty of 75 per cent flat will come into operation. This duty contains a revenue element and the protective part will be reduced. We have the alternative of reducing it in the normal ten year ten per cent rhythm or, if we wish, to have it removed altogether by 1971.

Mr. Donegan

How much of the 75 per cent is protective?

Dr. Hillery

58 per cent.

Mr. Donegan

Of 75 per cent or of 100 per cent? Is it 58 per cent of the 75 per cent or 58 per cent of the value of the goods?

Dr. Hillery

The Committee on Industrial Organisation which examined various aspects of Irish industry when the prospect of joining the EEC was first alive felt that this assembly industry would not survive in free trade. Since then people who are familiar with the industry, and others longer associated with the administrative side of the industry in this country, have come to regard the CIO estimation as somewhat pessimistic. Whatever the outcome, the next six or seven years should see little change and in that time it will be our duty as the Government to seek to make arrangements — and also it should be the duty of the owners of these assembly plants and industries — to make provision against future losses of employment by their workers. I have already mentioned in former debates the efforts which have been made to encourage assemblers to transfer their management and work force to other manufacturing activities. This together with what the Government agencies can do, plus the activities of the manpower agency having regard to new industrial development, will do much to allay the anxieties of the workers in the motor assembly industry.

Someone seemed to think we would not have all that industrial development which the Taoiseach spoke of, but my experience in the past few weeks since the Agreement, since the establishment of a secure and wider trading area, has been that there is a livelier interest here in Ireland on the part of prospective promoters of new industries for exporting. The lack of security which existed during the negotiations on EFTA and the EEC and especially in the past couple of years, inhibited the interests which people might normally have had. I can say that since the signing of the Agreement, since it has become a fact, and since the wider area of trade has become a fact, people who before this were holding back have come very much more actively into negotiations about industries which I would regard as very important additions to our employment opportunities and export trade.

In this regard I suppose I should point out one of the gains which we do not underline as a gain, that is, the right of this country to continue with export tax concessions for the life of legislation which we have provided. As Deputies know, these concessions are available to industries setting up in any part of the country up to 1980, and in the Shannon Free Airport area up to 1983.

Much of the statement by the Irish Congress of Trade Unions on the Free Trade Area Agreement is clearly dealt with in the book which has been presented to all Deputies — the White Paper on the Agreement. They deal with all the things the Government have taken into account, and exhort the Government to do things which the Government have already decided to take into account. One thing which is clear from Congress's reaction is that they have had the same healthy reaction to the Agreement as the Federation of Irish Industries. They accept that this is a new situation, that this is a fact, that this is a trading arrangement, and they ask: "What do we do about it?" The fact that both sides of industry are starting the first year of the new Agreement with this attitude is something that augurs well.

My intention in intervening in this debate was to inform. I know it would not be possible for any one person to carry the detailed provisions of a Trade Agreement in his head, or even in a brief. Again, I invite those who need information to seek it in my Department where every assistance will be given to the exporter, the industrialist, or the Deputy, who wants to have clearer information on the implications of the Free Trade Area Agreement. I would say nothing to deny the right of industrialists to feel anxiety. Anxiety, worry and insecurity are the lot of industrialists in every part of the world. It is the milieu in which this breed of man finds his métier and his success and I do not know any reason why our industrialists should live in a different position from that of industrialists elsewhere. I am quite convinced that our managements and our workers can, given the proper attitude of mind, by adapting their mental attitude compete with workers and management anywhere in the world and it will be the job of my Department to give them every assistance to do that.

Mr. T.F. O'Higgins

A day, or a couple of days after the documents which this House is asked to approve were signed in London by the British Prime Minister and the Taoiseach, The Times of London appeared with a story about the Agreement and referred to it as being the end of the philosophy of Sinn Féin. I do not know whether the writer of that article knew the coin he was using so far as his country was concerned, because for us Sinn Féin has meant the coming of a change, which made it possible for an Irish Government to go to London and there freely to treat with the Government of Britain. Sinn Féin for us has meant the development in our own way of our own resources and the expression of our determination to make of ourselves a nation in the world. If the writer of this article in The Times meant to convey that our people or any Irish Government had lost or were losing the determination to fight or maintain for this country our position in the world by a reliance upon our own resources, then we reject without question that suggestion.

We have little doubt that whatever is involved in this Agreement, whether it is a good one or a bad one, whether it is the right thing to do, or the right time to do it, certainly the philosophy of Sinn Féin and what it meant and means for our people will not be forgotten. Indeed, we may have to call more upon it in the times that lie ahead and in relation to the challenge that lies ahead. We may have to realise that the competition in a narrowing world may demand from us a far greater display of national determination and a resolution to depend on our own resources than we had ever had to face in the past. For that reason I have little doubt that any English writer who thinks that the conclusion of this Agreement means the end of the philosophy of Sinn Féin requires to think again.

If, on the other hand, the writer of this article meant that the signing of this Agreement means the ending of a philosophy which believes in indiscriminate tariff protection, the end of the philosophy which believed that by keeping out competitors, you could strengthen your economic position, then, while it is not historically accurate to attribute that philosophy to Sinn Féin, he may be right, because I do not believe that from now on, certainly in the present situation, and in the immediate future, any country in Western Europe can rely on indiscriminate protection by tariffs to promote or sustain a national economy. The explosion that has taken place following the end of the last war has changed, probably permanently, thinking on these lines. From the efforts to reconstruct Europe following the carnage of the last war, there has been a trend which gradually has grown stronger and has now become a pretty irresistible force, a trend towards the liberalisation of trade, the removal of tariff barriers of one kind or another all over Europe.

That is a situation which exists; it is a fact that we have got to realise and it is in the context of that view and of that understanding that we have to consider this Agreement and what has been done on our behalf by the Government. If we do not approach this Agreement in the realisation of these matters, we may very easily come to faulty conclusions. This Agreement is in its terms irrevocable. The Taoiseach today reminded the House of that fact. It is well that we should realise the significance of that. To the extent that agreements between nations are honoured by nations, this Free Trade Agreement ties this country permanently to the economy of Britain. Whether the Agreement be good or bad, for better or for worse, under the terms of the Agreement, there can be no stepping back.

The mere statement of that fact five years ago—certainly ten years ago— in this House by any member of the Government would have aroused the most incredulous cries of protest because it would have been true then, and I think it is true today, that normally and ordinarily it would be unthinkable for this country so to tie itself to Britain — unthinkable for a country such as ours that spent so much of its efforts and of its resources on the philosophy of Sinn Féin in ending the free trade area that existed all over these islands and in securing for ourselves the right to decide our own economic and national policies. It would be unthinkable in normal circumstances for a country with that background and position, with the fears and susceptibilities we have had for very good reason, to turn back the pages of history and to make ourselves, as we had been, the larder of England. It is therefore tempting in a debate of this kind to speak immediately from an understandable reaction to an agreement which is so out of tune and so out of context with our recent national history. But we have got to remember that these are not ordinary times and that this Agreement cannot and should not—and I fear the Labour Party have made a fundamental error in this matter — be considered as an agreement concluded in normal circumstances with Britain.

That is not the fact. There is in the background the imponderable factor of Europe, imponderable because there is none of us can state with any assurance or certainty how great, how small, how real or how unreal a factor in the present situation is the possibility of European union. But it is true to say this: if the Rome Treaty is to be expanded and if it is to cast its net over the entire of Western Europe, then neither we nor, any more than us, the British can henceforth consider merely our two countries. We will cease to have either that obligation or pleasure and we will be concerned merely by the position of our people and of our countries in a very much larger sphere of influence. It is because of the background of Europe to this discussion today that we have got to stand back from it and consider it not merely as an Agreement concluded between ourselves and the United Kingdom but as an Agreement that has been concluded by two countries that may in the near future be swallowed up in the greater Europe that many people believe is coming.

Having said that, it is unnecessary for me to say that whatever the future may be from Europe, whatever the developments may be, they have not happened yet. In fact, there is no certainty that they will happen, although the possibility is, I suppose, that they will. But the developments have not yet taken place. The justification for this Agreement and the only justification that can be made for it has to be based on the assumption that Britain and this country will both be in Europe by 1970. It is on that assumption and in that belief that the Agreement we are debating provides for the disposition on the British home market of a possible and expected growth in our production up to 1970. It is because of that assumption that we are going to be in Europe that the entire nature of this Agreement is moulded on the basis of the targets set out in the Second Programme for Economic Expansion.

All that is understandable. If by 1970 we are in Europe, if by 1970 the basis for this assumption has been realised, then everything in the garden will be rosy. We will then have to meet within the framework of the European Economic Community the challenge there involved and to arrange for the sale of our products in a wider market, including of course the British market. But if by 1970 neither we nor Britain are in Europe, if by 1970 the Rome Treaty for one reason or another has not been expanded, if by then there are still two trading camps in Europe and the bridge between them has not been built or travelled, then we shall find that we have cut a stick to beat ourselves.

It is for that reason that we in Fine Gael have very anxiously considered our position in relation to this Agreement. We look on it as a gamble, and frankly a gamble we doubt the Government are entitled to take. We look on it as a gamble, a gamble by the Government in the sense that they have chosen to say: "Our bet is that both Britain and ourselves will be in Europe in the next four years." On that assumption, betting in that sense, we conclude this Free Trade Area Agreement with the British because the exercise will work out as a preparation for Europe. That is a gamble from which, if it succeeds, no harm will come; but if it does not come off and we do not get into Europe, then this Agreement will work untold damage to the Irish economy. From 1970 on, as the Minister for Industry and Commerce indicated, it will cause increasing harm and damage to Irish industry. If it continues after 1970, and if we are not in Europe, it will cause the transformation of Irish agriculture back to the situation in which a man and a dog looked after large areas of ranch land and, from 1970 on, we shall very quickly be turned back into the situation in which we are the supplier of cheap beef for the British market. Our people will have lost and will lose, without doubt, any opportunity for expansion of employment and, from 1970 on, we must face the certainty that employment will recede and emigration will increase.

