Dáil Éireann debate -
Tuesday, 14 Nov 1967

Vol. 231 No. 1

Returns to Writs: Cork and West Limerick. - Accession to GATT.

Minister for Finance (Mr. Haughey)

I move:

That Dáil Éireann approve the accession of the Government to the General Agreement on Tariffs and Trade in the terms of the Protocol for the Accession of Ireland.

The Contracting Parties to the General Agreement on Tariffs and Trade have invited the Government to accede to the General Agreement, and the Government propose to accept the invitation. The approval of Dáil Éireann is required under Article 29 of the Constitution, as accession will involve a charge on public funds in the form of a contribution to the expenses of the GATT. The amount involved is small—an initial non-recurring payment of £650 to the GATT Working Capital Fund and an annual contribution towards administrative expenses which, on the basis of the estimated expenses for 1968, would be of the order of £5,600.

Deputies will have before them copies of the White Paper on accession to the GATT, which was circulated recently. This outlines the origin and development of the General Agreement, summarises its main provisions, and traces the negotiations, including Ireland's participation in the Kennedy Round, leading up to the invitation to accede. In the circumstances, there is no need for me to go over the same ground in detail. I shall confine myself to outlining the considerations which led the Government to seek accession, and the principal obligations and benefits involved.

The GATT is an international agreement embracing countries at all stages of economic development, state-trading countries as well as market-economy countries, and the contracting parties account, in all, for over 80 per cent of total world trade. It is now just a little over 20 years since the General Agreement was concluded and in that time the number of contracting parties, initially twenty-three, has increased to the present seventy-four.

The delay in our seeking to accede to the GATT was due to a number of causes. It was felt that accession might involve our making significant tariff concessions and this was regarded as a difficulty before the re-orientation of our economic policy towards free trade. Moreover, membership of the GATT was incompatible with the fulfilment of our obligation to Britain, under the Anglo-Irish trade agreements, in regard to the maintenance of existing proportionate margins of tariff preference and the grant of preferences in any new tariffs we might introduce. The disappearance of this latter obstacle was an incidental result of the conclusion of the Anglo-Irish Free Trade Area Agreement.

In deciding to seek accession, the Government were influenced by a number of factors. All the countries of importance in our external trade had already acceded to the General Agreement. Also, there was evidence that more energetic action was being taken within the framework of the GATT to find solutions to the problems affecting international trade. There was the further consideration that, although we had been given the benefit of tariff reductions previously negotiated in the GATT, there was no certainty that we would be afforded similar treatment in the future if we did not accede to the General Agreement.

The fundamental principle of the GATT is that international trade should be conducted on the basis of non-discrimination and this is reflected in the basic rule that each contracting party is obliged to grant most-favoured-nation treatment to all other contracting parties in regard to customs duties and all charges with equivalent effect. In our case the operation of the most-favoured-nation clause is modified in two important respects. First, the Anglo-Irish Free Trade Area Agreement has been drafted in accorfie dance with Article XXIV of the GATT, and accordingly we are not obliged to give other contracting parties the same tariff treatment as we give Britain. Second, the Protocol for the Accession of Ireland provides that we may continue to grant tariff preferences to countries of the Commonwealth Preference Area on condition that we do not increase the margin of preference above that in operation on 30th June, 1967. This latter condition is acceptable to the countries concerned.

Tariff negotiating conferences are an important means used by the members of the GATT to achieve the objective of reducing barriers to world trade. Countries acceding to the GATT receive a contractual right to benefit from the tariff concessions previously negotiated in such conferences, and are expected to make reciprocal tariff concessions. This involves their participation in "pre-entry" tariff negotiations, which can most conveniently take place as part of a general round of tariff negotiations. It was on this basis that we participated in the Kennedy Round of trade negotiations which commenced in 1964 and concluded on 30th June, 1967.

The details of the concessions we made in the Kennedy Round are set out in the Schedule annexed to the Protocol for the Accession of Ireland and are reproduced in Appendix IV to the White Paper and the timetable for their implementation is given in paragraph 89 of the White Paper. For administrative reasons it may be found convenient to adjust the timing of those reductions which are to take place over the period ending January, 1972.

The concessions relate to 773 tariff positions out of a total of approximately 3,000 in our Customs Tariff; 684 represent undertakings not to increase the present rate of duty or not to impose duties on goods at present duty free, 63 represent reductions, most of which do not exceed 10 per cent, in present rates of duty and 26 are undertakings to eliminate minor duties. The rates of duty on British goods to which the Free Trade Area Agreement relates will not be affected. Our concessions will, it is estimated, result in an annual loss of customs receipts of no more than £65,000. These tariff commitments are unlikely to create any problems for Irish industry or agriculture but, if difficulties affecting particular products do arise, there is provision in the GATT for withdrawal or modification of any concessions relating to those products subject to the grant of compensatory concessions elsewhere.

