GATT Marrakesh Agreement: Motion.

Minister for Tourism and Trade (Mr. McCreevy)

I move:

That Dáil Éireann approves the terms of the Marrakesh Agreement establishing the World Trade Organisation and the associated plurilateral agreements which were signed by the Minister for Tourism and Trade at the GATT Ministerial Conference in Marrakesh, Morocco, on 15 April 1994, and laid before the Dáil on 3 October 1994.

The Uruguay Round of multilateral trade negotiations commenced in 1986 and concluded on 15 December 1993.

At a ministerial conference in Marrakesh, Morocco, held from 12 to 15 April 1994, I signed, on behalf of Ireland, the Final Act embodying the results of the round, thus accepting the text as authentic and as reflecting what was negotiated. I also signed, subject to ratification, the agreement establishing the World Trade Organisation and three plurilateral agreements, the Agreement on Government Procurement and the Dairy and Bovine Meat Agreements.

Since the Marrakesh Agreement establishing the World Trade Organisation imposes a charge on public funds, there is a constitutional requirement that its terms be approved by the Dáil before it can be ratified. That is the purpose of today's motion. Following Dáil approval, the Tánaiste and Minister for Foreign Affairs, on my behalf, will seek Government approval to ratify the Marrakesh Agreement on behalf of Ireland and the necessary instrument of ratification will be deposited in Geneva.

The agreement imposes a charge on public funds in the form of an annual subscription to the World Trade Organisation. However, there is no new matter of principle here since Ireland has already been paying an annual subscription to GATT which is being replaced by the WTO. The subscription for 1994 is £320,750. Members of GATT contribute to its budget in proportion to their shares of world trade and a similar arrangement will apply to the WTO.

The Agreement must be ratified also by the European Union, since external trade policy in general is the responsibility of the Union rather than of its member states. The EU ratification process is under way and is expected to be completed by December at the latest. All other GATT members are engaging in, or have completed, their ratification procedures. An implementation conference in December will confirm that the results of the round will come into effect from 1 January, 1995, provided that most parties, including all the major ones, have ratified before the conference.

The Uruguay Round was debated at some length in the Dáil and Seanad on various occasions while the negotiations were under way. Therefore, the Houses of the Oireachtas have been kept well informed of developments during the negotiations and have already debated the economic effects of the Uruguay Round at some length.

Last year I commissioned and published a consultancy study on the impact of a GATT Agreement on Ireland. Also, I propose to publish next month a booklet entitled "A guide to GATT and its effects in Ireland". This booklet, which has been prepared in consultation with IBEC, the Irish Business and Employers Confederation, gives a general summary of the results of the Uruguay Round in various negotiating topics with particular emphasis on those aspects likely to impact most on Ireland's trade performance. I hope it will be of benefit to all who have an interest in trade matters.

The aim of the GATT is to provide a secure and predictable international trading environment and a continuing process of trade liberalisation. The liberalisation process has been carried out mainly through a series of rounds of negotiations of which the Uruguay Round was its eighth.

The text of the agreement, running to more than 26 thousand pages, was finalised at the Ministerial Conference in Morocco in April 1994. It has since been published by GATT and has already been laid before the House.

Ireland's policy in the negotiations was to support the conclusion of a global and balanced agreement, covering all countries and sectors in a manner consistent with the level of development of each country, while seeking to minimise the negative effects that any agreement might have on specific sectors in Ireland, such as agriculture and textiles. The Government believes this objective has been met and Ireland will benefit significantly from the overall improvement in the world economy and the creation of the stable trading environment which will result from the conclusion of the round.

As a result of the Marrakesh Agreement there will be significant reductions in tariff and non-tariff barriers with all developed countries and many developing countries reducing tariffs by 33 per cent or more.

The new agreement means that for the first time GATT rules and disciplines will apply to agriculture in a comprehensive manner. Of course, this was an area of huge importance to Ireland and my colleague, the Minister for Agriculture, Food and Forestry, will speak on the sector later in this debate. However, I would note here, that the outcome on agriculture was satisfactory for Ireland and the provisions agreed were consistent with CAP reform.

