Advance copies were circulated to the Leaders of the parties. I understand that was done. As a further courtesy to the House I will postpone speaking until copies have been furnished to the Deputies.
Everywhere the unique character of the relationship between Ireland and the United States was clearly reflected: and everywhere the greatest understanding was shown of the problems and prospects of our country. In particular the reception accorded by Congress to the address I delivered on 15 March was for me, and for the other members of the Irish delegation, an overwhelming experience. I have had copies of this address presented to the House, for information. I hope that in the welcome we accord to President Reagan when he visits Ireland at my invitation next June, we can reciprocate something of the warmth and generosity shown to us in the United States.
My first objective in making the visit was to affirm the relationship based on history, common interest and beliefs and the closest ties of affection and kinship, linking Ireland and the United States.
Secondly, I wished to present to the political leaders and the people of the US our analysis of the situation in Northern Ireland; as we see it developing. I asked that no support or encouragement, direct or indirect, should be given to the use of violence for political ends. I also described, in terms agreed with the other Forum leaders, the work of the Forum and the hopes we have for it.
On previous occasions when Irish leaders visited the States there have been dissonant voices. These were lacking or muted on this occasion. I formed the impression that the positive efforts we are making through the Forum, and the hope that it is providing for the future, were favourably received. Indeed, I believe that my visit helped to effect a certain shift in opinion among some of those who have, perhaps, hitherto had a residual sympathy for the men of violence and their methods. What I said has certainly achieved a better level of understanding of the objects of Government policy in relation to Northern Ireland as the single most serious political problem facing our country today.
Next, I outlined at many meetings with leaders of commerce and industry the opportunities for further American investment in Ireland — both as a location in its own right and as a member of the European Community. I told them that there are already more than 350 American firms located here, representing an investment approaching five billion dollars and employing about one-seventh of the Irish manufacturing workforce. This flow of investment is now being reciprocated in a significant way through a number of Irish enterprises operating in the United States, to the benefit of both our countries.
In my discussions with the President, Vice-President and other members of the Administration, we touched on the many problems facing Ireland and the European Community. As Deputies are aware, Ireland will be assuming the Presidency of the Community on 1 July next. What was particularly notable in the discussions was the strength of the opposition expressed to the growing tendency to protectionism in world trade. The defects of this form of economic nihilism are too obvious to need restatement here. Its most immediate effect now could be to stunt the recovery from recession which is quite marked in many countries, particularly the United States, where the growth rate for the first quarter of the year is put by some commentators at an annual rate of about 6 per cent. Given the weight of the United States in world trade, this growth must be reflected in the Community and other countries — if the benefits are not eroded or eliminated by restrictive tariffs or other protectionist devices resorted to for short-term or sectional reasons.
We also discussed a wide range of issues of common concern including other aspects of US-EC relations, East-West relations, Central America, the Middle East and disarmament.
I now come to the European Council which concluded yesterday in Brussels.
The agenda for the Council as presented to us by President Mitterand included (1) Budgetary Discipline; (2) Budgetary Imbalances (including the British problem); (3) Common Agricultural Policy; (4) Own Resources; (5) Structural Funds; (6) Enlargement; and (7) New Policies.
In the event, since there was no unanimity on the issues, the Council was unable to reach agreement. The Presidency did not, therefore, issue the usual statement of conclusions. I propose to touch here on the main issues we discussed and in particular on the issues of concern to Ireland.
I turn first to the question which is clearly of greatest interest to Ireland — the proposed milk super-levy. No one should underestimate — I think that in reality no one does underestimate — the extreme difficulty of this problem. Deputies will recall that I had bilaterial meetings with the heads of State or Government of all member states — the Deputy Prime Minister in Belgium, in the absence at that time through illness of the Prime Minister — before the last European Council in December to ensure that the strength of our arguments was fully understood and appreciated. I continued this programme of discussions at a meeting with President Mitterand in Dublin in February and through other contacts before and at the Council with Mr. Thorn, President of the Commission and with other leaders.
The scale of the milk surplus within the Community is clearly unsustainable — with output running at an estimated 106 million tonnes or almost 20 million tonnes above requirements this year, costing the Community budget a sum of about £4 billion. Because of our uniquely high dependence on the dairy industry it is, in fact, in the interest particularly of Irish farmers that this surplus be tackled, but in a way that will not impede the continued expansion of output in Ireland from the abnormally low level at which it was held prior to our entry to the Community, by historical forces — by the operation of British cheap food policies, the effect of which was compounded in the post-war period through the introduction of deficiency payments for farmers in the United Kingdom. In other words, we were simply seeking the application to us of those fundamental Community principles of market unity and comparative advantage from which other countries themselves had so long benefited without artificial constraint and on which their agriculture has for so long based its ability to invest and thus to achieve its present levels of efficiency and output.
However, irrespective of the basic strength and logic of our case, the negotiating problem posed for Ireland has been a formidable one: to secure the agreement of our partners to the continued expansion of Irish dairy production at a time when an average cut of 5 per cent to 6 per cent was being imposed in the Community as a whole, with production of other members countries being sharply reduced below last year's level, or, in two cases, held at last year's level, without a possibility of further increases.
In view of the fact that, following the failure of this European Council meeting, we are still in a negotiating situation with the crucial decision affecting our dairy sector still to be taken, I am, in the nature of things, limited in what I can say to the House today and Deputies will, I hope, have regard to this fact.
I can, however, say that the situation which faced us in the European Council yesterday morning was one of peculiar difficulty. In the course of discussion of the milk situation a powerful consensus began to emerge amongst the member states, with the exception of the Presidency and Greece, that Irish milk production should be held indefinitely at the 1983 level. A quota, even at the 1983 level, would have involved an increase of 720,000 tonnes on the base figures being used for the purpose of the Council's deliberations — viz. production at the level reached in 1981 plus 1 per cent.
It was essential to achieve at that stage two objectives: first, to establish beyond doubt that there were no circumstances in which we could accept such an outcome and that the opportunity to continue to increase production, without the application of a super-levy, at the kind of rate achieved since we joined the EEC — viz. 5 per cent — was for us a sine qua non; and second, that in pressing this point not to adopt an unreasonable attitude that could be presented in other countries as involving our seeking an arrangement that would objectively be politically impossible for other member states to “sell” in their own countries in the face of pressures deriving from in most cases a requirement to reduce production significantly by comparison with last year — and even more significantly by comparison with the level of production likely to be attained under normal circumstances in the current year.
We faced two real dangers: on the one hand that our position would go by default if we failed to make a sufficiently strong line and to demonstrate our determination; and, on the other hand, the danger of posing this demand in a form that would unavoidably create such a negative reaction among member states as to undermine our whole position.
It would, of course, have been easy, and in the short term at least politically very attractive, to have ignored this latter element and to have allowed the interests of our dairy industry to be sacrificed to a fine show of intransigence. I was not prepared to take this course of irresponsibility however. My concern had to be to create conditions in which either at this meeting or later we would secure the agreement of our partners to the opening for Ireland of a growth path which they themselves were being required to abandon.
Accordingly, after a considerable amount of discussion and negotiation I agreed that a Presidency proposal be put before the Council. This proposal involved a 260,000 tonne increase in Irish production this year — a figure designed to establish the principle of a 5 per cent annual increase in production — combined with a review of the Irish milk quota in each of the subsequent years on the basis of the milk situation in the Community and the possibility of the development of new markets.