These are serious thoughts and those who may be affected, four years hence, could not have a say in the matter, anyway. However, the responsibility is ours here today to decide something which affects them and to hope that we do it rightly and in their interests. The first thing we have to say, whether the Government are proved right in this matter or not, is that we doubt their right to gamble in this matter. We doubt that it is justifiable that so large a risk be taken which can have such a far-reaching effect on this country but the fact is that this risk has been taken. This Agreement has been signed by an Irish Government expressly in the interest of freedom of trade, in the interest of the development of European economic co-operation, in the interest of all these other matters set out in the Preamble. In these circumstances, it appears well nigh impossible for any Member of this House who believes in the development of Europe to deny approval to an Agreement of this kind. I do not see how we can do it. We might doubt the wisdom or the right to take the gamble, but, it having been done, it is very difficult to say that approval should not be given. If this Dáil failed to approve this Agreement, we should be declaring, certainly to the British and I believe also to the Europeans, that we are not interested in the development of European economic co-operation and that, I believe, would not be in the long-term national interest.

We have also to say that while we regard this as a gamble, we also desire to know the circumstances in which the decision to venture this step was first taken. Today, the Taoiseach said it was his idea, not that of the British Prime Minister. He said it was an idea which he first put forward to the Conservative Prime Minister, Mr. Harold Macmillan, and, it not being acceptable then, he put it forward again in November of 1963. If that is so, we have witnessed a very strange exercise on the part of the head of a democratic Government. If, in fact, it has been the settled intention of the Fianna Fáil Government, over the past 18 months or so, to enter into precisely this Agreement, an Agreement based on the principle of free trade between this country and Britain, and if the only difficulty in their way was that of getting an amenable British Prime Minister to listen to them, why, in the name of everything that we regard as sacred in this country, have the Irish people not been told of it? Why was this particular settled intention not disclosed at an earlier date to our people so that they could pass judgment on whether or not this gamble was justified?

I think it right that I should remind the House, through the Chair, that the first time the term "Free Trade Area Agreement" was used was when the Taoiseach came back from London last July. However, we now know that it was not then that he had first thought of it but that throughout all the earlier months — in March, he says, of 1965 — his officials were as busy as bees working on this proposal.

Mr. M.J. O'Higgins

A month before the election.

Mr. T.F. O'Higgins

It is well to mention that he used the words "March, 1965". May be he was busy at that time because the sovereign people of Ireland were being asked to elect a new Government. It might have been of passing interest to them to know that, behind the scenes, going on all the time, was the forging of this Agreement but nobody thought well of letting the people know so that the people could pass judgment on these rather grave matters. There are people who write articles in the newspapers, who pass judgment on Deputies for not controlling the power of bureaucracy. These scribes who write in that way might well think of what is involved in a matter of this kind. Here is the most far-reaching Agreement since the Treaty that established this State. Here is an Agreement that —unless it is stopped, as I hope it will be—by European development will have far-reaching effects on the future of our people. Yet the Taoiseach, the leader of a democratic Irish Government, tells us here today that this is not something that suddenly emerged last July but is something that was his settled intention and something which he had discussed with his colleagues, who were unanimous about it, a long, long time before. Nevertheless, not one of them thought it well to let the Irish people know what was in their minds. I regard that as outrageous and as quite contrary to any democratic principles which people talk about so glibly but obviously find so difficult to practise.

Why did the Taoiseach not disclose at the general election that he contemplated this agreement with the British—or was he afraid people might say it was an unwise thing to do? Why did the Taoiseach not tell the Irish people that he proposed to take this chance in the faith and conviction that it would be all right — that, in four years' time, we should all be in Europe? Was the Taoiseach afraid the people would say: "That is a chance you may not take. You may gamble with other things but you may not gamble with the future of this country"? Was he afraid that if he made that disclosure, he and his Party might lose the general election? Certainly, it appears to me that when he comes in today and says that was always his policy, he is either being untrue to the principles of democracy or is not being truthful in what he says to the House here today.

The Taoiseach also today taunted the Labour Party and the Fine Gael Party on what were the alternatives. That is a very old political device and is a manner of thinking which is particularly familiar in the case of the Fianna Fáil Party. When a change of Government had taken place, one can remember the abolition of food subsidies and then the propaganda all over the country: "We had to do it, the others left us in debt and we had to do it". Here now the Taoiseach says: "Tell me the alternative; we have to do this". I want to challenge that. To me it is unthinkable that the Leader of an Irish Government could, for the 18 months before last July, have always looked and wished for a Free Trade Area Agreement with the British. I do not believe that. The British get so much out of this Agreement. They get twice as much as we do. The British will earn up to £75 million a year from Irish business. The increased business we can expect to get will be something of the order of £25 million a year.

I do not believe for one moment that the Taoiseach could have had a settled, firm determination to enter into an Agreement of this kind. I believe that other things must have been considered. I believe there must have been a consideration of an Agreement which would involve the partial freedom of industrial trade in return for certain agricultural benefits. I believe there must have been a consideration of all these matters. If my belief is correct, why could there not be a greater display of frankness in this matter? Why cannot we be told what alternative arrangements and conditions with the British were, in fact, considered? Are we to assume that nothing else but a Free Trade Agreement was considered the whole time? That is what the Taoiseach says. I cannot accept that that is so.

What about Europe? I listened carefully to the Taoiseach speaking about the possibility of development of opportunity in Europe since the breakdown of the British negotiations in January, 1963 and I have heard the Taoiseach speak in this House many times over the past 20 years. For those who may not have listened to and heard him as often as that, here is a tip: whenever you hear the Taoiseach getting indignant, vehement, annoyed and cross, be certain he is on weak grounds. Be certain he is on weak grounds and it is right that he should have been vehement, cross and that he should have protested in the strident way he did about Deputy Cosgrave's suggestion that more attention should have been paid to Europe, because there is the Taoiseach's Achilles heel. Make no mistake about it.

I want to assert that since General de Gaulle put the British out of Europe in January, 1963, and, with them, us, not one single thing has been done on the diplomatic front to investigate or endeavour to find out what our prospects have been in Europe. Nothing has been done over that period. We, as a small country, are absolutely involved in Europe, which means the possibility of expansion or extinction for our people. When we should have regarded this matter in that serious light, we had our Minister for External Affairs trotting over to the United Nations Organisation proposing Resolutions of interest to Timbuctoo and everywhere else in the Far East but he never darkened Europe with his footsteps. These are serious matters. What have the Government been doing for the past two years? They have allowed our situation in Europe to stagnate and I say it not merely in the form of guessing. I have gone to the trouble of going to Brussels to find out. I assert, without doubt, that apart from an effort which was made in relation to certain beef exports in the last three years, no effort, good, bad or indifferent, has been made by our Government to investigate the possibilities of getting into Europe.

The Taoiseach was indignant about it today: "Foolish to make such a suggestion," he says; "Anyone who could believe that that was possible would be native." There was, he said, the common custom tariff and the only thing the authorities in Brussels would consider would be adherence to that common tariff. If the Taoiseach believes that, I suppose this Government cannot do anything about it. We have to put up for the time being with the Taoiseach we have. He has been a very native man indeed himself because in the last three years the Austrians, who have strong ties with the Communist world, who are bound in economic ties for marketing with the Communists, have been able to convince the authorities in Brussels that they could enter Europe and be associated with Europe as an exception to the common custom tariff and still retain their markets in Eastern Europe. That has been accepted in the case of Austria. It is also accepted in the case of West Germany who have retained a situation in which they also have certain connections with the East. It has been accepted in the case of Portugal, Greece and many other countries. Why does the Taoiseach think it would be unthinkable? I assert he says that because it was not thought of at all. Instead of having the Minister for External Affairs cavorting around the place as a candidate for the Nobel Prize, he might have been in Brussels winning some prizes for our people and he would have been doing better business and better work.

I shall suggest there have been times in the past 18 months, in Europe particularly, when a certain statesman in France would have been very glad indeed to use the Irish as a pawn, if necessary, in a game of chess with the British. We, as a small country, still have our uses. Remember, the fact has been that on the Continent of Europe —I doubt what the situation now is— there was a very favourable climate for a young, sturdy, courageous, little country to join other countries in EEC. We have allowed that opportunity to go by and I fear that in doing so and in taking this gamble, we have very much queered our own pitch in Europe. I do not believe it is possible now, no matter what happened to this Agreement, to develop any independent policy in Europe. We have finished that once and for all. I think it is a tragedy to have done so. Let me recall that the Leader of the Government who did it is the same man who three years ago, puffed up with insistence on national independence, never kow-towing to the British or anybody else, declared that so far as he was concerned he was prepared to go into Europe, whether the British did so or not.

Mr. Corish

He did not mean it.

Mr. T.F. O'Higgins

He did not mean it, but that was the sentiment of the Leader of the Government who today thinks it foolish for anybody to suggest the possibility that we could have explored entry into Europe in the past three years, foolish and naive. This is the same man who was prepared, if his words mean anything, to go into Europe, whether the British came in or not. He would have looked a very sorry sight, but that was his sentiment and those were his views. I suggest there has been a very serious dereliction of duty on the part of the Government by their inaction in relation to Europe in the past three years. We do not know and cannot know what could have been possible but we do know that there was goodwill available to us in Europe. We know that a small country particularly was always welcome in Europe and that countries with particular problems were never disregarded merely because they had problems and we know that one small country mounted a diplomatic offensive over the past 18 months which is now paying off and we know that Austria looks like concluding an agreement with the Common Market authorities which will give her a bit of the best of two worlds. What Austria could do we could have done if we were not so obsessed with settling the affairs of the globe and forgetting about our own people and problems.

Having said that, I want to come to the Agreement which we have. I suggest, however it happened — why it happened, I do not know—that there have been some very unfortunate claims made for this Agreement by a too-enthusiastic Minister. The most vocal in that regard has been the Minister for Agriculture. In the two or three days before Deputies and political Parties were able to see what was signed on their behalf, we had Press interviews and statements issued by the Minister for Agriculture with, I think, the result that every farmer in the country thought there was going to be a perpetual harvest moon and that the land was going to flow with milk and honey. It was only after this nonsense had been issued and finished with that eventually—I do not know the number of typists available to the Government — two or three days later, we were able to get these documents. Then there was difficulty about getting the copies. It was only then we were able to read in cold print the exact terms of this Agreement and assess for ourselves the possible benefits. It has been a very depressing bit of reading.

There is a Preamble to the Agreement and I feel those who concluded the Agreement were, if not trying to fool themselves, trying to fool other people, because the Preamble is an example of a failure to face facts. It speaks of "the Government of Ireland and the Government of the United Kingdom, bearing in mind the close economic links long existing between the two countries and the special trading relationship which has developed under the Trade Agreements concluded in 1938, 1948 and 1960, and the substantial measure of interdependence of the economies of the two countries, determined to expand mutual trade and to that end to eliminate duties and other restrictive regulations of commerce on substantially all that trade...." That is a very fine sentence. This is a Preamble and one could imagine any Irish farmer quickly turning over the pages to find out how many restrictive regulations on agriculture had been removed. What does he find? Practically no change. There is a new thing called "guaranteed access" for store cattle, sheep and lambs. These are just to go in in the same way as they had been going in before but they are now guaranteed. But for butter there is a quota, for bacon a quota, for cereals a quota, and poultry, turkeys and broilers cannot go in or, at least if they do, we have to allow the British back and on everything else there is a restriction of one kind or another and some are very serious, as I shall show in a moment or two.