All clothing and textiles trade will become subject to normal GATT provisions over a ten-year period during which quotas will be gradually removed. This will be done in four steps. Because of the significance of the clothing and textile sector to the Irish economy, it was important to avoid any sudden liberalisation of trade which would adversely impact on that sector. The ten year integration period gives Irish industry a good breathing space for continued restructuring and improving its competitiveness. It also allows time for strengthened GATT rules and disciplines to take effect in areas such as dumping and counterfeiting. Through the EU, Ireland will have a say in determining what products should be integrated into GATT at the various stages, thereby ensuring that account is taken of the specific interests of this important sector to the Irish economy.

Another new area covered by the agreement is trade in services. Sectors such as tourism, banking, transport, construction, distribution, telecommunications, management consulting, medical services, accounting and legal services are all covered. The services sector accounts for almost 60 per cent of Irish jobs and for more than 50 per cent of Irish output. International competition has developed in many sectors and this trend is likely to continue. Up to now, opportunities for companies to carry out services work abroad were not underpinned by agreed multilateral rules and could be changed or removed at any time. GATT bindings give added stability and certainty to these opportunities. The services agreement is also a framework for progressive liberalisation in the years ahead.

Benefits for Irish exporters will also accrue from reduction or elimination of non-tariff barriers, through the new agreements on intellectual property rights, anti-dumping, import licensing procedures, rules of origin, subsidies and countervailing measures as well as an agreement on Government procurement.

Finally, I should refer to the creation of the World Trade Organisation, or WTO, to replace the existing GATT organisation. The development of the rules relating to the international trading system called for an organisation designed to ensure rules were respected and, if necessary, adapted and developed to meet changing circumstances. Implementation of new dispute settlement procedures will be one of WTO's key functions. The procedure has now been improved and made more automatic, transparent and certain.

The globalisation of trade and increasing interdependence of different economies and cultures is making the need for cohesion in world economic policy more necessary than ever. This will be part of WTO's role. Its increased status vis-à-vis other international institutions such as the IMF and the World Bank places it in a strategic position to contribute to the development of world economic policy from an international trade perspective. The emphasis must be on keeping markets open and rejecting measures that restrict or distort trade.

Provision has already been made for the WTO to deal with the links between trade and the environment. As part of its wide remit the World Trade Organisation may have to address a wide range of new topics, including social, competition and immigration policies as well as regionalism, and financial and monetary matters. Many of these are complex and contentious issues.

The world economy will benefit substantially as a result of the Uruguay Round Agreement. Recent estimates by GATT suggest that global income in 2005 may be more than 500 billion dollars higher than it would have been without the market opening agreed to in the round. There will be a major impact on the development of the economy of the European Union, since the Union is the world's largest trader. One job in every ten in the European Union is directly generated by exports.

The trading interests of Ireland, as a small open economy, are obviously best served by the existence of open, stable, trouble-free and barrier-free markets for our goods and services. The Marrakesh agreement will provide that environment. The general boost which is confidently forecast for the world economy will also provide opportunities for us to increase our trade in goods and services.

These opportunities can, if exploited by Ireland, lead to significant expansion of our exports and increases in foreign earnings. The consultancy study which I commissioned and published last year concluded that the Irish manufacturing and trade services sectors will gain substantially, in terms of output and employment, from the increasingly liberalised international trading system arising from the Uruguay Round Agreement. Using rather conservative assumptions, the study estimated that the Irish economy stands to gain in excess of 20,000 jobs from this deal in comparison with a Uruguay Round failure scenario.

We know from our experience that success in a free-trade environment depends on competitiveness and innovation. The degree of exploitation of the trade and growth opportunities that the agreement will create will depend on the response of industry — manufacturing, agriculture and services. The Government will contribute through the creation of the right economic environment and the pursuit of policies designed to improve the competitiveness and innovative capacity of the productive sector in Ireland. Export sales growth will ultimately depend on industry itself and I am confident that we can look forward to a continuation of the very favourable trends in recent years.

Mrs. Doyle

I thank the Minister for his comprehensive statement on the issues. I acknowledge that within ten minutes it is hard to do justice to the subject of the motion before us. I am speaking as Fine Gael's agricultural spokesperson and because of the time limit I will confine my remarks more particularly to the agricultural implications of the GATT agreement.

Major decisions on agricultural policy affecting Irish and EU farmers have been taken in recent times. The CAP reform decisions are being phased in during the period 1993-95 and the recent GATT decisions will be implemented between now and the year 2000. The policy framework for European agriculture to the end of the decade is now, hopefully, largely in place. However, some important issues are still outstanding. For example, the need for an efficient administration of CAP reform compensation and the need to secure EU compensation if the GATT decisions result in further cuts in excess of CAP reform. My concerns about CAP reform and the GATT are well known. Indeed, I have made my views known both here and in the Seanad peviously. The inescapable fact is that the policy environment facing agriculture has changed.

