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Seanad Éireann debate -
Wednesday, 13 Dec 1972

Vol. 73 No. 15

Imposition of Duties (Confirmation of Orders) Bill, 1972 (Certified Money Bill): Second and Subsequent Stages.

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

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

During the year 1971, nine orders were made under the Imposition of Duties Act, 1957, and the Finance Act, 1962. The 1957 Act provides 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. The Bill before you today proposes to confirm the nine orders made during 1971.

The first of these orders, No. 189, was made by the Government on the representations of the Minister for Finance and is of a type with which Senators will be familiar. The Anglo-Irish Free Trade Area Agreement provides that on 1st July each year duties against UK goods are to be reduced by 10 per cent. These reductions are effected by an annual order and the order now proposed for confirmation provided for the sixth tariff reduction of 10 per cent on these goods and for the sixth reduction of 10 per cent in the protective elements in revenue duties on certain United Kingdom goods.

This order also provided for the elimination in one step of the protective element in other revenue duties on goods of United Kingdom origin, for example, newspapers, periodicals and hydrocarbon oils. Senators will recall special arrangements for a somewhat accelerated rate of reduction of duties in respect of certain goods of Northern Ireland origin involving a preference in favour of these goods vis-à-vis UK goods. The order provided for the maintenance of this preference. In addition, the order provided (a) for a reduction in the import duty on unassembled motor cycles as a concession to domestic motor cycle assemblers and (b) for a number of changes in the Customs tariff necessitated principally by amendments in the Brussels tariff nomenclature.

The Irish sugar confectionery manufacturers complained to me about the erosion, due to increased prices, of the protection afforded by the specific duty on sweets and toffee, at the time amounting to 6p per lb. (Full); 4p per lb. (Preferential) and 2p per lb. (Special Preferential, UK and Northern Ireland). As the manufacturers appeared to have a good case in that imports were increasing to the detriment of the industry, Order No. 90 provided for increases of 2p per lb. in the specific rates of duty and for imposition of an alternative ad valorem duty of 40 per cent on sweets and toffee from all sources.

Article 1 (5) of the Anglo-Irish Free Trade Area Agreement provided for a review by the Government in the year commencing 1st July, 1970, to ascertain whether an appreciable rise in unemployment had occurred in any sector of industry or region, or was threatened as a result of the reduction of protection under the agreement. If the Government were satisfied that difficulties of this nature had occurred or were threatened, they and the British Government had to consider jointly whether the problem could be dealt with by altering the arrangements for the removal of protection up to 1975, or by extending the transitional period beyond that time.

Article 1 (5) further provided that, if the Irish Government, following the consultations, concluded that the difficulties were so exceptional that they could not be dealt with in this way, they could then exclude a limited number of the goods concerned from the free trade arrangements. Consultations between the Governments were not concluded by 1st July, 1971, and the Governments agreed that, pending the completion of the consultations, the tariff reductions due to take place on that date should not be made in respect of certain iron and steel products, certain agricultural machinery, certain domestic electrical appliances, aluminium holloware, blankets, mobile homes, joinery and leather footwear and should be at a rate lower than 10 per cent in respect of furniture, ropes and cordage and brushes and brooms. Order No. 191 gave effect to this agreement between the Governments.

The changeover to the Brussels nomenclature form of Customs tariff from the form in use before 1963, resulted in an inadvertent loss of protection for certain goods, because of changes in description or definition. Most of these have already been rectified as they came to light. Order No. 192 provided for the imposition of Customs duties on certain metal badges and footwear heels which had inadvertently incurred a loss of protection on the changeover to the Brussels nomenclature.

Order No. 193 increased the minimum specific duty from £3 to £15 on tyres of non-UK origin and of minimum dimensions 7.00 inches by 16 inches. The order was made following representations from the Irish tyre manufacturing industry seeking greater protection of the truck tyre market from increasing imports of large tyres from State-trading and Far Eastern countries.

Order No. 194 was made by the Government on the recommendation of the Minister for Finance. The order provided for a considerable number of technical changes in the Customs tariff necessitated by changes in the Brussels tariff nomenclature and for a number of other minor editorial changes in the tariff. The Customs Co-operation Council meet in Brussels periodically to review the classification of goods in the Brussels tariff nomenclature and to ascertain if technological advances in certain areas necessitate the reclassification of some goods in different headings of the nomenclature.