What, therefore, is the meaning of the phrase in the Preamble "and to that end to eliminate duties and other restrictive regulations of commerce on substantially all that trade"? Of course there has been a removal of restrictions on industry promised in this Agreement. Of that there is no doubt. Under this Agreement an industrial free trade area has been created between this country and Britain. That is to Britain's advantage, but in agriculture our farmers have been let down and our people have been let down by the man who spoke too soon and too big and who has not been sitting in for this debate at all today. Restrictions on agriculture have been retained and copper-fastened in many ways. In this Agreement we have thrown our domestic industrial market open to the British and we have had nothing substantial in return.

Again, the Preamble goes on:

Resolved to establish between their two countries a Free Trade Area, on a basis of fair reciprocity and having regard to the provisions of Article XXIV of the General Agreement on Tariffs and Trade, with a view to the sustained development of all sectors of the economies of the two countries on terms of fair competition and to the promotion of increased productivity, the rational use of resources, full employment...

Again, I want to know why was "full employment" inserted into that Preamble? I do not think there is anyone who could believe other than that full employment of our people at home under this Agreement would be utterly impossible. Still, "full employment" is included in the Preamble. I do not believe it could mislead any Irish Minister or, indeed, any British Minister, but why is it inserted in the Preamble? Is it to create the impression that if it is in the Preamble to an Agreement of this kind, it will mean something to the people? Of course, it does not. A spoonful of sugar makes the medicine go down. There it is.

I could discuss the actual details of the Agreement at some length but I do not want unduly to trespass on the indulgence of the House but there are one or two details of the Agreement I want to refer to. I have said that, in relation to agriculture, this Agreement just does not stand examination. We have had a change, if you like, to guarantees of access for store animals. That is a very welcome change in verbiage but it does not make a thraneen of difference to the substantial trade in live animals being carried on between this country and Britain for many years back. There never has been a restriction, in the interests of organised marketing or for any other reason, apart from a certain unhappy situation that once developed when we had to cut the throats of all our calves, but, apart from those days, there never has been any difficulty in our selling to the British our store animals. It may be a consoling thing to know that there is guaranteed right of access but I cannot think that it will make the slightest difference to my constituents around Graiguenamanagh, Rathdowney and such places. I do not believe that they feel any more confident. I think they will still raise about the same number of cattle as they usually raise and will do the same things with them, but, apparently, the Government feel that these people should feel a little happier about it and a little more confident in relation to doing what they always do. I do not believe there will be any difference.

Then there is the next gain that we are supposed to have got, the reduction of the waiting period from three months to two months. That period was increased to three months after the 1948 Trade Agreement, by the British. I think Fianna Fáil were in office at the time, when they lost us a month.

Mr. J. Lynch

1956. The Deputy was Minister at that time.

Mr. T.F. O'Higgins

It does not matter. I think the conclusion will be the same. Whatever was feared in the extension of the period from two months to three months in relation to the cattle trade, it did not happen; it made absolutely no difference. So I cannot believe that the winning back of the month will make any difference but, if it does, it must have a very infinitesimal effect.

Then we have the deficiency payments for 25,000 tons of carcase beef and five and a half thousand tons of lamb; and there it is. These are the concessions which are supposed to transform Irish agriculture. It has been estimated, very optimistically, that these particular gains will mean something about £3¾ million a year to Irish farmers and that has been estimated at something equivalent to an increase of 1½ per cent in the farmers' income, something less than 6d in the £. This is the wonderful douche of prosperity which Irish farmers will get under this Agreement.

That is on the credit side. Under this Agreement that is supposed to remove restrictive regulations of commerce on substantially all the trade between the two countries, there still is retained the restriction on the export of sugar, control of sugar, under the existing sugar agreements. We still have specifically under this agreement the right of the British to control exports of Irish potatoes, of new potatoes, seed potatoes and sweet potatoes, and we still have under this agreement the continuation of the situation which has caused considerable imbalance in our economy over the years, the retention of the quota system for butter, bacon and cereals.

It does not matter that there is a slight increase in the permitted quota for butter. That is not important. What is important is that in this Agreement, which is paraded as the freeing, substantially, of all our commerce with Britain, Britain reserves the right to control the commerce produced from Irish butter. That is the fact that causes difficulty here. We are supposed to be expanding our cattle population. Fianna Fáil may be able to produce one but up to this I have never heard of a cow that did not produce milk at one stage or another. We cannot increase our cattle population without increasing the amount of milk and, consequently, the amount of butter that will be available for distribution and for sale.

It is quite absurd to call this a Free Trade Area so far as agriculture is concerned when the quota system is retained for butter, and retained it is. There is a guarantee of 23,000 tons up to March of 1967, in accordance with the terms of Mr. Bottomley's letter, but from that on—and again it is on agriculture that this Agreement appears to be falling down very badly — according to the Bottomley letter, it seems very doubtful as to what is likely to happen to our butter export quota after 31st March, 1967. The only provision in this letter is an undertaking to aim in the consultations to provide reasonable opportunity, in the light of the total imports authorised into the United Kingdom each year and equitable claims of other suppliers, for growth in the basic quota for the import of butter from Ireland into the United Kingdom.

That means we have an increase for the next 15 months in the amount of butter we can sell to the British, at a loss to ourselves, mark you, and it is well that people outside should realise that every lb of butter we sell to the British costs us money. But we have to dispose of it. Under this wonderful Agreement we have been given now a right by the British to sell at a loss another 4,000 tons of butter over the next 15 months on the British market. They do not know whether they will permit us to continue to do that after March, 1967, but they will aim at allowing us to continue provided they are not unfair to their other suppliers. That is the position in relation to butter and that is supposed to be a freeing of agricultural trade.

In relation to bacon and cereals there is again a reduction of the quota system. In relation to bacon, as Deputy Corish has pointed out, there is the particularly unfortunate result that, once a quota system operates, any expansion in our production can be forced into pork and pig meat, possibly to our considerable disadvantage. The British have retained the right to control our trade in that regard. They have done the same in relation to cereals and other commodities.

I question whether it is possible to describe this Agreement, particularly in relation to our main industry, agriculture, as an Agreement for free trade. It certainly is not that in my opinion. From the point of view of Irish agriculture — I am glad the Minister for Agriculture is in the House — it is a very bad Agreement indeed. But it does not end there. In Article VIII of the Agreement there are provisions which may cause further dangers to our Irish farmer in the years ahead.

In Article VIII provision is made for arrangements in relation to imports of agricultural products and it is provided that either party may regulate from the territory of the other any agricultural products other than store cattle, sheep and lambs, in pursuance of an obligation under an intergovernmental commodity agreement. It also provides for the implementation of any other arrangement for the purpose of orderly marketing, which in either case involves both a restriction on the domestic production or marketing of an agricultural product and the regulation of imports from all other substantial sources of supply of such products.

In other words, the right is given to the British to regulate any agricultural product, other than store cattle, sheep and lambs, if they do it in pursuance of a commodity agreement or some other arrangement for orderly marketing. We give them the right to regulate our exports in all agricultural products except store animals if they have a commodity agreement or some other arrangement for orderly marketing. We give them that right expressly. We give it to them in relation to pig meat, pork and a variety of agricultural products that we might be able to develop on the export market.

In paragraph (2) of Article VIII there is provision which means, in effect, that if the British decide to enter into a commodity agreement or to make an arrangement for orderly marketing they must consult with us and the purpose of the consultation would obviously be to endeavour to ensure that harm would not be done to our trade. Then, in paragraph (3) there is a provision the meaning of which I want to know. The paragraph says:

In the event of the Government of the United Kingdom invoking the provisions of paragraph (1) of this Article, it would be their intention to take account of the special relationship created by this Agreement, to provide full opportunity for imports of the product from Ireland at a level not less than that achieved during a recent representative period prior to the introduction of the arrangement in question,

This does not refer to a commodity agreement; it says "prior to the introduction of the arrangement in question".

and to afford opportunities for the growth of such imports from Ireland which would be proportionately not less favourable than are allowed under the arrangement for supplies to the United Kingdom market from any source, including producers in the United Kingdom, covered by the arrangement.

The Taoiseach said today that no one could suggest in relation to any of the Articles of this Agreement anything that the Government had not already considered. We must take it, therefore, that everything said in these Articles and the words used have been said and used delibarately. I want to know why in paragraph (3) of Article VIII "commodity agreement" has been dropped. Does that mean that it is only where the United Kingdom Government propose an arrangement for the purpose of orderly marketing that they shall have regard to the expected growth of the product being exported from Ireland? If they enter into a commodity agreement they are not bound to have regard to growth from our side. I mention that because Article VIII is vague enough in many respects. This is dealt with further in the Record of Understandings. In paragraph (16) of the Record of Understandings it is expressly provided that an intergovernmental commodity agreement might not require the restrictions of the domestic production or marketing of agricultural products. In other words, despite what is said in the opening of Article VIII, in paragraph (16) of the Record of Understandings it is envisaged that the British can make a commodity agreement which will not restrict the production of their own farmers and which, because it is not an arrangement for orderly marketing, will not require regard to the growth of exports of the products from the Irish market. That seems to me to require very careful watching. In addition to the vagueness of Article VIII and paragraph (16) of the Record of Understandings we have the letter from the Minister for Agriculture which seems to worsen the situation because in the letter of the Minister for Agriculture signed Charles J. Haughey, of the same date as the Agreement, there is this undertaking given apparently gratuitously to the British, since it is after the conclusion of the Agreement:

Having regard to the provisions of those Articles—

The Articles in question are VII and IX of the Agreement.

—the Government of Ireland undertake that, in the event of the Government of the United Kingdom, after the consultation referred to in paragraph (2) of Article VIII or in paragraph (4) of Article IX—

—which apply to bacon, butter and cereals—

—wishing to implement an arrangement of the sort referred to in paragraph (1) of Article VIII—

—that is for a commodity agreement or an arrangement for the regulation of marketing—

—which involves the regulation of imports of an agricultural product by means of a minimum import price system enforced by levies, they—

—that is, we.