As a contracting party to the GATT, we would probably be expected to participate in future rounds of trade negotiations, although we would not be under any obligation to do so. In any event we would not be expected to yield concessions greater than the benefits gained in such negotiations.

The General Agreement prohibits the application of quantitative restrictions for protective purposes, but it has not been possible to achieve the full implementation of this requirement by contracting parties, particularly in regard to restrictions on agricultural products, and it has proved necessary to establish procedures for the periodic examination of restrictions maintained inconsistently with the General Agreement. It is expected that our import restrictions will fall to be examined under these procedures.

The General Agreement envisages that contracting parties who find it necessary to limit imports for balance-of-payments purposes will do so by the application of quantitative restrictions. In recent years this has proved administratively difficult for industrialised countries which have eliminated most of their quantitative import restrictions on industrial products and have dismantled their licensing machinery. Both Britain and Canada found it necessary, therefore, to apply import charges rather than quantitative restrictions when they encountered balance-of-payments difficulties. In these cases the Contracting Parties did not take a decision as to the compatibility of the import charges with the General Agreement but set up Working Parties to consult with the countries concerned with a view to keeping the application of the charges under review, and ensuring that they were applied in a non-discriminatory manner and that they would be removed as soon as circumstances permitted. It would seem, therefore, that if, as a contracting party, we encountered balance-of-payments difficulties, the possibility of our applying temporary import levies or charges might not be ruled out on account of the tariff bindings undertaken on our accession.

These then are the principal obligations which the Government will assume as a contracting party to the GATT. There are a number of others which are less important and which I need not refer to here as I do not think that it is necessary to elaborate on the information given in the White Paper. I may perhaps make one general comment however. It is that the success which the GATT has achieved has been due in large measure to the fact that it has not been applied in a legalistic manner. The Contracting Parties work on the basis of consultation and confrontation and seek to find acceptable solutions to problems rather than decide that one or other party to a dispute is in breach of the Agreement. This is, in fact, the only manner in which various problems could be settled.

The GATT's principal success has been in its efforts to bring about a reduction of tariffs and other obstacles to trade in industrial products. As a result of successive rounds of negotiations, culminating in the recently concluded Kennedy Round, the principal industrialised countries have made very substantial cuts in their import duties and have undertaken commitments binding nearly the whole of their duties on industrial products against increase. This affords a high degree of stability in the level of tariffs throughout the world which facilitates the planning and development of export trade.

The achievements on the industrial front have not been matched by progress in the agricultural sector, where the measures applied by the highly industrialised countries in the interests of their domestic producers limit severely the possibilities of obtaining satisfactory outlets for exports of agricultural products. This is not to say that no efforts have been made in the GATT to achieve a breakthrough in this sector. A particular principle adopted for the Kennedy Round was that, in view of the importance of agriculture in world trade, the negotiations should provide for acceptable conditions of access to world markets for agricultural products. The results achieved fell considerably short of this objective, but the negotiations have helped to focus attention on the problems of trade in agricultural products and their significance in the overall picture of international trade.

Turning to our own position, the principal advantage of acceding to the GATT is that, instead of relying on bilateral arrangements, we will obtain a multilateral right to most-favoured-nation treatment in our trade with the other contracting parties. The importance of this trade is evident from statistics. I have already mentioned that the contracting parties to the GATT account for over 80 per cent of total world trade. If we do not accede to the GATT, there is no guarantee that we will continue to get the benefit of multilateral tariff concessions and, indeed, a number of contracting parties are now considering withholding most-favoured-nation treatment from non-member countries by means of a two-tier tariff system.

Our accession to the GATT is advisable in connection with our efforts to export manufactured goods, which account for an increasingly important proportion of our total export business. Our participation, as a contracting party, in future GATT negotiations will afford an opportunity of securing further tariff concessions, which would facilitate the continued expansion of our export trade and further diversification of export markets.

The history of the GATT in the agricultural sphere is not encouraging but it is hoped that the Kennedy Round will not mark the end of the efforts to achieve some progress on trade in temperate foodstuffs. At its present session, the Contracting Parties are considering a proposal by the Director-General of the GATT that the possibility should be examined of reopening discussions on trade in cereals, meat and dairy products. It is important that Ireland should have the right to participate in any discussions that might affect trade in agricultural products of importance in our economy.

I think Deputies will agree that, on balance, accession to the GATT would be in the interests of this country. Approval of the motion now before the House, which I recommend, will permit the completion of the accession procedure before the end of this year.

Before finishing, I should perhaps give some explanatory comments on the Protocol for the Accession of Ireland, which is reproduced in Appendix III to the White Paper.

Paragraph 1 provides that the Government shall apply the General Agreement provisionally. The effect of this is to require them to apply Parts I, III and IV fully, and Part II to the fullest extent not inconsistent with legislation existing on 30 June, 1967. This follows the lines of the Protocol of Provisional Application under which the original signatories apply the General Agreement. As explained in paragraph 18 of the White Paper, the requirement in respect of Part II is interpreted as permitting the application of measures which are contrary to the provisions of Part II provided the legislation from which they derive was in force on 30 June, 1967 and is of a mandatory character.

