I shall take up first the last point made by Senator Quinlan which was also referred to by Senator McGuire. It relates to the reduction of tariffs apart altogether from the general ten per cent. It is a fact that both sides of industry—in this context I refer to industries operating in Ireland and industries in Britain—have had a full opportunity of making before the Industrial Development Authority the point of view each has in regard to tariff reductions. Senators seemed to imply that the Industrial Development Authority had come into this exercise of their own volition. That is not the case as a rule. An application to review is made usually as a result of representations to the Board of Trade in Britain by a particular industry in Britain and the standards applied by the IDA, who are the reviewing authority, are that they will continue to give, after they reduce the tariff, the home industry reasonable protection and, at the same time, give a reasonable opportunity to the firms in Britain who share in the Irish market. That is pursuant, of course, to the trade agreements that have been in existence between the two countries for a considerable time.
The other point made by Senator McGuire had reference in the main to the statement of the Chairman of Seafield Fabrics in respect of the duty payable on the importation of man-made fibres or articles containing man-made fibres into Britain. In the old trade agreements with Britain there were a few commodities such as, artificial silk—art silk as it was then known—excepted from the free tariff entry into Britain. When art silk disappeared as a commodity or as a component part of a garment, man-made fibres emerged, of course, but the British applied the tariff exception, as applying to Ireland, to man-made fibres and they continued to maintain a tariff on man-made fibres.
Unfortunately, garments containing man-made fibres, no matter how small the element, were also liable to the full value of the garment itself and the tariff. For example, if there was a 20 per cent duty on man-made fibres and if there there was only a ten per cent content of that fibre in the garment, the tariff would not be levied on that ten per cent content but on the value of the whole article. That is what really made the man-made fibre duty on goods leaving this country on the British market so prohibitive. There have been certain easements in the severity of that duty but nothing sufficient to give the man-made fibre industry generally or the producers of garments containing man-made fibres in this country a reasonable opportunity on the British market.
We have lost no opportunity in bringing home to the British the difficulty that is involved for our exporters in regard to this duty but having regard to the sensitivity of the market in Britain in regard to these commodities, particularly against imports from other countries such as the Far East and certain British dependancies, where labour is of the low cost variety, the British find themselves unable to yield to any reasonable extent to our request to have the duty reduced considerably or removed altogether. I can assure the House that in any new negotiations we will have with the British the man-made fibre duty will be one of the principal topics we will bring up. In fact, on all occasions, both at Ministerial level and senior official level, when these negotiations are conducted regularly, the man-made fibre duty is one of the things to which we give high priority.
In regard to the ten per cent tariff reduction effected on 1st January, 1964, and 1st January, 1965, if I take Senator Quinlan's own example it is the best indication of how it operates. He referred to a duty of 40 per cent, assuming that was the duty before the first tariff reduction was effected. In other words, if 40 per cent was the duty on the 31st December, 1962, the duty operating as of 1st January, 1963, would have been 36 per cent and that four per cent reduction would continue. For example, the duty operating as of the 1st January, 1964, would have been 32 per cent. The four per cent of the original tariff was the measure of the annual reduction. I hope that makes the matter clear to the Senator.
The Senator suggested that because the 40 per cent duty was in operation on 31st December, 1962, if the industry could withstand the four per cent reduction right through 1963, the 40 per cent tariff was too high. The Senator made a suggestion of that nature. One of the purposes of the implementation of that tariff reduction was to induce Irish industry to become more efficient. It was not the only measure we adopted in order to do this. At the same time, we made technical assistance grants available to enable industries to get survey teams, business consultants and technical consultants of all descriptions to have a look at the industrial process involved and to make recommendations as to how the industrial process could be improved. We also made grants available up to 25 per cent of the cost of a major new adaptation scheme which the industry would carry out, or special favourable loans. All these things were done as part of this inducement to Irish industry to become more efficient and the effect of them all, including the ten per cent reduction, was to make Irish industry more efficient and to enable it to withstand the reduction that was being made in the tariffs and ultimately help it withstand the impact of free trade.
I have been told by industrialists, who viewed the first and second tariff reductions with some concern, that this has, indeed, been a shot in the arm to them. By gearing themselves to greater efficiency, by cutting down waste and restrictive practices of one kind or another, they found they were able to take this reduction without any new capital. There were no industrial reductions on the home market, nor any disemployment as a result of these tariff reductions. At the same time, the Senator will remember that there were two rounds of wage increases the industry had to bear. Therefore one, in these circumstances, could not anticipate significant price reductions because of the greater competition Irish industry was being exposed to.
I might say, too, that many of these industries which had certain protection at home are exporting industries as well. In order to broaden their basic production these industries had to try to expand their export markets. As Senators are aware, it is not uncommon practice in export industries to charge slightly less for the exported article than might be charged for it on the home market. Accordingly, as some of our industries expanded their exports they were naturally getting less perhaps for their increased output in price than they would otherwise have been getting. It is not uncommon practice and it is necessary in many instances because, unless goods are produced at a price commensurate with those abroad, they will not naturally compete with goods of the home country or with goods imported from other countries on that same home market. It takes the home market and the export market in many cases with prices married to cover the capital injection into that particular industry.
There are figures available as to the effect of all this including the ten per cent tariff reduction on the prices on the home market. As I pointed out, there were countering elements that could avoid price reductions as a result. I do not think there were any other specific questions asked but, as Senator McGuire pointed out, there was really only one Order which extended the scope of customs duties. Two or three—Nos. 134 and 135 in particular—restored the status quo ante our adaptation of the Brussels Nomenclature. In other words, the adaptation of the Brussels Nomenclature ultimately removed the protection we enjoyed before we adopted the Brussels system. Therefore, two of them were restoring the status quo. All the others, the five specific ones which the IDA recommended, and No. 142 which implemented a 10 per cent overall reduction, were tariff reductions. I think this is one occasion, including last year, when I have been able to come into this House and have not received rebuffs as to the extent of tariff protection we are giving to our industries. There certainly is no feather bedding involved in the legislation I now propose to the House.