—will be prepared to waive their right under Article I of that Agreement to duty-free access to the United Kingdom for the agricultural product in question, provided that Ireland is accorded no less favourable treatment than that accorded to any other country enjoying a right of duty-free access for the product to the United Kingdom, due account being taken of the different grades, qualities and price levels of that product.

I want to know what that letter means in relation to Article VIII. It seems to mean this—I should be glad if I could be told that this is not right— that the British can at any stage decide to enter into a commodity agreement or to enter into some other arrangement which they style as being for the purpose of orderly marketing. Having done that, they can impose a nominal restriction on domestic production, a restriction equal to ten times known domestic production. They then can fix a minimum price for the Irish product coming in at which we have to sell, and they can give a concession to their own producer which will put us outside the levies looking in and put us in a situation in relation to the British market that we are at a disadvantage compared with the British domestic producer.

In those circumstances it is very little use saying to us: "You will be no worse off than the Dane or the New Zealander." If in fact under Article VIII and the Haughey letter the British are given the right to give an advantage to their own producer, then the idea of calling this a free trade area so far as agriculture is concerned is complete rubbish. The most extraordinary aspect of this Agreement is the care which the British Government have taken to protect the British farmer. He is protected by quotas. He is protected by a variety of restrictions and under this letter he is given the added guarantee that if he develops a trade, for instance, in pig meat or pork or something of that kind there is a guarantee that a minimum price system can be built up which will keep all competitors at a disadvantage to him in the home market. And this is called removing all restrictions on a substantial portion of the commerce between the two countries.

There are other parts of the Agreement to which I could refer but I do not intend to do it. I should just like to mention in passing that there has not been the extension of deficiency payments on butter and other agricultural products of that kind. There has been a continuance of what was there before along that line. A little bit of "give" here by the British has involved giving a great deal more on our part.

The Taoiseach says: "We got everything we asked for." I hope again that that is merely a way of clinching an argument in a debate. I would long dislike to believe that any government asked for this and was given it on a plate. That surely could not be so. It surely could not be that the Taoiseach and his Ministers went across and said: "You may continue to restrict our exports of bacon. You may force us into pig meat and pork, and we will give you the right, if we develop a trade on that line, to enforce import levies to protect your own producers." Surely the Taoiseach and his Ministers did not say: "Restrict us in our exports of butter and cereals, and if we develop a trade in broilers or turkeys we will throw open the Irish market so that you may come in, too." Surely the Taoiseach was just exercising a way of speaking when he said: "We got everything we asked for." I am certain that that was not so. It could not be so.

As I said at the beginning, this Agreement, for good or ill, has been signed by the Government of this country. It has been signed in the sense that it is a gamble worth risking. It is a chance worth taking that in the next four years, by 1970, we shall be in Europe. This Agreement is permanent and cannot be revoked but there is this to be said about it that not only the Taoiseach but also the British side have accepted that this Agreement has been entered into by us in the imminence of entry into Europe, in the sense that in the near future we shall be within Europe. That possibility is impliedly if not expressly referred to in the Preamble. Therefore, I regard this Agreement as depending for its validity as an agreement between Britain and Ireland on the fact that we are going to be in Europe in 1970. I believe that is the basis upon which it was negotiated, that that was the spirit of the negotiations. I believe neither side is in any doubt in that regard. If it happens that in fact by 1970 Europe is no longer a possibility for us, if it happens by 1970 that the idea of the dream of a greater Europe will have receded and we are left with an agreement of this kind, which in those circumstances we would never have negotiated or signed, we on this side of the House, in those circumstances, if we have responsibility certainly will have no hesitation in telling the British that we are going to end it.

Mr. Treacy

I rise to second the amendment in the name of Deputy Corish of the Labour Party that: "This Agreement represents a balance of advantage to the United Kingdom in that it does not provide adequately for agriculture and will lead to a reduction in industrial employment and an increase in emigration." This is the confirmed opinion of the Labour Party who deplored the irresponsible attitude of the Government in precipitating this country into a Free Trade Agreement with the gigantic forces of Britain at a time when all the evidence is that we were completely unprepared for such a battle, at a time when the resources of this country were at their lowest ebb.

Many of us felt that free trade was inevitable, that it was something we would have to face in the immediate years ahead, particularly if and when Britain entered the Common Market. However, there was no good reason why we should have free trade at this time of economic depression, with acute shortage of capital and credit for economic and social advancement at home. It must be clear that the Government in these circumstances were themselves incapable of taking the necessary steps to cushion the impact of such an Agreement on the thousands of people in all facets of our economy who would be effected.

Instead of equipping our economy and gearing us in our industrial and commercial fibre, it is now a fait accompli: we are now, willy-nilly, at the worst possible time, going into free trade with Britain, at a time when our national resources are at their weakest and most vulnerable point. The economic battle which we are being asked to engage in is between a pigmy and a giant. The workers of this country in particular will suffer as a result. The workers will take a terrible beating in this battle.

The full impact will not be felt for some time. It is only when the tariff and quota protection which we enjoyed for so long is whittled away during the next five or ten years that the real effects of this Agreement will be felt and I assert that there will not be many small towns in Ireland which will not be littered with industrial graveyards where once many thousands of Irish men and women found secure and remunerative employment.

The Labour Party feel that the outcome will be that big business will be the order of the day—the ring, the cartel, the monopoly will gradually take over in this small economy of ours, squeezing out the small factory, the small businessman, the private trader. Foreign super-salesmanship will certainly make a mockery of our Buy Irish campaign and the extension of supermarkets and chain stores will close up many small grocers' stores. Moreover, it may well transpire that out entire distributive trade will fall into the hands of foreigners. Supranationalism will be the order of the day and our Irish nationalism will become something of a nasty word, for such it is in the context of the Treaty of Rome, in the views of all those in Europe whom we have met in recent times.

The Taoiseach has asserted there are no political implications in the Agreement. That assertion was an insult to the intelligence of the Irish people. Economic dependence, of necessity, means political dependence. We will in the long run see a shedding of our national autonomy and independence. It is a pre-requisite today to entry into the EEC, and vis-à-vis our position with Britain in this Free Trade Agreement, the lot of the Republic of Ireland is one of subservience and dependence on that country and that subservience and dependence will become more pronounced as we move closer to a European alliance.

Indeed, any initiative or independence which this country enjoyed in our negotiations for admission to the EEC now seem to be lost. We are being looked at through the eyes of Europe as an integral part of Britain, a shire of England, a nonentity not to be recognised. We have thereby lost an effective, independent voice in the policy-making decisions of Europe and in world affairs generally. It was, therefore, audacious to imply that there are no political connotations in this Agreement. Very largely, as will be seen in the future, this nation has now been taken out of the hands of an Irish Government and in future we sink or swim with Britain. It is ironical that this should come about on the 50th anniversary of 1916!

Mr. S. Dunne

Hear, hear!

Mr. Treacy

It is ironical that it should have been brought about by a Party purported to be Republican, who purported to have a separatist tradition, the tradition of Tone, of Emmet, Mitchel, Pearse—aye, and of Eamon de Valera—whose philosophy it was to break the connection with England, the never failing source of all our economic and social evils. That is a quotation from Tone, the founder of Irish republicanism. This was the Party of Sinn Féin, the protector Party, the Party who would win for us real independence, the Party who claimed to embody all the finest traditions of nationhood involving the maintenance of our own culture, our distinct way of life and the revival of the Irish language at all costs.

Now, by a stroke of the pen, I assert that the Fianna Fáil Party, the soldiers of destiny, have reneged on those proud principles and aspirations and have perpetrated an act of union with Britain more final, binding and irrevocable than the Charter of Henry II or the Act of Union of Grattan's Parliament. This Agreement means integration with Britain and let there be no doubt or ambiguity about it. The soldiers of destiny have become the Queen's men and they have now turned their backs on all they pledged and fought for.

These are some of the political implications of this Agreement as we see it. We are wondering therefore how this Government can go on to celebrate 1916 and the 50th anniversary of the Rising with any degree of sincerity. We must pose the question: was it for such as this that these men died?

Mr. S. Dunne

They are brazen enough for anything.

Mr. Treacy

It would be more fitting for this Government to let the dead men rest in peace. To extol their ideas would be to make a mockery of their lives, their sufferings and their deaths.

It is ironic that this Government, forced by economic failure—let us admit it—and the utter collapse of their policies, should feel so utterly helpless that they sold this country back to Britain, in a last desperate hope and expectation that the gold would rub off, and that some kind of a boost would be given to this wilting economy of ours. What if the gold turns to tinsel? We little thought in this generation, steeped in history as we are, that we would live to see the day again, as historians told us happened in the past, when we would find a set of Irishmen, purporting to be idealists, selling their souls for penny rolls, for soup and hairy bacon.

Many people in this country do not as yet realise the full implications of this Free Trade Agreement. I said earlier that it will be some years before its full impact is felt. Many people seem to forget that we have enjoyed free trade with Britain for a long number of years. There was no blowing of trumpets about it, but it is a fact that we enjoyed a free trade with Britain for a long number of years and, at the same time, maintained a protectionist policy for our industries at home and we had full access for our agricultural and industrial produce to the British market. That situation has been condoned, approved and ratified by successive Irish Governments as being the most desirable, the most necessary, and the most satisfactory kind of agreement with Britain down through the years. We virtually had complete access to her markets to which we exported some 80 per cent of our products, and we maintained protection at home for our own industry.

In that type of situation, we feel there was no really worthwhile reason why we should depart from that procedure. There was no particular reason why we should have free trade at this juncture, no reason why we should cast aside protection and deliberately expose our industrialists to the competition with which many of them clearly cannot contend. While most of us expected that some day free trade would come—and the Government had been admonishing industrialists and others to that effect—we are now being precipitated into this Free Trade Agreement at a time when we are least prepared for it and, further, at a time when all the advantage would seem to be on the side of Britain.

Before committing us to this kind of agreement, the Government had a bounden responsibility to assess the economic growth of this country, to aid, to stimulate and to co-ordinate the efforts of local industry, to gear them for this occasion, and to help them to re-adapt themselves to meet the rigorous competition with which we now know they will have to contend. Above all else, the Government should have taken particular cognisance of the vulnerability of our industry and the plight of the workers who will become redundant and unemployed as a result. While we have heard all this talk of free trade through the years, it was always in the context of free trade with Europe, with the countries of EEC. It is rather understandable that the re-adaptation measures which industries were adopting were waning in recent years, because our chances of getting into that Community were receding rather than improving, by reason of the attitude of President de Gaulle. There was never any question or talk of free trade with Britain. This is something which the Taoiseach and the Government have sprung upon the Irish people. Our eyes may have been looking towards Europe, but this free trade with Britain is something new and it has caused shock and dismay in many quarters of this country.