Paragraph 2 defines the text of the General Agreement to be applied by the Government. This is the text applied by the present contracting parties subject to some changes of date to take account of the timing of our accession.

Paragraphs 3 and 4 relate to the schedule of tariff concessions which we made during the course of the Kennedy Round and which are reproduced in Appendix IV to the White Paper. Upon the entry into force of our Protocol of Accession, the schedule will become a Schedule to the General Agreement and we will thereby become committed to implement the concessions.

The Final Provisions in paragraphs 5 to 10 are mainly procedural. The Protocol will remain open for signature until 1st July, 1968, and will enter into force 30 days after it has been signed on behalf of the Government.

It is the Government's intention to arrange for signature as soon as possible, subject, of course, to the approval of the present motion by Dáil Éireann. The Protocol may also be signed by other contracting parties and by the EEC but the only signature required in order that the Protocol may enter into force is signature on behalf of the Government of Ireland.

Our signature of the Protocol will mean that we will become a party to the instruments listed in paragraph 7 of the Protocol of Accession. All of these require unanimity for entry into force and acceptance is outstanding from one, two or four contracting parties. The first instrument — the Protocol amending Part 1 and Articles XXIX and XXX—would not effect any change of substance in the General Agreement. The other instruments referred to are protocols rectifying or modifying tariff concessions made by individual contracting parties at various dates in the past.

The provision in paragraph 8 of the Protocol of Accession arises from the fact that, as I have indicated earlier, the General Agreement is applied on a provisional basis. The purpose of paragraph 8 is to enable Ireland to accede formally to the General Agreement in the event that it enters into force on a definitive basis.

I recommend the motion to the House.

Mr. Cosgrave

The motion in respect of the accession of this country to GATT as referred to in the speech of the Minister deals with a matter which is in many respects highly technical, a matter which requires a great deal of reference to the terms of the General Agreement on Tariffs and Trade as well as the White Paper issued in connection with it. However, so far as the discussion of this matter is concerned, certain facts emerge from it which are of some concern rather than the actual technical details of the Agreement.

As we understand it, the GATT has dealt mainly with industrial, as distinct from agricultural, products. To that extent, its interest for this country is circumscribed, and while I noted in the Minister's speech an expression of hope that in the future the aims of the GATT would be extended and developed in order to promote and assist agricultural trade, there does not appear to be any definite indication from the discussions which have taken place that the GATT organisation will stress and energetically pursue the need for developing trade in agricultural products. So far as this country is concerned, the actual accession to GATT is not of immediate concern in the way in which either the Free Trade Area Agreement was or certain prospective changes in the event of membership of the EEC.

We have had, on the other hand, experience in this country of trade liberalisation measures and our experience in the OECD as a country which participated in trade liberalisation proposals was that while, in theory, most Member Countries accepted and signed or agreed to liberalisation proposals, in practice a number of those countries operated administrative and other measures to offset or minimise in particular circumstances the liberalisation measures which were generally agreed. So far as this country was concerned, whenever we signed or agreed to any of those proposals, it is correct I think to say that we acted in the spirit as well as in the letter of the agreements. I would be interested to hear from the Minister whether any steps are open to this country where there is evidence that the measures operated are not universally applied on the agreed basis.

The one particular aspect of this matter that obviously is before the minds of industry and the trade unions at the moment is the question of anti-dumping measures and on this matter, while from the strictly legalistic interpretation of that term, the remarks the Minister for Industry and Commerce made here recently on the Estimate for his Department and again in regard to a supplementary question today may be correct, the fact is that if workers are disemployed or if firms are adversely affected by imports, while it may be a matter for discussion as to whether the actual imports involve or conflict with the terms of the agreement, the common description is that goods have been dumped. If workers are disemployed, it does not matter a great deal whether this is due to excessive imports or to lower cost imports or imports sold even for a limited period at bargain prices. I would like an assurance from the Minister that the legislation to be introduced here to deal with this matter will be no less stringent than that operated in other countries who are members of GATT.

I know a number of industrialists and trade union organisations—I know it is true of the Federation of Irish Industries and so far as I am aware, it represents also the view of the Congress of Trade Unions—feel that the legislation which is being drafted, the broad terms of which have been indicated to the people concerned, was in this respect not regarded as satisfactory. As I understand it, both the USA and Canada, both of whom are members of GATT, interpret, so far as they are concerned, the terms of the GATT more stringently than it is our practice to interpret similar agreements. I feel that for that reason, while of course the formal approval of the Dáil on a motion of this sort naturally implies that the terms which have been negotiated must be accepted in full, it is essential at this stage to sound a note of warning against the ready acceptance by this country of the bona fides of other countries who operate liberalisation measures.

