Seanad Éireann debate -
Thursday, 18 Dec 1969

Vol. 67 No. 8

Imposition of Duties (Confirmation of Orders) Bill, 1969 (Certified Money Bill): Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time."

Minister for Industry and Commerce (Mr. Colley)

An explanatory Memorandum has been circulated for the information of Senators.

The purpose of this Bill is to confirm eight orders made during 1968, under the Imposition of Duties Act, 1957, and the Finance Act, 1962. It is a statutory requirement that such orders must be confirmed not later than the end of the calendar year following that in which they are made if they are not to cease to have statutory effect at the expiration of that period.

The first of these orders, No. 169, provided for the remission of the customs duty on imports from Canada of certain conifer wood. The order also provided for an increase in the rate of customs duty for imports of certain motor-cars of Canadian origin. Under the terms of the 1932 Trade Agreement between Ireland and Canada, Canada was entitled to the special preferential rates of duty enjoyed by the United Kingdom. If this Agreement was left unamended, Ireland would have been required to extend to Canada the reduced rates of duty applicable to the United Kingdom when the Anglo-Irish Free Trade Agreement came into operation. The Canadian Government agreed to the amendment of the Agreement to provide that the special preferential rates of duty which had applied to Canadian imports before the Anglo-Irish Free Trade Area Agreement came into operation should continue to apply, subject, among other things, to the remission of the duty on conifer wood.

The reduction in duty on imports of this wood from the United Kingdom and other countries was necessary in order to comply with the provisions of the Free Trade Area Agreement and the General Agreement on Tariffs and Trade. It was also provided that the special preferential rate enjoyed by Canada in respect of certain motor cars should be eliminated. This was desirable in connection with the scheme for ensuring the continuation of the Irish motor assembly industry.

The next order, No. 171, restored protection for certain solid fuel stove-type boilers and for certain shaped pieces of polyurethane material. These goods had inadvertently become free of duty as a result of the introduction of the new Brussels Nomenclature form of tariff classification. During the negotiation of the Free Trade Area Agreement an understanding was reached with the British Government about the restoration of protection in such cases.

The third order, No. 172, enables the rates of duty at which fully built-up motor vehicles may be imported under licence to be varied, in accordance with the scheme for the motor assembly industry. The purpose of this scheme, which was agreed with the manufacturers and assemblers of British motor vehicles, is to ensure the continuation of the Irish motor assembly industry on a long term basis.

Order No. 173 provided for a reduction in the minimum specific duty on stockings of silk or man-made fibres of United Kingdom origin. Before the Free Trade Area Agreement was negotiated, all stockings of silk or man-made fibres were subject to import quota restrictions and to ad valorem duties. It was originally intended that when the Agreement came into force these quota restrictions would be abolished. Following representations by the Irish stocking manufacturers, British agreement was, however, secured to a proposal to make stockings of a value not exceeding 50s per dozen pairs subject to a quota arrangement and a minimum specific duty, in addition to the existing ad valorem duty. The British Government later requested the abolition of the minimum specific duty on the grounds that it prevented British manufacturers from availing of the import quota to which they were entitled under this arrangement. Following further negotiations with the British Government and consultations with the Irish industry, the minimum specific duty was reduced from 16s to 12s per dozen pairs, this rate to stand still until overtaken by the normal reductions under the Free Trade Area Agreement.

Order No. 174 was made by the Government on the recommendation of the Minister for Finance. It provided for the third tariff reduction on goods of United Kingdom origin in accordance with the terms of the Free Trade Area Agreement. In addition, the Order provided for the maintenance of the special tariff concessions in favour of certain goods of Northern Ireland origin and gave new tariff concessions on cellulose tape and tyre valves of Northern Ireland origin; reduced import duties on rose bushes and certain bulbs, tubers, et cetera, and certain rubberised textile fabrics, in accordance with commitments made by the Government in the Kennedy Round of Trade negotiations; raised from 2,000 to 3,000 copies the average circulation limit for exemption from the import duty on daily newspapers and made a number of editorial changes in the form of customs tariff.

Order No. 175 imposed a duty on imports of tufted material. In 1965, the Government imposed a minimum specific duty of 15s per article on tufted bedspreads, in addition to the existing ad valorem duty, in order to protect the Irish manufacturers against imports of tufted bedspreads made from low-cost cotton. Subsequently, a new trade developed in the export from Northern Ireland of tufted material in the piece, made from low-cost cottons, which was not itself liable to duty. This material could be converted into bedspreads at a minimal cost, thereby circumventing the duty on tufted bedspreads. Following representations from the Irish Manufacturers and negotiations with the British Government, it was decided to impose a duty on imports of the tufted material.