We are not aware of any demand by the Irish people for such an Agreement. We have heard no clamour for such an Agreement and, indeed, the Government received no mandate from the Irish people to negotiate such an Agreement. Neither was this Agreement an issue in the general election a few months ago. There was not a tittle about it. Neither do we sense much jubilation in many parts of the country as a result of this Agreement.

The most worrying aspect of the issue now before this House is that this Agreement was cloaked in secrecy and implemented in most indecent haste. The speed with which it was done savours of thoughtlessness, irresponsibility and panic. The speed with which it was done indicates clearly that it was ill-conceived, hasty and reckless. It was slipped across the Irish people under a cloak of secrecy and deceit. Such an action was most assuredly the action of a bankrupt Government who had nothing else to fall back on and who wanted to abandon their responsibility to some outside force of any kind.

I believe that when the full impact of this Agreement is felt, the Irish people will rebel against it. It is perhaps in ten years' time that the real impact will be felt and by that time only the strongest of our industries will have survived. The weakest will have gone to the wall, and with them will have gone many thousands of Irish workers. We in the Labour Party pose a question: what are the Government doing to provide alternative work for the workers we now know are going to be affected? I will be saying something later on about the Government's proposed manpower policy which has not yet come before us. An Agreement has been signed and this Government have been tinkering with the idea of joining in a Common Market with Europe for some years, yet there is no evidence of any legislation which would provide any compensation for the workers who will become redundant as a result of such action. This is irresponsibility on the part of the Government. There is a danger that by reason of this precipitate act, and the shock and dismay which it has caused, especially in industrial quarters, many industrialists may decide quickly to get out and there is evidence of that happening already. We will then have an immediate problem of redundancy on our hands. Most industrialists, having read this Agreement, are re-appraising their position and are coming to quick decisions as to whether they can continue in business or not. We cannot expect them to be over patriotic or too humanitarian in coming to a decision. They will do this on the basis of whether or not it is now profitable to stay in business in the light of the Agreement and they will make their decision accordingly.

These employers may well be in the happy position to confer on themselves a golden handshake but the unfortunate workers concerned are being thrown ignominiously on to the unemployment scrapheap with no legislation in this House yet to provide for severance pay or schemes for the retraining or the re-absorption of these people in alternative employment. It is not good enough for the Parliamentary Secretary, Deputy S. Flanagan, to talk about his scheme. We want to see this scheme in the House and we want to see it improved out of all recognition because the manpower policy which we have seen up to this is only a pale shadow of that required by the trade union movement and by this Party.

Mr. S. Flanagan

Would the Deputy say what it is, then?

Mr. Treacy

It falls far short of what is required in a positive manpower policy. If the Government are sincere about it a manpower policy should mean the creation of a distinct Ministry of Labour the task of which would be to provide for full employment and security of employment, and rising standards of living, and it should take care of the problem of redundancy. We reject a manpower policy which has inherent in it the idea of dividing responsibility between two Departments, the Department of Industry and Commerce and the Department of Social Welfare. We object also to the aspects of the redundancy scheme contained in that manpower policy which make it obligatory on the workers to contribute towards it. The workers who gave to industry their ability, their brains and brawn, should be cared for properly when it comes to the time when they must retire or the day when they have to be dispensed with and it should not be obligatory on the workers to contribute to this scheme at a time when they are in fact paying social welfare contributions.

I have said that the Government knew that we were moving towards freer trade and that barriers were coming down, and at the same time they did nothing to accelerate economic growth within the State. They have been depending solely on foreign capital, technical skill and know-how to build up our industrial arm. We all know that private enterprise, despite its best endeavours and despite all the State aid which it has been given, some of it very lavishly, has been unable or unwilling to provide for the employment of all our people. Despite all that State aid we still have a standing army of some 50,000 unemployed and a very high incidence of emigration. Protection is now being dispensed with and we are taking on a battle with a vast industrial giant, Great Britain, the pioneer of the industrial revolution. Labour believes with regret that the people who will suffer most will be the working classes.

We would again exhort the Government to embark on an upsurge of State enterprise. Where private enterprise has failed there is a moral and a bounden obligation on the Government to establish industry to utilise the nation's resources and wealth and to put people into productive work. We in the Labour Party have always complimented this Government for what they did in that respect. We are proud of such State enterprises as the ESB, Comhlucht Siúicre Éireann, Irish Shipping and Bord na Móna, which are all of great consequence to us, and which have upon them the badge of permanence and security of employment for those engaged in them. Every other country embarks on expenditure for the creation of industry where they have people unemployed. Our people must surely be our most cherished asset and where private enterprise fails the Government must step in. Labour will support and applaud any effort which the Government make in that direction. The Government's lack of initiative in this direction is to be greatly deplored. We wonder whether they are handing over the economy altogether to monopoly capitalism for the exploitation of our people.

State aid of this kind would be far more beneficial than much of the money expended by the Industrial Development Authority and An Foras Tionscal for the establishment of new industries here. Many of them, although opened by the Taoiseach or some of his Ministers with a flourish of trumpets, and which were supposed to employ many hundreds of our people, quickly closed up leaving the workers concerned in idle bewilderment. Once again the people were outraged by the action of fly-by-night, speculating gangsters in our society. We believe where public money of this kind is to be expended on Irish industry, the State should have a say in the control of that industry. Too many slick operators with foreign accents have already sold too many dummies to the Industrial Development Authority and An Foras Tionscal.

Looking at this Agreement, the Labour Party welcome the marginal benefits which accrue to agriculture. While the inference is given that this is a free trade agreement, it is not free trade as far as agriculture is concerned. Previous speakers have dwelt at length on that aspect and I do not want to belabour the point. Quotas are still involved. Some of them, such as the bacon quota, we are unlikely to fulfil. We will fulfil the butter quota, regretfully, at a great loss to the Irish consumer. In so far as butter is concerned, it is to be regretted that our negotiators were not able to secure an agreement whereby we would get an economic price for that commodity. We should not have to continue to export butter to Britain at a loss of over a shilling per pound. We are still paying the British housewife that to eat Irish butter. It must be taken into account that on the increased quota we have secured there will be a recurring loss. We might say that every pound of butter we send out will be wrapped up in an Irish postal order for 1/- or 1/6 to the British housewife. That kind of economic agreement is unsatisfactory from any standpoint. We would have hoped for an economic price for butter also because it would give the small farmer—who is getting very little out of the Agreement, especially the small dairy farmer—a better deal. Had we secured a decent price for butter we would have been able to give the dairy farmer a better price for his milk, thereby doing something to improve the sorry standard of living these people have at present.

While there may be advantages for agriculture—we sincerely hope there are, because it is still our most effective economic arm—the Labour Party are concerned about what are the employment opportunities as a result of increased opportunities for the farming community. All the evidence is— this is also the view of the Congress of Irish Unions—that if this improvement takes place in the incomes of our farmers as a result of this Agreement, it will not provide much more additional employment on the land. As Deputy T.F. O'Higgins said earlier, if our industrial arm is to be virtually destroyed in this economic battle, there are no compensations from the agricultural employment standpoint.

We have lost some 50,000 from the land in five years. We will be going back to the era of the rancher in this country, of the bullock, the stick and the dog. The Labour Party do not want this country to be merely a cattle ranch for John Bull or a cabbage garden either. We do not want to see a situation whereby if employment is to be given as a result of this kind of agreement, it will be provided not on the Liffey, the Lee, the Suir or the Shannon, but on the Thames, the Humber and, perhaps, the Seine, the Tiber and the Rhine. We want Ireland to remain for the Irish. Those of us who remember our history books will realise the terrible beating this country took in the nineteenth century when we had a free trade area with England and when our industries were destroyed. That is, in fact, what came about. We became merely John Bull's other island to supply food and fodder in times of war.

We would have hoped that this movement towards freer trade would have been a gradual one and that the full repercussions would have been assessed by a responsible Government. The Labour Party are shocked at the precipitate action which has taken place. Many industries are vulnerable to imports from Britain. They find it difficult enough to survive at present. According as the quotas are removed and the barriers of protection lowered, these industries will find it more and more difficult to continue to manufacture their different products. Many of them have been mentioned here and they must be mentioned again. The Minister for Industry and Commerce who spoke before me sought to give some kind of solace to the motor assembly industry. I sincerely hope what the Taoiseach said on television and what the Minister said this evening will bear fruit and that this industry, which employs 6,500 people, will not be destroyed.

We are concerned, too, about the footwear industry. Here again, the vulnerability of this industry to exports from England was graphically revealed by the Taoiseach in 1947 when he was Minister for Industry and Commerce and when, for a period, he lowered the then protection; the reasons are best known to himself. However, within a short period of months, over 1,000,000 pairs of footwear were dumped in this country. Dislocation of the industry became evident and thousands of workers in many parts of the country walked the streets in idleness for some months until a new Government took over and the new Minister for Industry and Commerce, Mr. Daniel Morrissey, put back the protection, thereby saving that industry from virtual extinction at that time.

I appeal to the Taoiseach and to his Minister for Industry and Commerce to have particular regard to the welfare of the footwear industry. I appeal to them to see to it that it is given breathing space to re-equip, re-adapt and re-energise itself for the competition ahead and to ensure that there will be no loss of employment as a result of the decision contained in this Agreement. I was disturbed to learn here this evening that one well-known boot and shoe factory, renowned for the quality of its product and for the fact that it was one of the best exporting footwear factories in the country, is now in some difficulty and that there has been a lay-off of workers in this city. I sincerely hope that that is not a portent of things to come. I appeal to the Minister to take immediate steps to see to it that no disaster befalls this important industry and that it is given all the let-outs in this Agreement, where an industry is threatened—that the quota will not be abolished too rapidly and that the extension may go to 15 years instead of to 10 years.

We have the reports of the CIO, to which Deputy Corish referred this afternoon. I believe that these reports are as true in respect of free trade with Britain as they were in respect of impending free trade with the countries of the EEC about which the committee were perhaps then thinking. The CIO have spelled out for us the repercussions which could arise in Irish industry in freer trading conditions. Of the 26 industries they surveyed, comprising some 77,000 workers, the CIO declared that in freer trading circumstances of any kind, some 11,000 workers would lose their jobs and that, if the adaptation measures which the Committee recommended should be taken in each particular industry were not speedily adopted, a further 23,000 persons would lose their jobs.