The final agreement on GATT was adopted by member countries on 15 December last. Negotiations were formally concluded at a ministerial meeting in Marrakesh on 15 April last. The agreement was signed on behalf of Ireland by the Minister present. The formal ratification of the agreement by Ireland will be by way of Dáil resolution and that process has begun today. The majority of member countries have yet to formally ratify the agreement. The US House of Representatives and the US Senate will not adopt the GATT agreement until 29 November. I suppose electoral considerations have delayed matters there and that is understandable. However, it is expected that Congress will approve GATT by a large majority. A new world trade organisation, the WTO, will replace GATT with effect from January next.

There were two stages in the GATT agreement, namely, the overall agreement negotiated by the EU on behalf of member states and the internal arrangements adopted by the EU to meet its international commitments given under GATT. For Ireland the Second Stage is as important, if not slightly more important, than the first. Members will recall that the former Minister for Agriculture, Food and Forestry and the present Minister, Deputy Walsh, received firm assurances that the internal arrangements would not lead to disproportionate burdens being placed on regions, such as Ireland. In a reply given in the Dáil on 25 February 1993, the Minister, Deputy Walsh, stated: "I can assure Deputies that in any such negotiations I will continue to fight vigorously for the necessary amendments to the current proposals so that what is eventually agreed will not require greater restrictions than those already required under CAP reform." We should remind ourselves of the commitment given by the Minister for Agriculture, Food and Forestry to the House. In that reply he went on to state:

I will in any event be insisting on firm commitments that our vital interests will be protected. I will also be demanding that the burden of any commitments must be shared equitably throughout the Community with due regard to the contribution which sectors make to the economy of a region. I will also seek to ensure that this country's dependence on agriculture, particularly agricultural exports, is fully taken into account.

The EU Commission formally adopted a draft basic Council regulation for the implementation of GATT at its meeting on 5 October, 1994. The regulation contains 13 separate annexes, each dealing with individual agricultural sectors. That whole package of measures is now being discussed by the trade committee drawn from member states.

The Commission hopes to have all the necessary discussions completed in time for the Foreign Affairs Council on 21 December 1994. The Farm Council will discuss the agricultural part of the agreement and hope to have their discussions completed in November. I look forward to hearing from our Minister for Agriculture, Food and Forestry about progress on the Farm Council view. At present the agricultural issues are being considered by the Special Agricultural Committee, which includes senior civil servants from all member states.

The Minister did not refer to the EU dispute about the Commission's competence. Perhaps he might deal with that when replying to the debate because it requires clarification. A fundamental disagreement has emerged concerning the competence of the Commission in relation to ratifying GATT, particularly in the case of new areas such as services and intellectual property. This could be of major importance to Ireland as it includes agricultural issues which are now included under GATT for the first time. The essential issue is whether the Commission has full competence in relation to all matters on GATT. The House needs an answer to that so that it can be sure that what we are doing today is not giving the Commission powers to ratify GATT before the European Court judgment indicating their views on the matter is with us. The issue is at present before the Court of Justice and a decision is expected by mid-November. Both the Commission and the member states signed the GATT agreement in Marrakesh, but the Commission had already referred to the European Court the issue of who had the right to sign the agreement. A code of conduct which would impose a "community discipline" on member states in matters relating to the WTO has been considered by member states. The draft council regulation confers on the Commission the power to deal with the implementation of GATT. This power will be exercised in conjunction with various management committees. While the management committees are made up of member state experts, the management committee procedure falls within the Commission's competence, and in the event of no decision being reached by the management committee the Commission have the power to act nonetheless.

I now come to some sectoral interests. The annex on dairying deals with imports, exports and other issues relating to tariffication. In a word, dairy farmers can expect a 4 per cent cut in their quota over the next few years and up to a 10 per cent decrease in the price of their product.

