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Joint Committee on the Secondary Legislation of the European Communities debate -
Wednesday, 6 Dec 1978

Generalised Tariff Preferences Scheme for 1979.

The final item on the agenda is Senator Mulcahy's draft report on Generalised Tariff Preferences Scheme for 1979.

As the Committee know the scheme is going to the Council shortly and it is important that we should have a look at it before that.

The generalised tariff preferences system under which industrialised countries each undertook to set up and operate a scheme of tariff preferences in favour of imports from developing countries comes up every year for renewal and there is an implied progressive increase in the freedom which these developing countries have to bring certain goods into Community countries. Those preferences do not involve reciprocal action, so it is something that the EEC is granting to developing countries and we have been generally favourable. It also involves partial exemption from customs duties for certain processed agricultural products, but these are largely of the tropical or Mediterranean nature and do not affect us.

The Commission's proposal was to involve textiles which we would see as a sensitive product, but we gathered from our discussions that there is no intention to proceed with the textile proposals on this occasion, and that for 1979 there will be just a nominal increase of from 5 to 10 per cent.

The other item of importance here is that some of the quotas for some of the products are based on value which is calculated on the basis of the unit of account. It is now being proposed that the European Unit of Account be applied to the scheme which means that the £ would have a value of 1.5 EUA and this could mean something like a 60 per cent increase in the case of certain products which are regulated by value. We gather that there is a proposal to phase this in over ten years, so there should be no great strain as far as we are concerned.

Another area which we were concerned about was the area of leather goods, and it is not intended to proceed with that one. One of the difficulties with which we are concerned is that it seems that in some South American countries the export of hides is controlled, which makes the price of hides in their country pretty low and makes them very competitive in terms of processed leather goods. In terms of our situation it only makes up for 1 per cent of our imports, but we are keeping an eye on it. All in all, since no increase is proposed on the ceiling for footwear in 1979 and since it is not intended to impose other than a nominal increase for textiles, we do not see any marked adverse effect on Irish industry. That has been the position to date.

In our discussions with CII we came up with a feeling that more information about the control of imports and the evolution of freer trading should be made available to Irish industrial and business circles. There was a feeling that there was some confusion for instance about the effects of Lomé in terms of the 52 African, Caribbean and Pacific countries, about exactly where GATT affects us, and about the generalised tariff preferences scheme. As well as that there are various bilateral agreements all affecting trading in Irish products. We recommend that the EEC Commission be asked to organise a seminar in Dublin which would be in association with the Confederation of Irish Industry and the Department of Industry, Commerce and Energy with a view to briefing commercial and industrial interests on aspects of these matters which would be of concern to them now and which might be of more concern in the future. Basically, that is the essence of the report.

Can Senator Mulcahy elaborate more fully on page 4, paragraph 9 of the Report as far as agricultural processed products are concerned?

The products are of the Mediterranean tropical type and they do not bother us. That is why we did not give too much attention to it.

This does not really arise but one particular industry in Waterford is experiencing some difficulty. Senator Mulcahy mentioned that leather goods only make up 1 per cent of our imports. How serious are these imports in the overall sense as far as this country is concerned?

Obviously, any opening up of our markets to imports from abroad will affect those people, but there is no change in the conditions. I am glad that exports to Britain are mainly involved in that arrangement. There is no change in terms of the competitiveness of our products here, but only where we are trying to get into Britain. Leather goods are coming into Britain made of hides which are of highly deflated value due to the fact that exports of hides are controlled by some South American countries.

I emphasise the point made by Senator Mulcahy in relation to holding a seminar in Dublin to brief Irish business interests on the effects of GSP and on its implications for their businesses. We should not overlook that point because it is one of the more important ones. The Committee were surprised to learn that even in 1975 and 1976 the previous Committee were aware that Irish industries were not aware of the implications.

What is the prospect of getting such a seminar?

This is a matter the Chairman might pursue with the EEC and the Commission, and I am sure they will be willing.

If a sufficient number of people were involved.

Obviously the people from the Confederation of Irish Industry found this an acceptable idea.

Will someone propose the adoption of the Report?

I propose adoption.

I second that.

Paragraphs 1 to 16, inclusive, agreed to.

Draft Report agreed to.

Ordered: To report accordingly.

That completes the business.

The Joint Committee adjourned at 4.50 p.m.

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