Order No. 176 provided for the restoration of customs duties on imports of coated copy-making film. This film is another item which had inadvertently lost protection in the changeover to the Brussels Nomenclature form of customs classification and protection was restored in accordance with the understanding with the British about such cases.

Finally, Order No. 177 imposed a duty against imports of certain crown corks from sources other than the United Kingdom and increased the rates of duty applicable to certain plastic footballs imported from countries other than the United Kingdom. In order to simplify the new tariff, that is, the Brussels Nomenclature form of tariff, certain suspended duties, among them one on crown corks, were removed on the introduction of this tariff in 1963. It was found, however, that the home manufacture of crown corks was threatened by large-scale low-priced imports from the Continent and a duty was re-imposed at the request of the manufacturers. The duty on certain plastic footballs from sources other than the United Kingdom was increased following an application by the home manufacturers who were unable to complete with imported plastic footballs, particularly those from West Germany. This increase brought the duties on these footballs into line with the duties payable on other plastic balls.

I shall be glad to give any further information required in connection with the Bill.

Mr. Russell

We will give the Minister every facility in getting this Bill through quickly. I notice from a quick look at the Dáil debates that very little time was expended in discussing this Bill and I think that we would favour just as quick a procedure in the Seanad. I should just like to ask the Minister one or two questions arising out of his introductory statement. First, how will the reduction of these various duties affect the terms of the Anglo Irish Free Trade Agreement? In other words, do they cut across it? Will we have to face competition under the various heads in the long term? I assume the import of motor cars from Canada is negligible. I have not seen such a car and I do not know whether anybody else has.

With regard to the importation of conifers, would the Minister explain, for the benefit of those not concerned with the industry, how significant conifers are as raw material for the industry concerned? This may not be strictly relevant but I should like to ask the Minister what steps are being taken in the country to encourage the establishment of a motor manufacturing industry similar to the type of car-manufacture or car-assembly in Sweden in connection with the Volvo car or the Saab, whereby parts, not necessarily manufactured in the country of origin, are brought together and used to manufacture what is essentially a Swedish car. This probably does not arise strictly on this Bill but perhaps the Minister would be good enough to give us a little more information on it.

Order No. 173 provided for a reduction in the duty on "stockings of silk or man-made fibres of United Kingdom origin". I can recall that there was an import tariff on articles containing man-made fibres being imported into Great Britain. I wonder is this a logical sequence to the abolition of that duty? Is this just a very transitory arrangement? We must speak of our membership of EEC because we are likely, in any event, to come up against what the Minister has described in his statement as the dumping or importation of low-cost products from the Continent. I think that refers to some of the items which are protected by tariffs. If that is so, does the Minister think it is wise, notwithstanding the fact that we would all accept the necessity for protecting Irish manufacturers and Irish employment in industry, to turn our faces against the reality of the situation which will exist in the course of a few years. The Government and the Minister share the view that we will have to compete against these Continental manufacturers in the future. The statement was made in the Dáil that we would have to raise tariffs against imports from Northern Ireland. We would all wish that the largest possible amount of cross-border trade was done between the two sections of our country, not only for economic reasons but also for other reasons as well.

Finally, I was interested to read in the latter part of the Minister's statement where he proposes to impose a duty on certain plastic footballs from sources other than United Kingdom. Perhaps the Minister might give us some information on the extent of this industry which is quite unknown to me. The Minister might tell us whether it has any export potential. We are prepared to facilitate the Minister in a speedy passage of the Bill through this House.

Dr. Sheehy Skeffington

This particular Bill is an annual event and it used to be the practice to allow it to go through practically without debate. It is a good thing for us to regard it as an obligation on us to examine each duty proposed by the Bill and to ask relevant questions on it. I compliment the Minister for the printing of the Bill and for the explanatory memorandum which gives a pretty full account of the duties imposed and the reasons for them. I am not quite sure why the same order, the Imposition of Duties (No. 169) Order, 1968 should at the same time reduce the duty on conifer wood from Canada to nil and place a fairly high duty on imported cars from Canada. The two things seem to be unconnected. It would seem to me to be two orders and not just one.

I refer now to the Imposition of Duties (No. 171) Order. The explanatory memorandum says this order came into operation on the "25th April, 1968 imposing duties at rates of 32 per cent (full, preferential and special preferential)" and "19.2 per cent (United Kingdom) on certain solid fuel stove-type boilers". Similar wording occurs in relation to other orders. I find it odd to be told there is a full duty, a preferential duty and a special preferential duty and in this case they are all the same. There is also a special, special preferential duty for the United Kingdom. There is something odd about full preferential, and special preferential duties but there is yet another one with no particular nomenclature which you might call super grade or premium grade and which applies to the United Kingdom. Words are beginning to lose their meaning if the same duty is charged and yet is called full preferential or special preferential.

