asked the Minister for Industry and Commerce if he is aware of the difficulties created for manufacturers who are obliged to pay duty on specialised viscose rayon yarn; and that payment of this duty gives British manufacturers an advantage compared with manufacturers here; and if he will state the circumstances in which this duty is imposed.
Ceisteanna—Questions. Oral Answers. - Duty on Viscose Rayon Yarn.
41.
I presume the Deputy is referring to the fact that, under the Trade Agreements of 1938 and 1948 with Great Britain, duty free licences could not be granted for certain goods, imported from third countries, if goods of a like class or kind were available from British sources. In such cases, a minimum duty of 10 per cent had to be charged. When the Anglo-Irish Free Trade Area Agreement was being negotiated, the abolition of this arrangement, in the case of goods required for manufacturing purposes, was secured with effect from the 1st of July, 1969, the rate of duty in the meantime being tapered off to 8 per cent from the 1st of July, 1966, and to 5 per cent from the 1st of July, 1967.
I am not clear what advantage a British manufacturer secures as compared with a manufacturer here because the British manufactured goods would, of course, be liable to duty on importation here up to 1975. We are at no disadvantage so far as exports are concerned because this duty is not applied to material imported for processing and re-export; and as a result of the arrangements negotiated for the Free Trade Area our manufacturers are at liberty to use EFTA yarn without attracting duty on importation into Great Britain.
Is the Minister aware that under the terms of the EFTA arrangement, Swiss yarn could be imported into Britain as from 1st January of this year without payment of duty and that the revised rates of duty applicable to this country in respect of yarn imported from Britain mean there is a differential of 8 per cent? I understand the British manufacturers can get Swiss yarn 8 per cent cheaper than Irish manufacturers can get yarn from Britain. Perhaps the Minister would investigate that aspect of the matter.
What the Deputy is referring to is, I think, the fact that the duty to which I referred, which is being tapered off, is to disappear next year. There was no similar kind of material available in Britain but, since February of this year, it has been available and therefore the duty has been applied again. That duty is to disappear from 1st July next year and, as far as Irish manufacturers are concerned, if they are selling on the home market, they are liable to duty. If they are competing with other markets abroad, our people do not have to pay duty, if they import, process and re-export.
The position at the moment is that manufacturers here could, if they were allowed import, get Swiss yarn at a price which would enable them to compete on equal terms with British manufacturers. Because of the application of the duty, they are, apparently, obliged to purchase yarn from British manufacturers and that yarn is 8 per cent dearer.
If our manufacturers were to purchase Swiss yarn for processing and re-export to anywhere other than Britain, they would not pay the duty and they would, therefore, be on the same terms as the British. In so far as they are competing here with the British in the home market, there is a duty on British goods coming in. I presume the difficulty arises in the British market.
Yes.
The position is as I have stated. The duty must be applied until 1st July next year because there is a reasonable substitute available from British sources.
The reasonable substitute is available at a price of 81d per lb plus 2d per lb duty, which differentiates in favour of the British manufacturer as compared with the Irish manufacturer, both of whom are selling their manufactured commodity in the British market. Perhaps the Minister will have the matter further considered.
Yes, though I do not think anything further can be done. The position has improved considerably compared with what it was. However, I shall have a look at it.