When the council recommend changes in classification, individual countries often find that new national subdivisions must be raised in the tariff in order to maintain the existing rates of duty for the goods involved. An example of the type of operation involved in Order No. 194 is concerned with mixtures of chemicals and foodstuffs of the kind used in the preparation of human foodstuffs. These items were previously classified under tariff heading 38.19 as chemical products or preparations and were free of duty in the Irish tariff. The council ruled that they should be reclassified at tariff heading 21.07 as food preparations. A new subheading had, therefore, to be raised at tariff heading 21.07 of the Irish tariff to provide for the retention of the free rates of duty for these goods.

Following a resolution adopted unanimously by the United Nations Conference on Trade and Development in regard to the grant of tariff preferences in favour of developing countries, Order No. 195 implemented Ireland's participation in a scheme of such tariff preferences. The tariff preferences extended by Ireland consists of a reduction of 33? per cent below the full rate in the Customs duties on certain industrial products originating in developing countries. These reductions do not apply to certain sensitive products, mainly textiles and footwear.

Order No. 196 was made by the Government on the recommendation of the Minister for Agriculture and Fisheries and gave effect to the measures agreed with the EEC for imposition of new and amended duties on fish, ryegrass seed, tomatoes and apples. The quantitative controls at present operated on imports of these commodities will be abolished following our accession to the EEC and, in order to allow for gradual exposure of Irish producers to full EEC conditions, it was agreed that special arrangements could be made to strengthen our duty protection.

The effect of Order No. 197 was to increase the duties on outerwear of United Kingdom origin from 1st January, 1972, from the rates then in operation, ranging from 9.6 per cent to 16 per cent, to the levels which were in force in 1969-70, ranging from 16 per cent to 24 per cent. Customs duties on outerwear were being phased out on textiles as on other products of British origin in accordance with the Anglo-Irish Free Trade Area Agreement.

Recessionary trends, which had continued to create problems for the industry on a world-wide scale throughout 1970, showed little signs of a recovery during the year 1971. I became satisfied that a further reduction in duties affording increased opportunities for access to our markets by British manufacturers would result in a serious redundancy in the Irish textile industry. Following consultations between the Irish and British Governments, the Irish Government decided to exclude certain outerwear from free trade under the provisions of Article 1 (5) of the agreement to which I have referred earlier. Having excluded the goods from free trade, it was possible to increase the duties to the levels which were in force in 1969-70.

I recommend this Bill to the House.

As the Minister has said, this is a Bill to confirm certain orders, nine in all, which have been made at dates not specified in this Bill. When the Minister is replying he might give us some idea of when these orders were made.

This might be described as a mixumgatherum type of Bill as it seeks confirmation of nine orders in all, covering reductions in certain instances, increases in duties, deferments or modification of reduction in duties, reimposition of duties, technical changes and Custom duty preferences. At first sight it might seem that the Bill should receive very careful consideration by the House, but as it is merely a Bill to confirm orders already made, the House need not unduly delay its passage.

I should like to refer to one aspect of the Minister's speech, which is his reference to the action taken under Article 15 of the Anglo-Irish Free Trade Agreement to protect principally the clothing industry. This follows on the procedures laid down in this specific article. I should like to query the Minister on two grounds. First, I should like to suggest to him that he and his Department have been somewhat dilatory in bringing this section into effect, or perhaps the section is not sufficiently effective or operable quickly enough to prevent heavy redundancies in certain sections of our industry. I refer specifically to the woollen and textile industries and the footwear industry. They have suffered greatly during the past number of years.

The Minister has expressed the view that it was difficult to act with the promptitude necessary due to the fact that indications up to approximately 18 months ago did not confirm what later happened in these industries. For that reason it was not possible to make a case to the British Government that heavy unemployment was about to occur in these sensitive industries.

I do not altogether follow that argument because according to the Anglo-Irish Free Trade Agreement a period of 12 months—July, 1970, to July, 1971—was laid down during which the Irish Government could examine the situation in regard to certain industries and if they were satisfied that unemployment had taken place or was threatened, to use the Minister's own words, they could then consult with the British Government and, provided that both parties were satisfied as to the soundness of the case, they could take action to protect these industries or a particular sector or region according to the terms of the Anglo-Irish Free Trade Agreement.