We know the industries which are most vulnerable. It is amazing that the Taoiseach, at his recent television interview, when asked what industries are likely to be affected, said it was difficult to know. Surely any analysis of the situation would pinpoint the weaknesses in Irish industry? Have we not had the reports of the National Industrial and Economic Council to tell us where the defects lie? Had we not the reports of the CIO to indicate the weakest sections? Surely it is irresponsible and unfair of the Taoiseach to infer that he did not know what industries would be affected? This is the size of the problem for our workers—with no hope of alternative employment in agriculture. There is, then, the real risk of a shocking unemployment problem in the next few years and an exodus by way of emigration. Because of the high cost of living in this country today, I think it is impossible for a responsible unemployed man, especially a man with family commitments, to remain idle for longer than a few weeks. He must go or become a pauper—destitute—and he would go to England. Our country would be denuded of its population, our most cherished asset. It is a terrible indictment of this Government, who have been in office for 28 years, that, while countries in Europe laid waste by two great wars, one of recent origin, can provide full employment for their people and even experience an acute shortage of labour and are drafting in labour from other nations, we have never been able to come anywhere near full employment, despite the grandiose statements contained in the various Programmes for Economic Expansion and the talk, again, of full employment contained in this Agreement.

This Government have never shown that respect and regard for Irish men and women that they are entitled to in this country, namely, the right to work in productive employment in their own land. In that connection, we have won for ourselves the name of a vanishing race. I do not wonder at the Government's selling out and abandoning their responsibilities to Britain at the present time. It is ironical in the extreme to realise that, after 40 years of native Government, we are now, in this Agreement, handing back this country to Great Britain more underdeveloped and underemployed than ever before and certainly with fewer people than ever before in our history. No doubt Mother England will take good care of us: she has always cherished us, as we know, in the past.

In conclusion, I want to say that the Labour Party have tabled this amendment to expose the incompetence of this Government and previous Governments in their economic failure and to condemn them for bringing us into this alliance with Great Britain, primarily because they have failed to deal with the economic ills of our community and because they have a balance of payments problem with which they cannot seemingly effectively grapple. We are going in at the worst possible time and the people in the forefront of this battle are the Irish working classes who will take a terrible beating. I would not wish anyone to construe from what I have said that we, in the Labour Party, are against free trade as such or that we are opposed to the European economic movement. We, in the Labour Party, are no Luddites seeking to put back the clock. We are not blinding our eyes to the happenings around us in the world today.

Mr. S. Flanagan

What about Tone?

Mr. Treacy

You were the Republican Party who were purporting to be the heirs to the traditions of Tone and Emmet. You go annually to Bodenstown and you are the Republican Party in brackets.

Our opposition to this Agreement is not based on any sectarianism or even class or nationalism because, as far as we in the Labour Party are concerned, we are not merely national in outlook but we are international as well. For us, as Labour men the world over, poverty and insecurity anywhere in the world are a threat to freedom and prosperity. We welcome the day when we can join with the nations of Europe in the European movement as equal partners when the prudent time comes; but we deplore being precipitated into it at a time of underdevelopment, depression and unpreparedness. We will work with any Party for the happy day when we can take our place in the community of European nations but we must be prepared for going in there. We must have an independent voice in the decision making of that community. We must not be in a secondary capacity to anyone because we know in the final analysis the hopes of our people must, of necessity, lie with the prosperity which abounds in Europe. We know too that in these European nations people are well cared for. There is full employment, rising standards of living and, above all else, security in sickness, infirmity and old age. These are things which we, in the Labour movement, cherish the world over and there is kinship between us the world over in that regard.

I have said sufficient to demonstrate the reasons why the Labour Party are opposed to this Agreement and the fears we have of the repercussions which may arise therefrom. It is the responsibility of this Government to take all such necessary steps as will cushion that impact. On them lies the responsibility for signing this Agreement and on them lies the responsibility for the evils which will very likely arise therefrom.

Mr. Corry

When this Agreement was first mooted, I travelled around my own constituency to find out what industries would be closed down according to the prophets here. I could find none. I travelled round Rushbrooke, Blarney, Midleton, Youghal and many other places and I did not find any industrialists there afraid of their lives of this Agreement. It seems rather peculiar now that this Agreement has to be defended today by the man who, after all, every Deputy and every individual throughout this nation admits, was the architect of our industrial arm in this country, that is, Seán Lemass. He is the man now, according to the gentlemen here, who will close down all the industries and throw thousands of men out of employment.

I have heard complaints here about agreements and about the time they should be discussed or not discussed. I went down to the Library to have a look at all the other Agreements which were made in the past with Britain. I never accused the Labour Party of being unpatriotic because their Minister for Industry and Commerce went over and made an Agreement with Britain. I speak of a particular Agreement and I am hanged if I could find it. It took me two hours of research in the Library before I hit on the fact that it was not exactly a full Trade Agreement. It was a sugar Agreement but that sugar Agreement never came into this House for discussion and was never discussed here until 1958, when I raised it here in the way of a question. While on 30th November, 1956 we were paying 5/8d a cwt. duty on our sugar going into Britain, after the late Deputy Norton signed this Agreement on 1st December, 1956, we paid 22/-, in other words, 16/4d more on every cwt. of sugar sent into Britain under that Agreement. In the year 1959, according to the figures I have here which were given to me by the Minister for Industry and Commerce at that time, in order to get our sugar into Britain, we paid a duty of £857,000 and that was under an Agreement. When we talk of Agreements here and people becoming unemployed on account of them, I should say that was an Agreement made and agreed to by Britain. My only worry about this Agreement is that I do not believe Britain ever honoured any Agreement or will ever honour any Agreement. That is my honest opinion of it. That opinion is borne out by Deputy Barry's leader. That is what he said.

Mr. Harte

Are you going to vote for the Labour Party?

Mr. Corry

If I had thought I would be speaking here this evening I should have brought in a baby's bottle for the Deputy.

An Leas-Cheann Comhairle

Order.

Mr. S. Dunne

Deputy Corry should speak up.

Mr. Corry

Deputy Dillon was speaking in regard to an Agreement signed by the late Deputy Norton when he was Minister for Industry and Commerce in 1956 which clapped £16 on every ton of sugar we exported to Britain.

Mr. Norton

What had you to say about it?

Mr. Corry

I shall tell you what Deputy Dillon had to say about it.

Mr. Harte

What did the Deputy do about it?

Mr. Corry

I shall make my own speech if the Deputy will keep quiet. Mr. Dillon, as reported at column 1411 of the Official Report of 12th July, 1960, said:

I want to raise a specific matter which affects the problem of beet farmers who are supplying beet to the sugar factories, and also other products which are produced from Irish sugar, which is raw material produced in this country. In 1948, we negotiated a Trade Agreement, Article V of which reads as follows:

The Government of the United Kingdom undertake that where goods, the growth, produce or manufacture of Ireland, are dutiable at preferential rates of duty, they will not vary the existing preferential treatment of these goods in such a way as to put any class of goods, the growth, produce or manufacture of Ireland, at a disadvantage in relation to goods of that class from other sources enjoying preferential treatment.

Now, that is a pretty comprehensive Article and yet with that Article in existence I understand that goods containing Irish sugar are being subjected to a very formidable levy, the proceeds of which are devoted to the subsidisation of goods of similar quality containing sugar derived from Crown colonies of the British Crown. I am told, I think, by some of the Minister's colleagues, that when Deputy Norton was Minister for Industry and Commerce, this matter arose and that he did not consider it desirable to press the interpretation of Article V which would give us the right to claim exemption from that levy. I do not know what the position is in regard to that——

This was the Minister for Agriculture in the mixum-gatherum Government——

—I have no recollection of hearing the matter discussed when I was a member of the inter-Party Government, although it could have happened and passed out of my memory, but I do not remember it and I have not discussed the matter with Deputy Norton...as I see it now—

Jack-out-of-office—

—it appears that that Article is wide enough and comprehensive enough to cover the present procedure under which I believe that goods which are the growth, produce or manufacture of Ireland are being put at a disadvantage in relation to goods of that class from other sources....

That was a breach of the Agreement made in 1948. Another Agreement was made in 1956 which completely wiped out Article V of the 1948 Agreement and under it the Minister for Agriculture at that time, who was supposed to be acting in the interests of the Irish people, allowed a levy of over £800,000 to be collected from the beet growers of this country on sugar. I admit that even my own colleagues could not believe this could happen. The only one I got to believe it was my old comrade, Deputy Smith——

Mr. Harte

And look what happened to him.

Mr. Corry

He set to work in his own northern way and went to London without any flourish of trumpets and here is the result of his work.

Mr. Harte

Mighty little thanks you gave him for it.

Mr. Corry

Sir, if the children will not keep quiet——

Mr. L'Estrange

——even when Granddad speaks.

An Leas-Cheann Comhairle

Deputies should cease interrupting.

Mr. Corry

Deputy Smith hammered out a new Agreement on sugar and that is why Deputy O'Higgins was remarking that there was no new arrangement on sugar. Under the arrangement made by Deputy Smith in regard to sugar, we got a guaranteed quota of 10,000 tons of Irish sugar at the British price, which this season is £60 per ton. They further accepted that this 10,000 tons of sugar would be supplied here to chocolate crumb and sweet factories for export at a price of £32 per ton, the difference being paid by the British who under the Agreement have paid the Irish Sugar Company this year £260,000. There was an agreement made by Deputy Harte's colleagues under which we were mulcted in £850,000 a year and a man of common sense went to Britain and converted that Agreement and that loss to an income of £260,000 a year for the Irish farmers and the Sugar Company.

Mr. Harte

And then you sacked him.

An Leas-Cheann Comhairle

Order.

Mr. Corry

Those are solid facts. That is how we do business. That is why I have no fear of any clause in this Agreement. I admit the beggars will break it some time. They have broken one before and they will break another, but when we have a Minister who is capable of going there and bringing back an Agreement——

Mr. Harte

Is it the 1965, the 1956, the 1948 or the 1938 Agreement we are discussing?

An Leas-Cheann Comhairle

The Deputy should allow Deputy Corry to make his speech.

Mr. Corry

I have Official Report after Official Report here dealing with the sugar question from the first time I asked a question in this House about it until I got the final result in the action of Deputy Smith when he was Minister for Agriculture.

Mr. Barry

Did you fix it up with Deputy Lynch?