All imports and exports of dairy products will be subject to licences issued by the Commission. The EU will not put in place national quotas for the right to export subsidised products. An Irish position paper to the EU in July 1994 came out against national quotas. The licence to export, which is in effect a licence to receive export refunds, may be on the basis of tendering or be set on a periodic basis. It is envisaged that a security would have to be lodged with the Commission and would be refundable depending on whether the trader had succeeded in making the delivery within the time limit set. The wording of the draft regulation is quite vague on this issue and could also involve the Commission awarding licences without receiving a formal request or even awarding them to non EU traders. Perhaps the Minister for Agriculture, Food and Forestry could clarify this matter when responding to that area, which appears to be vague still.

The draft regulation provides for the first time for the management committee to select which products will be eligible for export refunds as distinct from setting the rate of export refunds. Licences will also apply to imports, including imports for minimum access, that is, 5 per cent of domestic consumption in the base period (1986-88) to be effected by the year 2000.

The non-annex II — processed dairy products, which include non dairy ingredients such as chocolate crumb — will be exempt from export licence requirements but the rate of refunds will be fixed by the management committee. Furthermore, these are not covered by the 21 per cent volume reduction but of course are subject to the 36 per cent budgetary restriction. It may be that butterfat in non-annex II products will not attract export refunds. That will have implications, particularly on price.

Casein is an industrial product and receives no export subsidy. While it receives a production aid, it will not be directly affected by GATT, by way of either volume or budgetary restrictions. The tariff on casein is to be reduced to zero.

Export refunds will be at the same level for the whole of the EU but may differ, depending on the country of destination.

Let me say a few words on the beef sector. Basically the same system will operate for the beef sector as outlined for the dairy sector. Without going into the problems in that area, I would like to know exactly how we plan to deal with the area of exports to third countries, which is extremely important for us. Apparently the one million tonnes per annum European quota to third countries is to be divided across the EU, not on the basis of countries but on the basis of individual firms tendering. Where does our Minister for Agriculture, Food and Forestry stand on this issue.

What is the position relating to growth promoters and their use by American farmers for beef production now that they have access to the European beef market? The FDA accepts growth promoters in beef production; we have a complete restriction on it here. This area needs rationalisation because it puts our farmers at a disadvantage competitively.

There is to be a 2 to 3 per cent reduction in quota in the sugar beet area. Cereals fare out much the same as under the Common Agricultural Policy commitments except that now we hear that the US is increasing its wheat production this year and has abolished set aside for wheat. We need a level playing field in this whole area.

We must question how free trade oriented the US is. The fact that GATT is here to stay and that future GATT rounds will seek to achieve further cuts in protection and support for EU agriculture does not mean that "free trade" is inevitable. European economies have very different objectives in terms of maintaining a viable rural society than is the case in the US. These desirable objectives cannot be sacrificed on the altar of "free trade". If European Union farmers have to observe restrictions and regulations which erode their competitiveness on world markets, the European Governments must ensure that future WTO agreements continue to compensate for this. Free trade must equate to fair trade.

Mr. O'Malley

Like Deputy Doyle, I will have difficulty in compressing into ten minutes what I have to say about this agreement, the successful conclusion of the Uruguay Round. It is of tremendous importance to this country and to the trading world generally. Had it not been successfully concluded, the losses suffered in Ireland, in the European Union and throughout the world would have been enormous. It is only right, therefore, that we should pay tribute to the man who, above all else, brought about a successful conclusion of the round.

It was successfully completed not at Marrakesh in April, where there was only a ceremonial signing, but in December of last year. I went to Brussels in December 1990 with a point on my pencil for the purpose of signing what we hoped was the conclusion of the Uruguay Round. However, because of problems, particularly on the agricultural side but also in other areas, we were not able to conclude it. There was one subsequent effort that also failed. It was only with the advent of Mr. Sutherland, which engendered a sufficient feeling of urgency in countries generally throughout the world, that it was concluded last December. It was a matter of great regret that he will not be the Director General of the WTO when it is established in January next. That job was there for the asking if he had chosen to go for it. He may have been under the misapprehension that he would be proposed for another equally important job. He made a mistake because he was not proposed by his own Government and failed, therefore, to get that job. The whole European Union has lost out, particularly in the light of developments since. Mr. Sutherland's achievement in bringing about a final conclusion of Uruguay Round after seven years is deserving of the greatest praise. He has brought great credit to this country and, indeed, great benefit to this country and the entire trading world.

In general the provisions of the Uruguay Round as finally concluded last December are beneficial to this country and to the European Union. I know of no country that, on balance, will lose out, because the strengthening of the trading rules and the expansion of trading rules into areas that were not previously covered has to be valuable to everybody concerned. It is in applying world trading rules to agriculture that the difficulties and sensitivities are greatest. Transition in this area will certainly be difficult and, at times, unpredictable for farmers in Ireland and in the European Union.