It is often a temptation to be wise after the event but it seems to me that either these procedures have proved too slow—the Minister is satisfied he acted with all due promptitude—or else they are not suitable for application where an emergency arises fairly quickly as has happened in some of our oldest established industries during the past two or three years. The Minister could have acted under other sections in the Anglo-Irish Free Trade Area Agreement. I refer specifically to Article 19, paragraphs 68 and 69, which seem to me appropriate to deal with the situation which has arisen in the textile and the footwear industry. I quote from paragraph 69:

Paragraph 2 of the Article enables advance action to be taken where an appreciable rise in unemployment is anticipated in a particular sector of industry or region due to the causes described in the preceding paragraph.

I suggest to the Minister that with the information available to his Department from the Industrial Development Authority, from the Confederation of Irish Industry, from the trade unions and other private enterprises and semi-State bodies, earlier action could have been taken to protect these sensitive industries during a difficult period.

I am not suggesting that we should regard protection as a long-term objective. We are living in a free trade area and will have to compete with imports from our partners-to-be in the Common Market. Therefore, there is a serious obligation on industry, as there has been in the past ten or 11 years since we first applied for membership of the EEC, to equip itself to withstand competition from outside sources. But there are some sensitive industries—the Minister will be aware of some in his own constituency—such as the textile and woollen industries which for traditional reasons are not sufficiently flexible to adapt themselves in a short period. Many of these, such as the textile and woollen industries, have been established for a long period and there are not just physical but also psychological difficulties in adjusting to the wider Common Market.

I suggest to the Minister that these old-established Irish industries, many of which are the sole or the main source of employment in rural towns and villages, deserve special treatment. They cannot be treated in the same way as a new industry which is export-oriented with possibly established markets, with outside capital and technical capital know-how available. They are in a peculiarly difficult position and for that reason the Minister should have acted earlier in these industries to prevent the large amount of unemployment which has taken place and the loss, in many cases, to middle-aged and older men who will find it difficult to adapt themselves to different types of employment in the manufacturing industry.

It is very necessary that we should learn by mistakes made, and if mistakes have been made this House will accept an admission from the Minister that action was not taken in time and an assurance that, as he is demonstrating in this Bill, action is now being taken where there is threatened unemployment through unfair imports. This Bill highlights this problem and I should like to hear the Minister state he is now prepared to take action under Article 19 to ensure that no further unnecessary unemployment will arise through delayed action or for reasons which may be temporary.

In recent years wool has become less popular than some of the substitutes that are now turned out by vast industrial concerns in Britain and on the Continent. There is, however, an indication that wool is coming back into favour again. The quality of wool is becoming more appreciated. If the woollen and textile industries were protected and given an opportunity to survive over these difficult years they would again play an important part in the industrial life of this country. I mention the woollen and textile industries because they have been uppermost in the minds of the public during the past two or three years. There are also other sensitive industries, which, for reasons perhaps not apparent to the general public but which should be known to the Minister and his Department, should be given special assistance to help them during this difficult period.

Speaking from personal experience, I have no time for the industrialist who sits down and does nothing to re-equip his industry to prepare for free trade. He is not alone letting his country down but he is also letting his workers down. I would have no compunction in having such people replaced if necessary and their businesses taken over by some other more enterprising concern or operated through the aegis of Fóir Teoranta or some other semi-State body. But there are old-established industries who are finding the going very difficult at present. They have been traditional employers in rural areas for many generations. They have been nurtured for the past 30 or 40 years in a situation of high protection. It is difficult for such firms and principals to re-orient themselves at comparatively short notice to the type of cut-throat competition which we will face under Common Market conditions. I am pleading for a number of special cases, mainly industries in rural areas. For the reasons I have given I would ask the Minister to give them special consideration and to act promptly before the worst happens. Once the unemployment actually occurs it is very hard to put back the hands of the clock. The Minister has several sources from which to get information. I have mentioned some of them: the Confederation of Irish Industries, trade unions, Fóir Teoranta, the Industrial Credit Company, the regional development organisations, and county development teams. All these people are closely in touch with the industries in their own counties. There should be some form of continuing consultation between the Minister's Department and these various organisations to ensure that there will be an early warning before disaster strikes a long-established industry.