Our experience in the past, certainly in the OECD, has been that while most countries accept the terms of the liberalisation measures, indeed some of them who were critical of the delay on the part of this country in acceding to the liberalisation measures, were themselves the countries who operated diversive measures to offset the actual terms of the agreement. I feel therefore that on this occasion when we are considering the motion for the accession to GATT it is essential that we be quite clear with regard to this matter and that we avail of whatever discussion procedure is open to us to ensure that the concessions which have been granted are applied universally and with equal force. So far as the terms of the legislation dealing with anti-dumping are concerned, it is essential that this country should not apply any less stringent interpretations than those which are applied by other countries. The countries that come to mind are Canada and the USA.

There is one other aspect of this matter no reference was made to, that is, the question of State trading. I would be interested to know from the Minister whether the undertaking which is generally carried on in the Shannon Free Airport area is affected in any way by this and also if any other State or semi-State bodies are likely to be affected by, I think, article 17 of the White Paper which was issued in connection with this matter and if so, to what extent the companies concerned are likely to be affected, and if there is any limitation as to time. As I understand the terms of the Anglo-Irish Free Trade Area Agreement, the concessions at present in force in respect of Shannon Free Airport are allowed to continue until, I think, 1983. It is longer than the concessions within the rest of the Agreement. Can the Minister say whether these particular concessions are provided for under the terms of GATT?

Mr. James Tully

This seems to be the period when the thing to do is to sign international agreements with all types of trading arrangements. This is one where there does not seem to be very much difficulty about being allowed to associate. We have no objection to Ireland being associated with the GATT, but, like Deputy Cosgrave, I should like to point out that this is a highly technical arrangement, far too technical an arrangement to be discussed on the floor of this House in a few minutes.

I am aware that civil servants and the Minister have studied this in detail. Nevertheless, I should like to give the warning that in this step, even though this seems to be a far looser type of arrangement than some of the other international commitments into which we seem to be anxious to enter, there seems to be a danger. I notice that many of the non-Communist countries have already become members of the GATT, and that one of them is Japan. In view of the fact that we have not, I feel anyway, effective anti-dumping laws here, the Minister and his Department would want to be very careful that we do not have tremendously increased imports from places like Japan, a fact which would knock much of our industries out of existence. This could happen and, in fact, goods manufactured in Japan from time to time appear on the Irish market, stamped in Irish "Made in Japan", which shows the lengths to which these people will go. However, nobody can say we took this step in a hurry because, as people probably know, this was originally conceived in 1946 and 21 years later, the development of what was conceived in 1946 is now before this House.

It was intended, I notice, to have a charter for international trade organisations. There were 53 countries, not including Ireland. There are now 74 countries involved, and I am quite sure that most of us agree that a reduction in tariffs is something to be welcomed, if there is a general reduction, provided the overall result does not lend itself to dumping of one kind or another and does not affect our home industries.

However, I am quite sure the Minister is well aware of those dangers and that he will do what he can to ensure that they will not become a reality. As the Minister is aware, industries have been for some time past gravely perturbed by the situation of tariff reduction, and even the Minister for Industry and Commerce guaranteed today that the Free Trade Agreement with Britain was not having the effect we thought it would have in this country. It is cold comfort. For one reason or another, various industries in this country at present seem to be feeling a severe draught. If the accession to the GATT affects that draught, it will be too bad for us.

There is another point I should like to make with regard to agriculture. For some extraordinary reason, agriculture seems to be the Cinderella in agreements with most countries. We should not allow that to happen here. When we become members of the GATT, one of the things we should try to do is to establish a better export trade for our agricultural produce. Surely in a food-hungry world, where the greatest scarcity at the present time is food, it is ridiculous that in a country such as this where food in abundance can be grown, a shortage of agricultural produce is in fact a problem for the Government and the people. I should like to commend to the Minister that if an attempt is being made to apply the GATT properly to agriculture, the Irish representatives on the GATT will do everything they possibly can to bring agriculture to the forefront and to ensure that there will be a far wider market than there is for such produce at the present time.

Mr. Dillon

I have been hearing about GATT for the past 20 years and have been familiar with its history, how it began and what purposes it was intended to serve when it was first established. When the GATT was first established, it was announced that it was to be the great international organisation designed to abolish the most evil form of protectionism, and that was the imposition of quotas for the purposes of protection. There was a special exclusion made. When GATT had finished its job, there would be only one more evil for which quotas would be considered in international trade and that was for the temporary protection of balance of payments in individual cases.

The Minister says:

I may perhaps make one general comment. It is that the success which the GATT has achieved has been due in large measure to the fact that it has not been applied in a legalistic manner.

The only reason GATT has survived is that it has never been applied. We all remember the famous occasion when the British Government found themselves in difficulties, the very kind of difficulties which GATT said were properly to be dealt with by the imposition of quotas, and they said: "We will put on tariffs; if you do not like it, you can lump it." I presume they were interpreting the GATT Agreement and applying it "not in a legalistic manner." They simply said: "That is what we have to do and we are going to do it."