Senator Russell mentioned another point. The explanatory memorandum refers in relation to Order No. 177 to crown corks and to artificial plastic footballs as if there were natural plastic growing on trees or natural footballs. The word "artificial" is a bit odd in this context. The Order refers only to plastic footballs. "Artificial plastic" seems to be an odd phrase. The Department of Agriculture may discover there is natural plastic or a natural football. Otherwise I do not know the meaning of the word "artificial" in this connection.

Mr. O'Higgins

I notice from the Minister's statement that he mentions that the purpose of this Bill is to confirm eight Orders made during 1968 and that it is a statutory requirement that the Orders be confirmed not later than the end of the calendar year following that in which they are made. Perhaps there is a good reason for this. Why is the Seanad presented on virtually the last day of its sitting for this year with a Bill of this description? If the Orders were made in the year 1968 I should have thought that 12 months would be a reasonable time within which to have the Orders passed by the Dáil and the Seanad. I am not suggesting this is the fault of the Minister. I would like to know the explanation of it. This could be noted, in a mild way, as a protest that the Seanad should be asked to deal urgently with business which could have been dealt with any time within the past 18 months.

Mr. Keery

I should like to ask a few questions as well. Our balance of payments problems is one of imbalance between imports and exports and I should like to join with Senator Russell in hoping our exports of home-manufactured footballs will increase. At the same time when we are constantly having problems in keeping down our imports I wonder why we have an item like this for the importation of plastic footballs from East Germany. This is hardly due to consumer demand; does it arise because some wholesaler takes the initiative to import goods from East Germany or because of some balance that must be maintained under a trade agreement with East Germany? I should like to have a comment from the Minister on that because it appears to me that if there is one thing we do not need it is imported plastic footballs from East Germany.

There is another small matter — perhaps the information may not be immediately available — but all politicians have the habit of thinking in local terms and when I saw an order affecting the import of tufted materials I thought of a firm near me — Diana Cowpe (Eire) Limited — which manufactures a candlewick-type of tufted product. Naturally I am interested in anything that will improve their competitive position and I should like to know if in fact, apart from Dún Laoghaire, there is a developing industry for this type of tufted material in the rest of the country.

We have been speaking much today about newspapers, television and communications generally and another item which caught my attention was that affecting the import duty on daily papers. One of the things I have noticed, without having any quantitative assessment of it, is that British newspapers seem to be growing in popularity in this country. I wonder if the rate of average circulation limit for exemption from import duty on daily papers to 3,000 copies would in some way encourage the development of circulation by these newspapers or if most of them already have a circulation in excess of 3,000 copies, in which case this marginal change will not have a very big effect? I appreciate that the answers to these points may not be available but, as Senator Sheehy Skeffington has mentioned, we are glad to have an opportunity to ask about a couple of lay points which cross one's mind when one reads this Bill.

Mr. Colley

I should like to say in answer to Senator Russell's query that the various alterations dealt with in these orders do not cut across the terms of the Free Trade Agreement but in the main they are in furtherance and in execution of that Agreement. The House will have noted a number of items dealt either with matters that were inadvertently left without protection when it was intended that they should be protected due to change in tariff headings or were matters that were dealt with after consultation or negotiation with the British. The framework of many of these is provided in the Free Trade Agreement; it contemplated such things as the orders mentioned here which arose out of the Agreement or in consultation with the British Authorities.

With regard to the question of motor cars, the House will recall that some time ago we discussed here the Motor Vehicles Registration Bill which gave a legal framework to the agreement arrived at after lengthy negotiations between assemblers here, the British manufacturers, the British Government and our own Government. The aim and effect of that agreement, and consequently of that legislation, was to ensure the continuation of the motor assembly industry on a long-term basis. With regard to the question of a motor manufacturing industry as distinct from assembly, I cannot say offhand what efforts may have been made in the past to set this up — I think there have been some — but the economics of the scale have hitherto not made this a very attractive proposition. It is quite clear that for this to be attractive you either must have a substantial export market or have a completely confined home market and neither circumstance seemed a proposition, and I think this has been the main reason this has not developed. I am aware of some efforts to set up such an industry on a fairly small scale in the beginning are at present being examined. I have very good reason to believe that when we enter into the EEC — and I say when, not if, because I am reasonably optimistic about this — then almost certainly there is likely to be a large-scale motor manufacturing industry set up in this country. My contacts with some of the largest motor car manufacturers in the world have led me to believe that this is a very likely development arising out of our entry into the EEC.