I do not think the other sections of the Bill call for any great comment. They indicate that the Minister is taking timely action in the various trades such as sweet manufacturing, sugar confectionery, tyre assembly industry and others to ensure that unfair competition will not cause disruption of these industries. I am glad to see that a one-third preference is being given to imports from certain underdeveloped countries. Provided such imports do not cause disruption to our own industries I think this is a well worthwhile step in the right direction and should be encouraged. The Minister has referred specifically to textile and footwear imports. I should like to ask the Minister if there are other imports which will be allowed in at this special low preferential rate that might compete with existing Irish industries. If so, even our most charitable instincts would preclude us from putting any Irish industry at risk.

Several of the orders deal with technical changes required to bring us into line with the Brussels nomenclature. I do not feel I need comment in this regard. I should like the Minister in his reply to deal with the point I raised about protection. I am not satisfied that the procedures laid down under Article 1 are sufficiently easy of quick implementation. I would suggest that the Minister could act under Article 9 to prevent serious injury to Irish industry, particularly over the next five years when protection will be slipping away and our industries will have to face competition from England and Europe.

This Bill highlights the difficulties for Irish industry in the context of free trade. There has been a world-wide recession in textiles and we have been affected here. We have also had redundancies in the boot and shoe industries. Free trade is something we will have to live with. It takes one's mind back to the coming into power of the Fianna Fáil Party in 1932. They then established Irish industries, very successfully spear-headed by the late Seán Lemass as Minister for Industry and Commerce. Many industries were established and much-needed employment was given. These industries succeeded because of high tariff protection. Many of them would not have lasted very long only for the fact that they sheltered behind a very high tariff wall. That was many years ago. We are now living in the 1970's. We can call this the age of free trade. I sympathise with the Minister and the Government in their efforts to sustain industries within the context of free trade.

The big question now is how many of our industries can succeed in free trade conditions. Very shortly we will be in Europe. At the moment our industries are facing competition from Britain and the Six Counties and feeling the breeze. It is an example of what they will face when we become full members of the EEC and are competing with the industrial giants of Europe.

There are one or two questions arising out of the Bill which I should like to put to the Minister. He said in his opening statement:

Article 1 (5) of the Anglo-Irish Free Trade Area Agreement provided for a review by the ascertain whether an appreciable rise in unemployment had occurred in any sector of industry or region, or was threatened as a result of the reduction of protection under the agreement.

In other words, the Government could, if they felt that a particular industry was in difficulty, consult with the British Government and the tariffs would be reduced on that particular commodity. Is there scope for such negotiations in the EEC context if some of our industries are unable to compete as a result of dumping or free trade? The Minister also states:

Order No. 196 was made by the Government on the recommendation of the Minister for Agriculture and Fisheries and gave effect to the measures agreed with the EEC for imposition of new and amended duties on fish, ryegrass seed, tomatoes and apples.

This is the important sentence:

The quantitative controls at present operated on imports of these commodities will be abolished following our accession to the EEC.

When we talk about quantity we are talking about dumping. Therefore, will there be no limitation on the amount of goods allowed into the country? If this is to apply in the agricultural and industrial sectors our industries are heading for a very difficult time.

As Senator Russell has said, this Bill covers such a wide range and is so retrospective in its effect that it is very difficult to deal with it comprehensively at a stage when all of the orders to which we refer are a year old and more. The best way to deal with the matter is to reply to Senator Russell's question about the date from which the orders became effective, which was not contained in the explanatory memorandum. Those orders were made during the calendar year 1971. For the record, I will give the date on which the orders came into operation: Order No. 189 came into operation on 1st July, 1971. There is no doubt about this order. Order No. 190, in relation to the increased protection for sweets and toffee, came into operation on 6th July, 1971. Order No. 191 came into effect on 1st July, 1971. Order No. 192, relating to metal badges, footwear heels and the nomenclature clear-up, came into operation on 27th July, 1971. Order No. 193 in relation to tyres, came into operation on 25th November, 1971. Order No. 194 another nomenclature clear-up— which was made on 14th December, came into operation on 1st January, 1972. Order No. 195, referring to undeveloped countries, which was made on 21st December, came into operation on 1st January, 1972. Order No. 196, made on 23rd December on the recommendation of the Minister for Agriculture and Fisheries, in connection with the duties on fish, ryegrass seed, tomatoes and apples came into operation on 1st January, 1972.