Personally, I always believed that quotas were an evil institution, the worst instrument for exploiting the consumer in our country or any other country. Something I believe still much more deeply is that if we are going to do something either by legislation or by executive act, we should tell the people openly, frankly and honestly what we are doing and should not sell them a pup. Adhesion to GATT is a declaration by the Irish Government and by Oireachtas Éireann that we forswear hereafter, in principle, the right to impose quotas for the protection of our domestic industries. Is that not true?

Mr. Haughey

Broadly speaking.

Mr. Dillon

I do not believe in that qualification because I understand that was the original fundamental purpose of GATT. It was then invoked for the purpose of the Kennedy Round and the general direction has been that we have substantially got rid of the quota from international trade. Of course, all these international bodies spend a great deal of their time engaging in double talk for the purpose of trying to justify their existence. The double talk here is that having got rid of the quota, now we are making a new march towards reducing international tariffs by 50 per cent. There was a great meeting in Geneva associated with the Kennedy Round and they got into each other's wool, trampling soft ground into hard ground and hard ground into soft ground and soft ground into spring wells and they reduced a few tariffs by 20 per cent but all the tariffs that mean anything to small countries were left aside. It became clear that nothing would be done in regard to agriculture, but there were some reductions in tariffs.

Now, in the dust of the confusion of three or four years of negotiation which was finally brought to a conclusion, when it was brought to a conclusion, because the authority of the President of the United States was running out, it became very doubtful if the authority of the President to accept reductions in tariffs which were to be made under the Kennedy Round would be renewed by the United States Congress. That was the main reason why the Kennedy Round ever came to an end.

What is important for this House and for this country to understand is that we are accepting today for the first time the principle that we forswear as a protective instrument the imposition of quotas from this day forth. I wish to warn the House that great trading nations such as the USA, Great Britain, France, Germany and the other great international powers, can afford to accept obligations of that kind and then drive a coach and four through them in the morning because the volume of their trade is so vast in both directions that everybody is afraid to challenge them; and the result, as the Minister has said, is that GATT have approached these matters in a certain way and in order to achieve success they have set about it in large measure by not applying the provision of GATT in what, as the Minister euphemistically describes it, a legalistic manner, which means that the driver driving the coach and four was too big and GATT was too little.

We are one of the little ones and we should remember that. We are quite likely to find GATT getting all righteous and full of dignity, holding a meeting in Geneva and issuing two tons of paper, which nobody will read, asking us by what authority do we put on a quota to restrict the import of tyres to protect the Dunlop Rubber Company in Cork. What shall we say? Am I not right in saying—the Minister for Finance should tell us specifically —that our adherence to GATT by resolution today calls in question our right to restrict by quota the import of motor tyres or any other commodity for the purpose of protecting our domestic industries?

Unless we can say in the future that we are doing it to protect our balance of payments, GATT can start churning out tons of paper trying to retrieve their international prestige by asserting this fundamental principle at the expense of this country, having politely ignored it in respect of the great powers such as the USA. I warn the House that there is a growing movement in the US Congress for the imposition of quotas for the protection of certain industries in the US. President Johnson has announced that if Congress move by legislation to that end, he will veto them, but remember the veto of the President is subject to correction, to being over-ridden, by a two-thirds majority in both Houses of Congress.

What are we to do if the US Congress simply proceed to drive a coach and four through GATT? Shall we remain controlled by the rules and regulations of GATT? I listened carefully to the Minister today. I raised this matter with the Minister for Industry and Commerce on the vote for his Department and I asked the Minister for Industry and Commerce if he could tell us what advantage we should get out of GATT and his answer was vague. I did not blame him because he had not time to prepare a brief to reply to me.

However, I thought the Minister for Finance would be able to give us evidence of much more substantial advantages than he has adumbrated to us today. I am in the position that personally I rejoice to see the end of quotas because I regard them as a powerful instrument for the exploitation of domestic consumers in this or any other country. I doubt if many other Deputies share my detestation of quotas. What alarms me is that I cannot find in the Minister's statement to the House today any categorical warning in principle that our adherence to GATT agreement provisions means that hereafter we shall not apply a quota for the protection of a domestic industry, that existing quotas will be got rid of and tariffs substituted for them at the earliest possible moment.

I am in favour of that but I am not sure everybody else is in favour of it if everybody else understands it. I am particularly anxious that the people at large should not be sold a pup. Let them know what they are buying when they enter GATT. Whatever they are getting, the price they are paying for it is that there will be no more quotas for the protection of domestic industries, that there will be quotas only for a limited period when the Government of this country can satisfy the Council of GATT that they are essential for the temporary protection of our balance of payments.