With regard to the question of duty on man-made fibres I do not know if there is a misunderstanding about this. However, I should like to make it clear that there was a substantial duty on our exports of man-made fibres into the British market until the Free Trade Agreement which abolished that duty. One might say this has led almost directly to the setting up of a new industry in Sligo which is under construction at the moment, and to certain other advantages. With reference to the question of competition from the Continent, I would point out that of all the items mentioned in these orders the problem of competition from countries of the EEC arises in one case only, that of crown corks; in the other cases this was not the problem. I would also point out with regard to goods from Northern Ireland the orders reduced duty on goods except in one case and that is for tufted bedspreads.

Senators will note that I described the trade which developed from Northern Ireland, at least for materials coming in the piece, related to material imported into Northern Ireland from low cost countries. It was not what might be called a genuine Northern Ireland product and, consequently, we need not worry unduly about the order that is made here which puts a stop to that trade. I would repeat that in other cases where there is any reason to import from Northern Ireland we give an advantage to goods from Northern Ireland over those from other places, including Britain.

With regard to conifer wood, the figures available for imports into this country of all types of Canadian wood amounted to £42,272 in 1968 and £10,598 for the first six months of this year, so the House will realise that the trade involved is not very large. Senator Sheehy Skeffington raised the point as to why this was dealt with in the same order as the one increasing the duties on Canadian motor cars. It may seem a little odd on the face of it but the reason is that under the trade agreement which we had with Canada, the Canadians would have been entitled to the same preferential rates of duty as the British were getting under the Free Trade Area Agreement. Part of the price we paid was this reduction of duty on Canadian wood.

I have noticed that some Senators seem to be somewhat intrigued about this question of plastic footballs. With regard to the point raised by Senator Sheehy Skeffington about artificial plastic this thought also occurred to me when I saw that phrase but I can only tell the Senator that this apparently is the technical description but in the layman's terms it seems illogical. However, I do not think that it will affect the validity of the order.

I am glad to be able to tell the House that the Irish manufacturers of these plastic footballs are located in the West of Ireland and that they are very successful. Not only do they make these footballs but they make all kinds of plastic toys. I understand that they are the second largest manufacturers of plastic toys either in Ireland or Britain and they export a very substantial amount of their products. What was involved in this case was that imports from East Germany can only be described as being at ridiculously low prices and this was affecting their market in this regard. As indicated by Senator Keery, there was no particular reason why we ought to allow this to go on. We do not have a trade agreement with East Germany and the balance of trade has not been very favourable to us. We cannot say positively how they were coming in but we can surmise that they were brought in here by distributors who were offered them in London or elsewhere through agents of the East Germans and the reason they were being bought was because they were being sold at such ridiculously low prices.

Mr. Russell

Does that mean there is no export potential for those articles?

Mr. Colley

There is a very substantial potential. I covered this when I said that a high percentage of the firm's products were being exported.

Mr. Russell

Sorry.

Mr. Colley

I visited this firm some two years ago and I remember being told there that they and, as far as I can remember, one other firm in the world, were the only people who had mastered the art of making a plastic football that was completely spherical.

Regarding the point raised by Senator Sheehy Skeffington about different tariffs and so on, in the particular order to which I referred three of them are at the one rate so they are referred to together as being such but in many cases each one is quite different. As he says, these have grown up during the year. We are not the only people who use these terms; they are used internationally but depending on what agreements have been made during the year terms must be used to describe the different kinds of duties. With regard to the point raised by Senator Keery, I should tell him that there are two firms here making tufted bedspreads.

The question of increasing the number of copies of newspapers to 3,000 to qualify for exemption from the import duty has been mentioned also. I should imagine that most of the newspapers coming here from Britain are above that level but there are some having small circulations and they are exempt in this way. In connection with one particular newspaper which I consider to be a worthwhile one, it might not have been a very good proposition to continue sending the newspaper here if this duty had to be paid but it was considered worthwhile to increase the figure to 3,000 because largely it is a worthwhile newspaper from our point of view.

Senator O'Higgins raised a point about the delay in bringing this Bill in. There are quite a number of reasons for this delay but basically I must accept the responsibility for it myself. I have expressed dissatisfaction at the delay myself because it has occurred in the past and complaint has been made about it. There are a number of good reasons why this delay occurred but I do not think it need have been as long as it was and I accept responsibility for the undue delay. I trust that it will not occur again.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, reported without recommendation, received for final consideration and ordered to be returned to the Dáil.