It is in our long term interest that there are specific, identifiable rules in trade, not alone in agriculture but also in services and in the areas known colloquially as trims and trips which are of substantial importance to this country. It is also very important that there is a proper dispute settlement procedure and I am glad that is included in this round. The uncertainty of dispute settlements was previously highly unsatisfactory and led to tremendous uncertainty as to what could or could not be done by trading nations and international trading companies.

I will avail of the opportunity in this discussion to deal with a matter referred to briefly in the House yesterday, which is of some importance, particularly because of the principle involved. The time available yesterday did not allow the matter to be discussed as only about one minute of Question Time was available. Because of the lack of time there is a possibility that what was said may convey the wrong impression. I refer to a procedure brought by the Commission against Ireland under Article 169 relating to the action of the Irish Government in respect of the GATT beef import quota. The Commission found it necessary to bring proceedings against Ireland because it believed it had flagrantly breached the Commission regulations. Ireland replied to that complaint on 5 March 1991 and the reply, signed by an official of the Department of Foreign Affairs, contains misstatement of fact of a serious nature. The aggrieved party in this case brought the matter to the attention of the Department of Foreign Affairs. That was referred to by the Tánaiste yesterday when he sought to convey that the aggrieved party was prepared to await the outcome of a Supreme Court appeal which the Department of Agriculture, Food and Forestry is bringing against parts of the High Court decision in this case, but that is not so. The aggrieved party complained to the Department of Foreign Affairs about the misstatement of fact in Ireland's reply to the Article 169 proceedings; he did not discuss the Supreme Court appeal which is a separate matter over which he has no control as he has to await its outcome.

I referred yesterday to the judgment of Mr. Justice Costello in the High Court and I used certain words which I wish to correct. While I do not think they misrepresent the findings of Mr. Justice Costello, they are not literally the words he used in the case. I wish to avail of this opportunity, the earliest available to me, to quote from the judgement his exact words in respect of the GATT beef import case. On the Department's version of the facts he said: "This was of course a fiction, known to be such by the Department". He went on to say: "that the description of the plaintiff as an agent was a formula devised by the Department and bore no relation to the commercial reality". He further stated: "To conclude, as was done, that the meat processors had `imported' the meat was a travesty of the true position". He said:

Nor need I express any opinion on the submission that the explanation for the Department's decision was that it had succumbed to pressure from a powerful economic group of traders. I have concluded that the Department acted in breach of its duties imposed on it by regulations — it is not necessary for me to conclude why it did so.

These quotations give a clear indication of Mr. Justice Costello's view of the version of events put forward by the Irish authorities.

A disservice had been done to the aggrieved party, who sought to draw the attention of the Department of Foreign Affairs to the misstatement of the facts by that Department, by the suggestion made by the Tánaiste yesterday. The views of the man concerned were misrepresented in what was said here and I am glad to have this opportunity to put the record straight in this respect. I hope that the question of the GATT import quota, which has had a very sorry history in recent years, can be put right, that the obvious injustice done to one individual company for the benefit of other companies in the same trade in this country will be rectified and that the huge losses that have been sustained will be reimbursed.

Mr. Rabbitte

I concur with the remarks made by Deputy O'Malley. The details of this case are well known to me and I look forward to redress of the matter and to a change of attitude, particularly on the part of the Department of Agriculture, Food and Forestry.

It is not surprising that the Minister's entire script deals with the expected advantages to Ireland and, to a lesser extent, to the European Union of the Marrakesh Agreement. I am not as convinced or as upbeat, nor, I think, are a great many economic commentators, about this matter as the Minister. Some of the assumptions are unprovable at this stage. That is not to say one does not expect advantage to accrue to Ireland and to the European Union as the major trading bloc. The Minister's view is rose tinted and it will be very interesting to measure his expectations against the outcome. It is remarkable that there is no reference in the script to the impact of this agreement on the Third World.