Order No. 197, which was made on 31st December and deals with the increase in the rate of customs duties on outerwear and referring them back to the existing rates two years previous, came into effect on 1st January, 1972. I have given these particulars in order to clarify the dates from which the orders became effective.

One can anticipate that the questions in relation to these orders will dwell mainly on Order No. 189, dealing with the sixth reduction in protective tariffs, and Order No. 197 which was made at the end of last June and became applicable in relation to increasing the protective duties on the importation of outerwear.

Senator Russell's criticism was similar to that made in the Dáil by Deputy Donegan. It made reference to the fact that I might have moved earlier in the discussions which were held between this country and the representatives of the UK on the half-term revision of the Anglo-Irish Free Trade Area Agreement. There was no question of any protection being lost by reason of an alleged delay in starting the consultations with the UK representatives. The preparation for the action allowed under the terms of the Anglo-Irish Free Trade Area Agreement was begun as far back as January, 1970 when a Departmental working group were set up to carry out an exhaustive survey of each sector of Irish industry in order to ensure that when the review talks would commence potentially affected industries would be taken into consideration in any question of extending or maintaining protection. That working group were set up six months before the beginning of year in which the discussions were to take place.

This group made their reports to me in October, 1970. At that stage the working group identified 21 different industries which seemed to require action under Article 15. It was felt in those cases that the prolongation of protection might be justified. The industries covered in that list were discussed and cleared with the Confederation of Irish Industries, and they agreed with the conclusions reached by the working group which, in turn, forwarded its recommendations to me. The Department of Finance and the Industrial Development Authority were represented at the discussions between the working group and the CII.

Following the submission of the working group's report to me a further and even more detailed examination of the selected industries was undertaken. This led to the final preparation of the individual cases for presentation to and negotiation with the British. That comprehensive work was completed in March, 1971, and the first formal meeting with the British took place in April, 1971. Set out under the agreement was the arrangement that the discussion should take place in the year ended 1st July, 1971, but those discussions did not commence formally until April of that year.

Much of the criticism has been based on the belief that time was lost in not opening those discussions earlier in the year. The object of the exercise was to ensure that preparation for the discussions would be so comprehensive and up to date that no industry which might on 1st April, 1971, need some type of additional protection by way of maintaining protective tariffs would be left out. As proof of the fact that there was no disadvantage to us, an interim arrangement with the British had been agreed before 1st July and with effect from that date, which ensured that there was no loss of protection in any sensitive area as a result of the continuation of the negotiations beyond that date. The negotiations started formally in April but did not conclude for quite some time and actually continued well into the present year.

Not alone was the additional protection not lost but the interim arrangements made, which gave extensions in respect of certain industries at that time, provided for the retention for one year of a higher level of duty than would otherwise have been permitted on several products. We got protective duty on caravans, certain agricultural machinery, corrugated sheeting and in regard to other items, at the end of the full-scale consultations it had to be conceded to the British that the protection was not required. However, there was an interim protection from 1st July, 1971, extending to 1st July this year for articles for which the demand for protection was not justified. I cannot see how it can be justifiably claimed that there was any laxity on our part in this regard.

Senator Russell spoke sincerely and genuinely about sensitive industries. In his comment on the later order he mentioned and welcomed the arrangement under Order No. 195 where we have given 33? per cent preference in relation to imports from developing countries. He said that in my introductory remarks I spelled out that the reduction in tariff did not apply to certain sensitive products, mainly textiles and footwear. I would like to ensure the Senator and the House that sensitive industries were taken into account in giving this protection. There is no benefit accorded to the developing countries which could adversely affect any industry here.