Mr. Corry

I did not fix it up with anybody. I speak for myself. If there are any constituents of Deputy Harte in the Gallery, they will put him out the next time and I shall be looking at another vacant seat. Mark you, I have looked at many of them.

(Interruptions.)

I have said that as far as this new Agreement is concerned, I am not so worried about it. I have examined the industries in my constituency and I find none of them will be hurt. There are other things to be considered. There is one thing that would make this Agreement or any other agreement unnecessary, that is, a little bit of patriotism on the part of our own people. During the last few months, I have had to ask questions of the Minister for Transport and Power in connection with shipping. I wonder whether the directors in charge of that industry, who were appointed by the Government, have any faith in Irish industry. What faith have they? How long do they think our dockyards will survive when 23 of the 26 ships that are their property were sent to Britain and Northern Ireland for repairs and overhaul? There is the same position obtaining in regard to other subsidised industries. It was a rather awkward position for me to be invited to Mallow for the opening of a CIE freight shed and to find that that shed was built of British corrugated iron at a time when there was a large number of workers in Cobh idle for want of orders.

An Leas-Cheann Comhairle

The Deputy might listen to the Chair. This matter does not arise on the discussion before the House. It is a matter for an Estimate.

Mr. Corry

I have asked the Minister to obtain the opinions of the captains of industry that he appointed as to the prospects for these industries. I have given specific instances. Over £200,000 left this country during the last 12 months that could have been spent here and could have provided employment for 100 extra men. These are the things that I want attended to. I do not care about Ministers or anybody else. I am here as Deputy Martin Corry for as long as I want to stay here. I would ask the people of the country to have sufficient patriotism to insist that State subsidised companies be required to use Irish manufactured goods and Irish labour in connection with any work they want carried out. That obligation is carried out by the Department of Local Government and by the Department of Agriculture. If a Cork farmer built a haybarn and used two sheets of British corrugated iron in the construction he would lose the £60 grant. The same laws should apply to State-sponsored bodies. I have given the facts to the Minister.

Mr. L'Estrange

He will not listen to you.

Mr. Corry

If he will not listen to me one way, I have another way of making him listen. I do not want to be dragging up the question of the sugar agreement.

Mr. Norton

The only way the Deputy can make speeches is by slandering his betters who are not here to defend themselves.

Mr. Corry

I never slander anyone. I give facts.

Mr. Norton

The Deputy is slandering his betters who are not here to defend themselves.

Mr. Corry

I am slandering nobody.

Mr. Norton

Has this general Agreement anything to do with the matter under discussion?

An Leas-Cheann Comhairle

Yes. Deputy Corry has been in order in discussing the Agreement.

Mr. Corry

I have discussed the Trade Agreement and I could go back and discuss the 1938, the 1948 and all the other Agreements.

Mr. Harte

Do not go back too far.

Mr. Corry

I will discuss the Agreement that was made in Ottawa when you were hitting John Buli in his pride and in his pocket. The Deputy's natural home is on the other side of the Border and he will find himself there soon enough.

An Leas-Cheann Comhairle

Before I call on Deputy Lindsay, the Minister for Industry and Commerce has an announcement to make.

Dr. Hillery

The Dáil is adjourning tonight at 10.30 and meeting at 10.30 a.m. tomorrow. The Dáil will adjourn at 5 p.m. tomorrow.

Mr. Harte

Until when?

Dr. Hillery

The 25th January.

Mr. James Tully

That does not complete the debate. The debate will not be completed tomorrow. That should be made clear.

Dr. Hillery

There is no agreement to conclude the debate.

Mr. James Tully

The debate will be resumed when the Dáil meets again?

Dr. Hillery

After the Dáil meets again.

Agreed.

Mr. Lindsay

I want to make a few observations on this Agreement and on the motion before the House that Dáil Éireann approve of it. Let me say at the very beginning that agreements are rarely binding unless there is incorporated within them that necessary element of contract by which they can be enforced and an agreement is less binding when one finds that one contracting party is powerful and the other is very much weaker. That is the position that we find in this Agreement and the results achieved by it. A great deal of the Taoiseach's brashness here this afternoon, his truculence, his intolerance of any other views are in themselves an indication that this Agreement is not even to his liking and does not satisfy even him. I am not surprised at that because on a simple analysis of this or any other Agreement the fundamental question to be asked and to be answered is, what are we getting for what we are giving?

If we approach this Agreement applying that test, we will discover very early on that what we are giving is much more than what we are getting or what we are likely to get even if we ever get all that we are supposed to get under this Agreement.

Deputy Cosgrave mentioned this afternoon that Mr. Harold Wilson appears to have mesmerised the House of Commons and the British electorate and has now given all the appearance of having mesmerised the Taoiseach and the Ministers who accompanied him to London. I am under no illusion whatsoever about the apparent friendship and goodwill on the part of Mr. Harold Wilson. He represents a constituency in Great Britain in which there is a very strong Irish vote. He controls the House of Commons by such a slender majority that in the general election about to take place in Great Britain within the next couple of months, he hopes that, as a result of the apparent goodness he has shown to us through the medium of this Agreement, he will capture the Irish vote in Britain. Indeed, it is as a result of the policies pursued over the years by the people who concluded this very Agreement we are discussing here this evening that these Irish voters are in such numbers in Great Britain today.

The very first thing that makes me curious about this Agreement is the date selected, 1st July, 1966. By then the local government elections and the presidential election will be over and the people will not have had any sample experience of the implementation of this Agreement and they can accordingly still be caioled into believing there are great things ahead. One's curiosity might even reach as far as suspicion when we think of the wonderful things that were promised from a Health Act in 1947 prior to the general election. Suspicion might even be surpassed when we think of the general election of 1944 fought on the issue of Córas Iompair Éireann. Who could have gathered from the words of joy in those days that we would see the chaos in which the company is today?

The last time there was a free trade area as between this country and Great Britain was as a result of the Act of Union. This matter has already been touched on by Deputy Treacy. At that time there were roughly 45,000 Irish people engaged in the textile trade over the whole of this country. Allowing for the wars in Europe to settle down, and allowing for that 20 years, in 1820 the number employed in the textile trade in this country had dropped from 45,000 to roughly 13,000. It is in that situation I see the greatest difficulty arising from this Agreement. The greater the unit, the greater the production and the lower the cost; the smaller the unit, the less the production and the greater the overall cost. You will have the powerful producer in the textile industry in Great Britain producing against the small, almost pioneering, people in this part of Ireland. I hope it will not come to pass. Nobody wants to see redundancy. Nobody wants to see unemployment. Nobody wants to see the home broken up through emigration. But these are the kind of things I fear from this and these are the kind of things that are not adequately, in my view, guarded against.

The Taoiseach told us that this Agreement is the result of a long, hard process of negotiation. It was long; it may have been hard; but the result brings to mind the old adage, Parturiunt montes, nascetur ridiculus mus— the mountains have been in labour and a little mouse is born. It has been suggested before today in statements by Ministers that this is a step to Europe. Such statements are fraudulent in conception and a great deceit to practise upon the people. This may be an exercise in preparation for Europe. If it is, it will be a costly exercise. That is as far as I am prepared to go with it. It is not a step to Europe and let nobody say, because he cannot say it with any conviction, that this Agreement is in any way related to further active steps towards Europe. It is a simple Agreement made between Great Britain and the Republic of Ireland. The European background may have been in mind and may have been discussed but it nevertheless does not further this country's application by one inch beyond what it was when we went with great song and dance to Brussels, handed in our application, and came home.

The Taoiseach seems to think it is a great thing that this Agreement is permanent, that it contains no provision for its termination. The Agreement that does not contain any time limit or does not contain any provision for termination is, in my opinion, an agreement particularly fraught with danger for the smaller partner to it. I do not regard the absence of such a provision as one of any great merit.

The Taoiseach told us an extraordinary thing today. He told us that these talks were initiated in November, 1963, beginning with a move made further back in 1960. Now I acknowledge the right of the elected Government of this country to legislate as they see fit for the community over which they govern in between elections. I acknowledge the right of the Government to negotiate internationally in between general elections. But, once the Dáil is dissolved, I believe the people should be told everything. In the course of the last general election, we did not hear a single word from Government speakers at that time about this Agreement or the terms they were seeking. Neither did we hear anything about the results they hoped to achieve from such negotiations. That was, I think, a bad thing. It was a serious breach of faith with our people. It might well have been something that would have had a great bearing on the results of the election.

Would, for instance, the industrialists of this country have supported the Government Party, as is and was their wont, if they had known that their protection was to be dismantled in the manner envisaged in this Agreement? I have marvelled at many things in my time but the one thing I would marvel at now, if I could see it, would be the bank balance of the Fianna Fáil Party seeing they no longer want the support of the industrialists of this country. I sympathise with the Taoiseach in that he will not be able on the occasion of the next general election to send out the customary letter to the industrialists telling them that they have emerged out of the swaddling clothes with which he provided them to become the great captains of industry, and remind them there is a general election in the offing and that funds are required.

An Leas-Cheann Comhairle

The collection of funds does not arise.

Mr. Lindsay

It will arise.

Mr. M.P. Murphy

Has the Deputy a copy of that letter?

Mr. Lindsay

I have not got it here. I do not make a practice of carrying around letters of that kind. I am sure the Minister for Industry and Commerce or the Minister for Justice would oblige.

The very first thing we must examine in any document is the title. Indeed at certain times during the progress of a Bill through this House or through the Seanad, it is the custom that the presiding chairman rises in his seat to announce the title of the Bill. The title is regarded with such deference and respect that the chairman rises to it. Here is the title of this Agreement: "Agreement between the Government of Ireland and the Government of the United Kingdom establishing a Free Trade Area." That, to say the least of it, is not accurate. It forms a free trade area for manufactured goods, but agriculture and all its ancillaries are out of it. They are the subject matter of most polite letters passing between various Ministers and appended to the Agreement. First of all, the title of this Agreement is not accurate because it does not establish a free trade area. I want to venture a definition of a free trade area as follows: A free trade area is an area within which the Governments of the respective countries do not discriminate against imports in favour of national products or interfere with exports in order to favour consumers in the home market. Within a free trade area control and taxation are not used to protect the home producer against competition from fellow members of the area or to favour the home against the others. Surely in the whole field of agriculture that definition does not apply. If we examine this Agreement in the light of that definition we find we are confined to manufacturing-process articles.