Since the time available to us is very brief and other Deputies will no doubt deal with various aspects of this matter I will simply make a couple of points about that aspect and its impact on the developing world. The Minister said: "The Houses of the Oireachtas have, therefore, been kept well informed of developments during the negotiations and have already debated the economic effects of the Uruguay Round at some length". I do not believe that is the case. I recall debating it here on a Fine Gael Private Members' motion, and very often we have confined it to the agricultural sector. Clearly, that sector is important but it is not the only one and there has been little discussion on such a wide ranging and significant agreement. Given the proposals relating to the World Trade Organisation, I am concerned that it legitimises the existing power structures, makes the poorer countries more vulnerable and facilitates the two great power blocs in retaliating against the poorer countries. I am disappointed that the Minister did not address this issue and I ask him to do so in his reply.

Some Third World organisations have argued, for example, that the loss in trade to Africa is of the order of £2 billion per annum. They are particularly concerned that Africa's role as a producer of non-tropical commodities is declining and that as a result it will be hardest hit. The price of non-tropical commodities has scarcely been addressed in the agreement. Commodities such as coffee, tea and especially sugar which are so critical to certain African countries have not been dealt with. I ask the Minister to address this question in his reply. Naturally enough, we have tended to look at this matter from a purely national perspective but it is a matter of concern so many years after the Brandt report was presented that we are still ignoring the dangers associated with a widening trade imbalance and the North-South division.

The Marrakesh Agreement copper-fastens the existing trade disparities between the developed and developing worlds. Two major trading blocs, the European Union and the NAFTA countries, have divided up the spoils leaving the poorer half of the world to watch from the sidelines. The agreement covers almost two-thirds of world trade and 114 countries. Two years after the much vaunted Rio de Janeiro summit which was going to radically rejig relations between the developed and developing worlds, the GATT has combined with the World Bank to undermine progress towards fair trade and sustainability. While we have debated the issue of agricultural dumping we have neglected to consider the effects of social dumping, the legitimation of the world's division into a bloc of rich consumers and another far less advantaged bloc of cheap labour providers.

Anyone who doubts the effects of GATT on developing countries need only look at the effects on Mexico of the GATT sub-agreement. NAFTA. American and Canadian companies have migrated south at an astonishing rate to take advantage of the low wages and lack of union protection in Mexico. The long term effects on Mexico are likely to be devastating. The rich North persuaded the developing world to come on board by holding out the lure of world trade expansion amounting to around $200 billion. Yet the Secretary General of the OECD, the organisation which made the estimate, admits that the figure is "highly theoretical". I question the tired theory of "trickle down" economics; the developing world was told that improved economic performance in the North would stimulate demand and allow the south to sell more products.

At a time when the trade imbalance is ostensibly at the top of the international agenda the developed world has mastered the art of aid hypocrisy. The Maastricht Treaty urges that all European Union policies must take into account the effect on developing countries, yet at the same time subsidised meat, for example, is exported to the sub-Saharan region, undercutting indigenous producers and depriving thousands of their livelihood. By the same token the Rio de Janeiro Summit committed the developed countries to the principle of sustainable development, yet the GATT document on trade and the environment implicitly rejected this concept. In effect the document stated that in the event of conflict between free trade and unilateral environmental protection measures, free trade must win out every time. The market is everything and anything, including environmental or social protection measures, which distorts that market is rejected out of hand. The world's economic leaders failed to recognise that there is a fundamental difference between protectionist measures using tariffs and quotas to protect inefficient and exploitative industries at the expense of others and protectionist measures used to protect the weak.

To a certain extent I agree with the authors of that document. I would much prefer internationalised environmental and social protection measures to unilateral measures but in today's world we do not have the choice, it is unilateral measures or nothing. Every meeting of the international economic élite, be it the OECD or the group of seven, pays lip service to the concepts of free trade and development co-operation, yet it was that economic élite which pushed ahead with the GATT regardless of the social and environmental cost. The developing world was faced with a Hobson's choice between a flawed agreement and economic expansion.

On the question of democratic accountability, the new World Trade Organisation, the successor of GATT, is an un-elected and unaccountable body responsible neither to citizens nor to national parliaments. The democratic deficit, it seems, is not the sole preserve of the European Union. The Marrakesh Agreement will undoubtedly benefit Ireland in the short term. In the long term, however, the disparities which the agreement legitimises could be detrimental to us all.