Senator Russell also mentioned the footwear industry. He made reference to Article 19 in connection with it. One of the difficulties in negotiating with the British authorities arises from the operation of the Anglo-Irish Free Trade Area Agreement. In circumstances where our difficulties are matched, as they often are, with similar difficulties in the textile and footwear industries in the UK, it is obvious that a very good case must be made before the UK will agree to increases in protection for us. This is quite understandable. As an indication of the Government's awareness of the necessity for doing everything possible for the sensitive footwear industry here, the quota on leather footwear, which was due to be terminated on 1st July, 1968, was extended to 1st July, 1970. Under Article 19 of the Anglo-Irish Free Trade Area Agreement we had power to extend protection unilaterally for an 18-month period but, in fact, we succeeded in extending the quota protection for a two-year period by agreement with the British.

Every possible effort has been made under the terms of the agreement to protect sensitive industries here. Senator Russell referred to old rural industries which have been built up behind walls of protection over a period and said that they needed the special attention of my Department.

No industry has got more attention than the industry to which so much reference has been made in recent times, that is, the woollen and worsted industry. Consultants were commissioned last year to make a report to me. Anybody looking objectively at that report or looking at the CIO reports of ten years ago and the COIP reports of a couple of years ago in relation to this will realise that warnings have been given to that industry over the past ten years, and especially to management, drawing attention to the pitfalls and dangers that lay ahead.

The Government have provided liberal amounts of money—and have been criticised for so doing—to try to bolster up a number of those industries over the last few years. Successive Ministers for Industry and Commerce have drawn specific attention to the availability of re-equipment grants, re-adaptation grants, consultance advice grants, and have done everything possible to try to encourage—not to compel—those industries to have a very close look at themselves with a view to re-equipping for what lies ahead.

Everything possible has been done for those sensitive industries, and will continue to be done, in order to help them over the problems they have met with. Senator Russell, in reference to the woollen industry, spoke about the transfer of preference from raw wool to the new synthetic and the problems that brings.

I should like to refer to the point made by Senator Fitzgerald in regard to the dangers of dumping in an EEC situation. I am sure the Senator is aware that special provision has been made in Treaty of Accession to enable us during the transitional period to apply our own dumping legislation. We can use the existing dumping legislation and may take protective action against manufactured articles that may be dumped into this country. It has also been agreed that safeguard measures on the lines of those available in existing member states will be available to Irish industry during their transitional period.

Senator Fitzgerald raised this matter in relation to the order I made at the request of the Minister for Agriculture and Fisheries to deal with the importation of frozen fish and rye-grass—Order No. 196. He said that these quantitative controls would have to be abolished on our accession to the EEC. However it was agreed during the negotiations for accession to the EEC that special arrangements could be made to strengthen our duty protection and thus allow for a more gradual exposure of our producers to the full EEC conditions. I outlined this in my introductory remarks on the Bill.

Duty on tomato imports were normally operative only during the months of June to October. At other times they were free of duty. Our duties on apples apply throughout the year. It was agreed that, in lieu of our quantitative controls on tomatoes and apples, we could apply a system of compensatory charges on imports of these products. This compensatory charge which is in the nature of a levy, will be related to the difference between our prices and the Community prices for the products and will give a better protection than the duties. Of course, the compensatory charge system will not operate during the months of April and May in respect of tomatoes, or during July and most of August in respect of apples. This arrangement should be of benefit to producers of those articles in this country.

Does that apply only during the five-year period to 1977? What happens after 1977?

I am talking specifically of the situation during the transitional period. I have endeavoured to cover the items raised by both Senators during the discussion.

Question put and agreed to.
Agreed to take remaining Stages today.
Bill put through Committee, reported without recommendation, and received for final consideration.
Question proposed: "That the Bill be returned to the Dáil."

I should like to mention Order No. 189 in the Schedule, where it refers to the elimination of one step of the protective element in other revenue duties on goods of United Kingdom origin, for example, newspapers, periodicals and hydrocarbon oils. Is that likely to pose any threat to the Irish newspaper industry?

It is not.

Are Irish newspapers not subject to VAT?

At a reduced rate.

British newspapers are not?

The main thing is that it does not affect the industry in this country. I discussed Order No. 191 at some length. I am still not clear about Article 19. Why would it not be appropriate to use it instead of Article 15 where there was a question of an emergency situation? If I understand the Minister correctly, the protection necessitated by the textile industry did not come into effect until the 1st July, 1971, although he mentioned later on in his speech:

Recessionary trends, which had continued to create problems for the industry on a world-wide scale throughout 1970 showed little signs of a recovery during the year 1971. I became satisfied that a further reduction in duties affording increased opportunities for access to our markets by British manufacfacturers would result in a serious redundancy in the Irish textile industry.