As far as I know, that, in substance, is what adherence to GATT means for us. All this talk about making available to us the most favoured nation treatment in regard to other countries is largely illusory. I agree with the Minister's apprehension that if a great number of countries were to raise two-tier tariffs in the future it would be of some advantage to us if we could ensure that we were on the lower tier, but I am not aware of any country with whom we have substantial trading arrangements outside the Commonwealth areas, which are excluded by the terms of our adherence to GATT, whose two-tier tariffs would significantly impinge on our international trading position.

We always have open to us in that event bilateral negotiations with particular countries with whom we wish to trade—to agree bilaterally for most favoured nation treatment. Therefore, I am at a loss to see clearly what advantages we shall get.

I guarantee the House one thing. We shall receive, on average, four to five tons of paper annually from Geneva which I guarantee nobody above the rank of higher executive officer in our Civil Service will ever read. A great part of it will stop at about the level of the clerical officer and may, at that stage, prudently be consigned to the wastepaper basket. But that will not restrict GATT from turning it out and consigning it to us by air mail in duplicate or triplicate. That is one of the great justifications for the existence of these international bodies. They measure their existence by the avoirdupois of material they distribute free, gratis and for nothing—and always by air mail—to the four corners of the earth.

Would I be unduly pessimistic if I said that the average of that material read or digested by anybody in a position approximating to one of responsibility would be ten per cent? Therefore, we shall get these great imports of wastepaper—be sure of that. That does not seem to me to be of any substantial value to this country. I do not believe we shall get most favoured nation treatment in any quarter as a result of adherence to GATT. I want to be sure that, in adopting this instrument of ratification and adherence, we know what we are doing and that we are doing it with our eyes open and gladly and in the confidence that, in the long run, this is in the best interests not only of Irish industry but of the consumers in Ireland as well.

Sir Anthony Esmonde

My personal view on accession to GATT is that, in the light of the fact that 74 nations are now members of this organisation and that it is a world trade organisation, we are probably doing the right thing. However, for the life of me, I cannot see why we have waited all this time to accede to it. Nor can I derive any great information from the White Paper or from the Minister's speech. He mentions in the White Paper that a representative of Ireland discussed quantitative restrictions and trade with other countries. Who was the representative of Ireland? Was he some junior civil servant who was out there? Was he the Minister for Finance or was he a member of the Government, or who was he? I have the unhappy feeling that in practically every international organisation in which we participate, other than the Council of Europe which is attended by parliamentary representatives, discussion is carried out by some unknown civil servant. I should like the Minister to tell us the position, when he is replying to this debate, because I take it that innumerable discussions went on. Who participated in them and what apparent benefit will come in the immediate future to this country?

I see on page 22 of the White Paper a reference to decisions taken in 1963 by the GATT Ministers. Paragraph 65 (2) says that the negotiations should cover all classes of products, industrial and non-industrial, including agricultural and primary products. I know that the Kennedy Round of negotiations were delayed before they reached the finalising stage, due to the fact that EEC should put its agricultural house in order. When these discussions took place, I understood that agricultural benefits were then going to accrue to all the nations who participated in the discussions. I do not know whether or not this country did. I should be interested to know if we participated in the Kennedy Round of negotiations and, if we participated under the aegis of GATT, whether agriculture was discussed and whether any agricultural agreements were entered into which, in some way, would benefit this country.

I know quite well that the reason the Government did not accede to GATT in the past was that, although there were benefits for world-wide trading opportunities and that trade and practically nothing else is discussed in these GATT conferences, they feared the most favoured nation treatment clause. As far as my knowledge carries me in international affairs, I believe we are more or less to a large extent protected against the most favoured nation treatment clause in that we can fall back on the 1964 Anglo-Irish Trade Agreement. The Minister can correct me if I am wrong. Therefore the Government, who have covered themselves with the economic umbrella of the United Kingdom, almost to the exclusion of negotiated trade agreements with any other country in the world, now feel that it is safe for them to accede to GATT in the light of the fact that they are protected by this Agreement. If our accession to GATT means that we can participate in all the discussions that will take place within that organisation—and that means participating in world-wide trade discussions — would the Minister like to give some information to the House to justify this move that he is taking and of which probably many people would disapprove? As I said, I personally do not disapprove of it. I agree with it. The likely benefits give some justification for accession to GATT.

Is there to be a GATT conference to discuss world-wide trade in the near future? If there is, will the Minister himself participate in those discussions? Will the Minister for Industry and Commerce go and, when the Minister for Agriculture and Fisheries is not too busy with other domestic matters, will he attend as well, to try to expand and increase Irish trade outside the economic umbrella of the United Kingdom? These are questions the Minister could very well answer. He could give the House and the country some indication of the benefits we hope to get, that is, if we are to get any benefits at all.

I take it that the members of EEC, with whom we could hope, under the aegis of GATT, to get wider markets in the agricultural agreements or discussions that are taking place are equally protected under the most favoured nation clause, in that if they did apply to grant concessions to us, as being outside the EEC, they are equally protected, the same as we are protected, by being under the aegis of the British economic sphere, by having the Anglo-Irish Trade Agreement.