Minister for Agriculture, Food and Forestry (Mr. J. Walsh)

I propose to comment on the agriculture aspects of this agreement and do not propose to dwell on the history of the agriculture negotiations which has been debated many times in the House. I recall that our major trading partners, especially the United States, initially sought the almost total elimination of all agriculture support measures. When they failed in this objective they continued to insist upon severe restrictions, particularly in relation to subsidised exports. Other Ministers and I fought hard to secure changes to the original proposals put forward by our trading partners and succeeded in getting significant modifications which enabled a GATT agreement on agriculture to be concluded in December 1993.

I am satisfied that the final agreement on agriculture is compatible with the reformed CAP and that the Union will be able to continue to support the agri-food industry and rural areas in a positive manner. This is a significant achievement given the opening negotiating positions of others.

All of the foregoing is history and the main focus now is on the rules and regulations to be adopted by the Union to implement GATT commitments. A special working group has been established by the Council of Agriculture Ministers to oversee the implementation of these regulations and will commence its discussions on Friday, 21 October.

I am satisfied that the GATT agreement on agriculture does not pose any threat for the agri-food sector. It does present a challenge to and open opportunities for the sector. Taken with CAP reform, the future for the agri-food industry will be a more open one with the emphasis on market orientation. This change has been signalled for some time and the industry has responded well. We now have an efficient and competitive agriculture industry.

The Government will continue to develop policies which foster the agri-food industry. Considerable resources have been invested in the industry in recent years. Some £323 million to help develop the industry was invested from 1987 to 1993. An Bord Bia has been established to ensure that an aggressive marketing programme is developed for agri-food products. Furthermore, the food sub-programme for the period 1994-99 envisages total investment of a further £641 million in the industry.

Our interest today is in the GATT Marrakesh Agreement. I am satisfied that the agreement reached on agriculture is a reasonable one and that it addresses the major concerns raised by Ireland during the course of the negotiations. Overall, the conclusion of the GATT agreement will lead to expanded trade activity and will benefit all sectors, including the agricultural sector. Deputy Doyle raised a number of points. A special working group has been set up by the Council of Agriculture Ministers and will commence its deliberations on implementing regulations on Friday next, 21 October 1994. It is true also that the Commission proposes to implement trade commitments by way of licensing. The rules and procedures for allocating licences have yet to be agreed. Member states will be fully consulted on this matter. The Commission proposals envisage granting a significant level of responsibility to the Commission itself in the management of the licensing system. We will, of course, be insisting on the Council of Ministers being given a greater role in this area.

I recommend approval of the terms of the Marrakesh Agreement.

Mr. Gallagher

(Laoighis-Offaly): As chairperson of the Sub-Committee on Development Co-operation of the Joint Committee on Foreign Affairs I wish to say a few words on the occasion of the debate on ratification by Dáil Éireann of the GATT agreement. The points I raise were dealt with at length in the course of a Fine Gael Private Member's motion last December. I will make three points with a view to ensuring that Ireland, as a new member of the World Trade Organisation, will raise them at that level. We cannot rewrite history but we can learn lessons from it and move forward.

There is a lack of proper consultation and involvement by and with developing countries as evidenced by the Uruguay Round of GATT negotiations. Essentially, the United States, the European Union, Japan and, to a lesser extent, the Cairns group dictated the terms of trade between themselves without, in my view, due regard and provision for the needs and concerns of the developing countries. When we in Ireland participated in the debate on the setting up of the Single Market we recognised that the freeing up of the market could have a downside for less developed or developing countries and we ensured that provisions were put in place to guard our interests and redress the forces that would militate against us in the setting up of the free market. I do not believe that enough attention was given to this need on a global scale and I believe that trade liberalisation will affect in a detrimental way many of the developing countries, without sufficient safeguards for their position being put in place. I appeal to the Minister to address this issue at the World Trade Organisation.

As evidenced by the Rio de Janeiro Summit, there has been admission internationally of the links between and interdependence of the economy, development and the environment. GATT went against many of the recommendations on sustainable development issued from the Rio de Janeiro Summit. The unfettered liberalisation in many areas, particularly in primary production, will serve to worsen the environmental degradation being suffered by many of the less developed countries. I believe this issue will have to be faced by the World Trade Organisation. GATT made a public disassociation of the links between the environment, ecology and economy and I think this will have to be repudiated and reversed.