That suggests that the Minister became satisfied in 1971 and, therefore, the action to prohibit a further reduction in tariffs took place during 1971 —I think, 1st July is the operative date. The troubles in the industry started before that date and that was the point I was making. The procedures seemed to be too tedious. There were various steps, such as investigation by the Irish Government, then joint consultation with the British Government, then the Irish Government looked into the case again and then the final action was taken by way of order. That seems to me to be too tedious and long or else it was not being applied quickly enough to protect the woollen and textile industries.

Although I give the Minister credit for making a good case, the fact is that heavy redundancies have taken place in these industries, and I suggest that earlier action might have been taken if the Minister had operated under paragraph (69) of Article 19. The Minister could have taken quicker action unilaterally without going through all these lengthy procedures. I am not suggesting that the investigations made by the Department of Industry and Commerce were not thorough and comprehensive, but the Minister did not need any investigations. The writing was on the wall for this industry unless something was done quickly. That was the point I was trying to make.

I want to say that I did not cover this particular aspect in replying on the Second Stage. In my opening remarks I mentioned that we were at this stage talking about orders which were made 12 months ago. In the contribution which Senator Russell has made now, he was talking about a situation we had assumed to have existed in 1970. In relation to Order No. 197 Senator Russell quoted me as saying:

I became satisfied that a further reduction in duties affording increased opportunities for access to our markets by British manufacturers would result in a serious redundancy in the Irish textile industry.

Order No. 197 was made on the 31st December, 1971. Order No. 189, which is the principal order covering the 10 per cent reduction in duties, came into operation on 1st July, 1971, following discussions with the British Government.

In connection with the woollen and worsted industry we have had a certain amount of redundancies and threats of more redundancies up to now, but no case could be made to the British Government with regard to redundancies up to 31st July, 1971. It would have been impossible to use Article 19, which the Senator referred to, because that article specifically says:

If in the territory of either party (a) an appreciable rise in unemployment in a particular sector of industry or region is caused by a substantial decrease in internal demand for a domestic product, and (b) this decrease in demand is due to an increase in imports from the territory of the other....

That means that, if there had been an appreciable rise in unemployment in the woollen and worsted industry caused by a substantial decrease in internal demand and if it could be established that that redundancy and that decrease in demand had been created by imports from the United Kingdom, then I would be justified in arranging to put on quantitative restrictions.

The situation was not so, because output and exports by the woollen and textile industry as a whole, excluding carpets, had been rising substantially in the years 1965 to, and including, 1970. This brought me to the situation where I made Order No. 197 on the 31st December, 1971, which was the last date upon which I could make such an order because of circumstances due to EEC entry.

This order was made to increase the rates of Customs duties on certain outer garments of United Kingdom origin specifically to meet what was obviously becoming a problem in the woollen and worsted industry and to give an element of protection to that industry in 1972. At that stage I had discussions with the industry and the trade union movement and had agreed with them on the commissioning of a report from a firm of consultants. It became obvious at that stage that the most effective action I could take on behalf of the industry was to withdraw those goods from the trade agreement and impose increased duties on them. I put the same levies back on them as had been imposed against their importation in 1969-70. Article 19 could not be invoked in relation to that problem at that stage. I do not know whether I clarified this for the Senator, but this was the reasoning behind this decision.

The circumstances had not arisen then in order to make the case.

Exactly. This was one of the justifications for not opening discussions with the British until as late as possible in the period prior to 1st July, 1971, in order to ensure that all possible indications of detrimental effect on industry could have been taken into consideration, and even at that time neither of the factors covered in Article 19 could have been taken into account.

The Minister could act. Unemployment and redundancies had been created. It was not a question of threatening then; it was an actual fact.

Not before 1st July, 1971.

It was 31st December, 1971, the Minister said.

That is different. We are talking about the situation which existed at 1st July, 1971, when I was to have my discussions under Article 1(5).

Question put and agreed to.
The Seanad adjourned at 5.50 p.m. until 3 p.m. on Tuesday, 19th December, 1972.