In order to ascertain what the Agreement does or is likely to do one must examine the position obtaining prior to the Agreement. As far as I have been able to get it down into definite categories, I find it as follows, and if I am wrong no doubt I will be corrected in the course of this debate. First, since the establishment of this State there has been free movement of labour and capital as between Ireland and the United Kingdom. In Ireland and the United Kingdom, therefore, there has been one market for labour and capital. Nobody, I think can gainsay that. Secondly, as a result of past trade agreements Ireland has had:

(a) free entry into the British market for industrial products with few exceptions, mainly manmade fibres;

(b) Ireland has had a protected home market for industrial products though the United Kingdom products were subject to less duty than those of any other countries;

(c) Irish agriculture had duty-free access to the British market. It could be controlled quantitatively though the British guarantee payments for Irish stores fattened in Britain.

We must ask then how does the present Agreement expand and/or improve former ones. I might pause at this stage and say I think that whatever has been done in relation to agriculture as contained in this Agreement could have been done by itself without any reference to the industrial side. If we are so keen on talking about entering into the Common Market, it would have been a very good thing if this Agreement had been confined to the agricultural side, so that when we came to bargain for entry into the Common Market we would have that bargaining power to offer, namely, the dismantling of protection. If entry into the Common Market does not come before 1975 we may as the Taoiseach hopes, be geared, but we shall certainly have no bargaining power. We shall have to go without any protection so what then would be the point? By that time it will have to be considered whether we shall seek entry into the European Economic Community either by ourselves as a free negotiating nation or whether we shall go and be regarded as a satellite of Great Britain under conditions not unlike those that obtained subsequent to the Act of Union in 1800.

I do not say, and I do not want any member of Fianna Fáil to think that I am alleging or insinuating, that an Irish Government composed of the Fianna Fáil Party or any other party would have gone to London or anywhere else to sell us down the drain. That would be a wrong view. It would be a hopelessly unpatriotic view and it would be damaging not to the persons against whom it would be alleged but to the person who would allege it. I believe these men, our Ministers, did their best but their best is simply not enough, having regard to the circumstances and the power with which they could bargain.

The Taoiseach told us that the Minister for Agriculture fought tenaciously. I can well understand that, but if I fight tenaciously for something and I succeed in getting it, I like it to be regarded as a prize worth fighting tenaciously for. When one examines what has been procured on the agricultural side of the Agreement, one does not know what the tenacity was necessary for. Article 1 of the Agreement removes the few remaining restrictions on the export to Britain of goods originating in Ireland and provides for a dismantling of the protection heretofore provided for Irish industry. There is a distinction to be made in the agreement as between what has happened in relation to industry and to agriculture.

The dismantling of protection by a certain percentage year by year is a positive and irreversible act so that when we have reached the end of the dismantling stage in the Agreement which, according to the Taoiseach, contains no provision for termination, it will be positive and irreversible in relation to industry. The position is not so in relation to agriculture because we still have got all of the powers in the Agreement with the British, as with ourselves, to engage in consultations. Basically, of course, the duties have been removed from man-made fibres and from little else. The whole dismantling of the tariff wall is over a period of ten years. That ends it as far as industry is concerned, and whatever industry remains after ten years is something about which I would hate even to hazard a guess. Lip service is given in the agreement to quantitative restrictions on imports and exports.

In my view, Article 6 rules out free trade in agriculture and Appendix II lays down the terms of agreement regarding store cattle. Article 9 excludes bacon and cereals from the Agreement. Butter is to be specifically dealt with by the quota system. At this stage, I should like to put a pertinent question to the Minister for Industry and Commerce who is responsible for the administration of the Industrial Development Authority and An Foras Tionscal. What will happen to the undeveloped areas which are supposed to benefit from the funds at the disposal of both An Foras Tionscal and the Industrial Development Authority? As I see it, the undeveloped areas are now thrown to the winds. Can you, under this Agreement, give £50,000 or £100,000 or £150,000 to build a factory in the west and will you do it if you can?

Mr. B. Lenihan

Of course, you can.

Mr. Lindsay

Possibly you could get the British to transfer portions of their industrial arm to areas where there is no employment. With all due respect to the manpower policy which the Minister for Industry and Commerce told us was progressing because some committee had been set up——

Dr. Hillery

Not just the setting up of a committee. A great deal of work has been done and the Parliamentary Secretary will make a statement on it.

Mr. Lindsay

I hope he will tell us he has done more than set up a committee. I take it the Minister for Agriculture will speak and I wish to refer him, without quoting him, to his blueprint for the west as printed in the Western People in March last. I should like to know what is in this Agreement to the benefit of the small farmers in the west. I want to know if it will lessen in any way the number who each year at a certain time have to migrate in order to supplement the small incomes from the small holdings. I want to know if this will assist in keeping at home a number of the young people who leave this country every year, at any time of the year they are able to go. I want to know if the Government have any positive plans or have made any evaluation on specific industries which might be affected by the agreement. I want to know by how much they think the people of the west will be affected and if they have any plans to re-establish these people in employment elsewhere.

At one time, even though there was mass migration from the west, from west Donegal right down to west Cork, there was the consolation that some of the people were absorbed en route, principally in Dublin and other big centres through which they had to pass. I fear that consolation will be taken away from them on the implementation of this Agreement— that now their journey must be completed, that they must join their kin in Birmingham, Manchester, London. I want somebody in the Government to explain Article 18 which expressly provides that either party may, consistent with its international obligations, introduce quantitative restrictions on imports for the purpose of safeguarding its balance of payments.

That is not as simple as it sounds. First of all, it can be done—quantitative restrictions may be introduced by one side and the other side need not be told until it has happened. If possible, the other side will be notified. Can one imagine the Board of Trade telling Dublin: "We shall do it tomorrow or next week." That is where the kernel of our motion comes in. We talk about imbalance. When we get into balance of payments difficulties, it is because of trade. If Britain gets into balance of payments trouble, it emanates not from trade only but from sterling manipulation and money market conditions. The Agreement refers to international obligations. Our obligations internationally are small by comparison with Britain's and here is the whole kernel of the problem. Sterling is one of the world's trading currencies and it is obvious that from time to time Britain will run into balance of payments problems that will necessitate the action envisaged in Article 20 of the Agreement. We can take these measures in order to assist us trade-wise. Britain can take them for any reason whatsoever that interferes with her balance of payments, and they are not all trade, as I have explained.

From what I have said, and so far as my examination of this Agreement goes, it must be clear that there is no appreciable improvement in access to the British market for the products of industry, except in the textile field. How we are going to manage in relation to the big units across the Channel and our own smaller ones, I simply do not know, nor do I think the Government know. They are taking a chance. I will not go so far as to use the word used by Deputy O'Higgins— the word "gamble"—but I think they are taking a chance. They are hoping everything will go right or at least that a substantial part will go right. For the sake of the country, I hope that the chance they are taking will come off. There will be a great problem, so far as I can make out, from the dismantling of the tariff barriers. The capacity to export will be weakened and, of course, it will cost more to service the home market.

Mr. B. Lenihan

Is that Senator FitzGerald's brief?

Mr. L'Estrange

Do not be so smart. He gets briefs, which you did not get in your day.

Mr. Lindsay

This is my own brief We are on holidays at the moment from the Law Library so we are in full attendance here, and no one is complaining. Since I got this document, I have given it a fair amount of study. The Minister for Justice will agree with me when I say that I would hate to get a brief from an economist because I would not understand it. He probably sympathises with me in that view.

As I said, stripped of economists' verbiage, all this means is: what are we getting for what we are giving? If we could bring it down to that I would be satisfied with the application of that test, and I would not be as fearful of the future as I am at the moment. Admittedly, this creates a free trade area for industry but the difficulties for industrialists will be very great. We must create the best possible working conditions. Labour will have to take a very firm hand in this, too. Employer-labour relations will have to be sorted out with great speed if this is to survive. I say that in a constructive spirit. In discussing this Agreement, I do not want to tear it down for the sake of tearing it down.

I think I heard on the news this evening that the Minister for Industry and Commerce is taking some steps to help labour relations. I may be wrong, but I think I heard something like that. If I only dreamed it, I hope my dream comes true. I hope the Minister will take active and immediate steps to try to bring together the employers and the representatives of the workers, to hammer out an agreement as soon as possible, based on how much we are prepared to offer, and how much the employers can afford to give. We must get the whole thing straightened out because this country must be looked at askance at the moment by almost everyone who cares to look at the chaos which exists between employers and workers. I am not putting the blame on one side or the other. There must be faults on both sides but I do not think the problems are insurmountable. Unless they are cleared up, this Agreement has as much chance as a snowball in hell. The employers and workers must come together and decide to work for the common good.

Let me turn now to agriculture. I already mentioned that agriculture forms a separate part of this document. It is not part of the document that forms the free trade area. That is purely industrial, and no more. Agriculture is still subject to quantitative restrictions, and quotas and all the things we had before. A great deal of credit is being claimed for the negotiations in relation to store cattle, but that is a question of demand in the United Kingdom. They want a faster growth of the Irish animal population. A supply of store cattle is an integral part of the British economy, and getting them from Ireland saves payment to the Argentine, for instance, in hard currency. That is the advantage of getting them from here. Of course it also gives them material for ancillary industries such as hides and horns. Some one said it was of fundamental importance that we should get that concession in the British market. I think it is the other way round. It is of fundamental importance that Britain should have the necessary supply of stores. Their only alternative is the importation of South American beef which involves the loss of the value added and also hard currency. We must produce more and more stores, and if we increase our cattle population, naturally we will increase our butter output. Britain has increased the butter quota. They will take all we can produce. Indeed, the city of Manchester could take all our butter exports. That is the situation as I see it.

Let us take this Agreement vis-à-vis agriculture in relation to the small farmer on the west coast, which does not exclude the constituency of the Minister for Industry and Commerce. There is only one way in which you can increase your cattle herd. You must have capital, or you must be prepared to wait for the natural growth. You must have extra tyings to keep your extra cows and you must have extra stabling for your extra tyings. To do that you must get a grant from the Department of Local Government. That is the situation as I see it. That will take a considerable time. Capital is the problem.

I do not think there is anything here for the small man. His situation is as bad as it was before. This Agreement does not create for him any opportunities for employment. His necessity to emigrate, and migration for the heads of certain households, will still be the pattern on the west coast. I would have hoped that any Agreement of this kind would have done something to assist those people rather than the people on the better land of the country. It all forces me to the belief that the Government, whatever they are, are always influenced by the economics of the good land.

Debate adjourned.

The Dáil adjourned at 10.30 p.m. until 10.30 a.m. on Wednesday, 5th January, 1966.