We need to look at the question of accountability. The Minister said in his speech that the World Trade Organisation will become a much more important organisation than GATT because of the need for cohesion in world economic policy. The Minister also likened the status of the World Trade Organisation to the IMF and the World Bank. Earlier this year the Sub-Committee on Development Co-operation produced a report on the role of the IMF and the World Bank in reinforcing the debt problem in developing countries. I sincerely hope that the World Trade Organisation will not become another lever of enforcement of these disadvantageous policies on developing countries. I asked the Minister to ensure that non-governmental organisations and the people of the developing countries who will be affected by the World Trade Organisation policies will have an opportunity to participate in the decision-making of that body.

Minister for Tourism and Trade (Mr. McCreevy)

I thank Deputies for their contributions and in the short time available I will try to deal with some of the points raised. Deputy Doyle queried the competence of the Commission vis-à-vis member states. This matter and the issue of the respective competencies of the European Union and member states relating to new areas covered by the Uruguay Round such as services, transport and intellectual property have been referred to the Court of Justice. It had been feared that the court's decision would not be given until next year. Fortunately, the court indicated recently that it would give its decision by mid-November, so this danger has been averted. In the meantime the European Parliament has been consulted with a view to having the agreement formally ratified by the Community by the deadline of 1 January. Both the Commission and the member states have agreed to await the outcome of the court case and therefore I do not propose to comment further on it.

Mrs. Doyle

Should we be even discussing it today in advance of the court decision?

Mr. McCreevy

Our advice is that irrespective of which way the court decision goes it will not cause difficulties for us. The court has intimated it will make its decision by mid-November.

Mrs. Doyle

Does that mean we will have an opportunity to have a further debate on the issue in this House?

Mr. McCreevy

I do not think so. We will have to await the court decision.

Mrs. Doyle

Is it possible?

Mr. McCreevy

It is a possibility. Deputies Rabbitte and Gallagher raised issues relating to developing countries. We could have a very interesting debate on this subject and I know that Deputy Gallagher is an expert in this field. This issue has been raised not only by these two Deputies but by many people outside the House. Membership of GATT, shortly to be known as the World Trade Organisation, is voluntary and contractual. Developing countries themselves decide if they wish to become a member and the extent of trade liberalisation they wish to offer. The agreement explicitly provides for the need to take account of the special problems of developing countries, especially the least developed among them. This is mentioned explicitly in the preamble to the agreement. Also, a ministerial decision forming part of the agreement provides that least developed countries will be obliged only to undertake commitments and concessions to the extent consistent with individual development, financial and trade needs. The decision also provides for special consideration to be given to the interests of least developed countries in the implementation of the Marrakesh Agreement. A further ministerial decision specifically commits Ministers to review the food aid and technical assistance needs of least developed and net food importing countries in the light of the liberalisation flowing from the agreement.

Developing countries as a group are expected to benefit substantially from the agreement. The GATT secretariat estimate that the agreement will lead to a minimum 14 per cent increase in their trade. This compares to a 7 to 8 per cent increase in the case of OECD countries. Developing countries will benefit in particular from increased access to markets in developed countries, especially in areas such as textiles and tropical products. This will be of particular benefit to those developing countries which, having gone through painful economic adjustment programmes, felt cheated by the high tariff barriers their exports often faced in developed country markets.

Deputies Rabbitte and Gallagher also raised the question of the impact of this agreement on the environment. This is one of the major issues for the new World Trade Organisation. It is already highlighted in the preamble to the WTO Agreement which talks of:

the optimal use of the world's resources in accordance with the principle of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development.

We decided at Marrakesh to set up a special WTO committee to examine the link between trade and the environment. The agreed aim is to achieve harmony between expanded trade and protection of the environment, in accordance with the principle of sustainable development. We must ensure that the gains achieved in recent years through such measures as pollution controls and increased recycling are consolidated and enhanced, while also ensuring that spurious environmental reasons are not advanced as a form of protectionism, especially by developed countries. The issues involved are complex but I am confident that the new WTO committee will achieve a satisfactory and workable system.

Deputy Gallagher raised the question of accountability. It is intended that the World Trade Organisation will be more open and accountable to all, including the non-governmental organisations. This matter is being examined with a view to preparing future proposals.

In the short time available we have covered a wide range of topics worthy of seminars or debates inside and outside this House. I thank the Deputies for their co-operation.

Mrs. Doyle

We should ensure that we have another opportunity after the European Court judgment to come back into this House and have a slightly more extended debate. I know many of my colleagues would like to have contributed and I would have preferred an extra five or ten minutes. I am sure others share my view.

Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.

Dáil Éireann debate -
Wednesday, 19 Oct 1994