These are some of the facts that the House is entitled to know. We are entitled to know what exactly is going to happen, whether the Government intend to pursue actively the opportunities such as they may be, through accession to GATT or whether it will be, as Deputy Dillon said, a case of another international organisation coming in with aeroplanes carrying loads of paper junk. It should be of immeasurable benefit to the country because although international organisations have an unhappy habit of having great discussions which lead nowhere and which are about nothing, except platitudes. I have the feeling that under GATT, trade and trade alone is discussed and that it will give a small country like ours a golden opportunity because we cannot afford to send envoys all over the world looking for trade. That is something I should like to see being done but apparently we are not able to afford it or we are not prepared to do it.

However, at conferences of GATT. usually held in Geneva, or perhaps in the United States, we would have our representatives, and I hope they will be our parliamentary representatives, who would then have an opportunity of discussing trade with 74 nations. I have been long enough dealing with international affairs to know that if 74 nations get together for the purpose of discussing trade, it is possible for a country, no matter how small, how limited its capacity, or how weak its financial standing, to make a decent trade agreement. I should like the Minister to give us some indication of what is in the mind of the Government in regard to accession to GATT other than receiving loads of paper from overseas.

Mr. Haughey

A number of points have been raised by Deputies and before attempting to reply to them, I want to say that this whole area of the GATT is a difficult and complicated one. Some American legislator is on record as saying that anybody who attempts to wend his way through the intricacies of the GATT in all its developments will undoubtedly go mad. I have no intention of inflicting that fate on any Deputy and I will try to confine my remarks to the broader aspects of this matter. If I do not go into any great amount of detail, it is not because I do not want to give the House information but because this is one of the subjects about which it is true that the more one goes into detail, the more one confuses the situation.

I will take Deputy Tully first because his points are capable of more direct answer than some of the others. We are aware of the danger to industry of cheap imports from certain low-cost countries and we will avail of the machinery available to us within the framework of the GATT to protect our interests. I have no hesitation in giving Deputy Tully that assurance. Perhaps I might say in that regard that we will get what is "Gatt-able". In other words, we will avail of all the lines open to us within the general framework of the Agreement.

Mr. James Tully

Does the Minister think he would be able to continue to protect the tyre industry?

Mr. Haughey

Yes.

Mr. James Tully

Within the GATT?

Mr. Haughey

Yes, I hope so. I was going to deal with the point in regard to agriculture. Everybody concerned with this question is disappointed, grievously disappointed, with the progress made in regard to agriculture. Deputy Tully was quite right to advert to the cruel dilemma of food supplies in some parts and starvation and malnutrition in others. The more we talk about it the better because some day I hope the countries of the world will be sufficiently stirred to do something about it. As Deputy Tully knows, this is a subject in which I am deeply interested and on which I have spoken on a number of occasions. A small country like ours can only go on reiterating that the wisdom of man should be able to devise some system of dealing with this terrific problem. We will, of course, in the councils of the GATT, press for greater activity and more progress in regard to agricultural produce. In so far as we can, we will try to enlist the aid of other producers of temperate foodstuffs in this matter.

Deputy Cosgrave was concerned with the question of dumping. The situation there is that Article VI of the Agreement provides for arrangements in regard to dumping. It recognises that dumping can happen and it lays down the circumstances in which anti-dumping measures can be taken and defines the measure that can be taken. Broadly speaking, the situation is that you can apply anti-dumping duties, or countervailing duties, if an industry of your own is being materially injured. In the Kennedy Round, this Article VI was amplified by the evolution of an anti-dumping code which is really the clarification or amplification of Article VI. We have on the way legislation to enable us to take anti-dumping measures if we see fit and the legislation as framed is quite in accord with both Article VI and the anti-dumping code which emerged from the Kennedy Round, so that there is no need for any fear on that particular front. We should be able, within the confines of the GATT arrangements, to provide ourselves with a satisfactory piece of anti-dumping legislation.

Mr. Cosgrave

Could the Minister say whether we intend to operate the system which some Member Countries operate of taking action before the goods come in, rather than afterwards, by means of compensation?

Mr. Haughey

Both methods of procedure would be open to us. Deputy Cosgrave made a point about the good nations and the bad nations, those nations which keep their word in international affairs and those who do not. This is a very valid point. I am glad to say that as a nation we always keep our word in international affairs. We always honour our international commitments. I think we have a good reputation for this and we must never do anything that would interfere with it. But as regards other nations, whose record perhaps is not as spotless as ours in this respect, the fact is that the GATT does provide a forum in which this sort of thing can be brought forward and discussed. We can have a confrontation with a particular country or group of countries whom we feel are not fulfilling their obligations. It is a forum which was not available to us before. Of course in extreme cases which involve measures where tariffs bindings have been negotiated, Article XXIII provides for the withdrawal of concessions from the offending countries.

Before I leave Deputy Cosgrave, I might mention that the arrangements to which he referred which we already have for various purposes will not in any way be affected by accession to GATT.

Deputy Dillon brought up the broad question of what advantages do we get out of this. He is over-simplifying the situation with regard to quantitative restrictions. It is true that the whole trend of the GATT and its developments are towards the elimination of quantitative restrictions, but he would be wrong to over-state the position in this regard. As I am sure the Deputy knows, there are circumstances in which quantitative restrictions can be introduced and retained. It would be facile to suggest that all our quantitative restrictions must disappear immediately.

As regards the advantages, in my opening remarks I tried to deal with the broad position of the advantages we will derive from accession. First, there is the necessity to avoid being left out in the cold in regard to future tariff reductions. There is the necessity to be able to participate in discussions regarding the reduction of industrial tariffs and especially to try and be in on any future discussions with regard to agricultural produce. The Kennedy Round, of course, did achieve a great deal of progress. It did achieve tariff reductions which will, to a greater or lesser degree, be of benefit to our exporters. As I mentioned, the concessions which we made almost certainly will not be of any serious disadvantage to our industrial or agricultural producers. Therefore, it is very difficult to quantify the advantages to be derived from our accession but it is something in the overall, in its totality, we must do. There are immediate benefits to be derived and we can anticipate that, through the workings of the GATT, further efforts will be made to abolish the restrictions which exist in world trade at present.

I am not sure whether Deputy Sir Anthony Esmonde was asking me an immediate question or a rhetorical one with regard to the Anglo-Irish Free Trade Agreement. The position is that that agreement is GATT-able in that we have created a free trade area agreement which is in accordance with the GATT and the special concessions which we make in the context of that agreement are acceptable in the context of GATT. I think these are the main points which have been made. As I said at the beginning, there is no doubt that this is the right thing to do and I recommend the House to approve of this legislation.

Mr. Dillon

I understand the Minister expressed the view with special reference to the quota protection in the motor car industry that it was sustainable even in the presence of our accession to GATT. Could he tell us under what protocol or provision or reservation in our instrument of adherence the preservation of that particular restrictive quota is permissible? Would he be good enough to say, if convenient, if a similar situation arose to affect some other industry where tariff reductions resulted in a similar situation, would it be possible to adopt a similar procedure as that we have adopted in regard to tyres?

Mr. Haughey

Yes. Of course as the Deputy is aware, there is a multitude of provisions in the GATT for protecting a native industry, dealing with circumstances where an excessive import of a particular product comes into your country and a whole area of that sort which I could not deal with now. In respect of the tyres, we provide protection for the industry against countries other than Great Britain by means of minimum import duties and that is perfectly acceptable in the context of GATT. As far as Great Britain is concerned, we are, with the agreement of the British, introducing quota restrictions. That, again, is quite acceptable to the GATT because we are in a free trade area agreement relationship with Great Britain.

Mr. Dillon

Suppose we were confronted with a proposal to ship this commodity from France, would our common membership with France in the GATT entitle France to say: "Duties, yes; quotas, no—unless you can establish in confrontation with us that you are imposing the quota for balance of payments consideration"?

Mr. Haughey

That would, broadly speaking, be the position. First, if we were threatened with imports from France, we would have the protection of the duties. But the question of imposing quotas would, as the Deputy suggests, be a matter for confrontation and it would be possible, I think, in certain circumstances to get the agreement of France, or any other country, to a quota within the provisions of GATT. Article XIX—Emergency Action on Imports of Particular Products—provides for that and we could avail of it in certain circumstances.

Mr. Dillon

I do not want to appear to harass the Minister—I am sure he is as anxious as I am that the public should be fully aware of what is involved—but am I not correct in saying that the provisions of Article XIX are closely, although not identically, analogous to the balance of payments position? You can do it for a temporary period to provide against a catastrophic development due to a too rigid application of the general rules of GATT, but it would be possible for each other member of GATT to challenge us on the use of the restrictive quota and our right to maintain it would depend on a bilateral agreement consequent on a confrontation as provided for and that, if that were withheld by the appealing country, even under Article XIX we would find ourselves in a position which it would be extremely difficult to reconcile with our general acceptance of GATT.

Mr. Haughey

As I said, there are many ways of dealing with this. The first would be, perhaps, to increase the duties if the normal duties were not sufficient. We would have that avenue open to us if we had not bound the duties against increase. Then we might have to investigate whether there was dumping. Then over and above all that, there is Article XIX which says:

1. (a) If, as a result of unforeseen developments and of the effect of the obligations incurred by a contracting party under this Agreement, including tariff concessions, any product is being imported into the territory of that contracting party in such increased quantities and under such conditions as to cause or threaten serious injury to domestic producers in that territory of like or directly competitive products, the contracting party shall be free, in respect of such product, and to the extent and for such time as may be necessary to prevent or remedy such injury, to suspend the obligation in whole or in part or to withdraw or modify the concession.

That is the very valuable let out.

Question put and agreed to.