Seanad Éireann debate -
Thursday, 21 Nov 1985

Vol. 110 No. 2

Report of Joint Committee on the Secondary Legislation of the EC—Multi-Fibre Arrangement: Motion.

Professor Dooge

I move:

That Seanad Éireann takes note of Report No. 17 of the Joint Committee on the Secondary Legislation of the European Communities: Multi-Fibre Arrangement.

I have no intention of making a substantial contribution to this debate but I would just like to comment that we are glad to have a report of the Joint Committee on this complex and difficult problem. We have in this instance a case where there is a conflict between our interest in regard to our own industry in this country and our attempts to see a degree of justice in the world in North-South relationships, and to see how we can reconcile our attempts to assist developing countries without undue damage to our own economy. It becomes a matter of some complexity, as is quite obvious from the history of these multi-fibre arrangements. It becomes a matter of difficulty, but it is a problem that we in developed countries must face. We are very lucky to have this report. I look forward to an interesting debate here in the House and to contributions both from those who were members of the Joint Committee discussing the problem and from other Senators.

Minister of State at the Department of Industry, Trade, Commerce and Tourism (Mr. M. Moynihan)

: I welcome the report of the Joint Committee on the Secondary Legislation of the European Communities on the Multi-Fibre Arrangement — MFA. The committee have examined the current MFA III and stressed the importance of the renewal of the MFA, having regard to trade and other developments affecting textiles and clothing in Ireland and elsewhere. This debate on their report is timely in view of ongoing discussions, under GATT auspices, on the future of the MFA.

The MFA is a multilateral international agreement which provides a framework for regulating international trade in textiles and clothing. It is a derogation from the normal GATT rules in that it allows the selective application of restrictions on imports of textiles and clothing. The MFA took on its basic shape in 1974 but derives its origins from national import control measures against cotton textiles from low cost countries in the 1950s. The MFA was initially agreed for a four-year period commencing in 1974 and has twice been extended; the last extension — MFA III — is due to expire on 31 July 1986. At present there are about 50 countries party to the MFA, including the EC Member States. Most major industrialised countries and low cost developing countries are signatories to the MFA.

As pointed out in the joint committee's report, the basic objective of the MFA is to "achieve the expansion of trade, the reduction of barriers to such trade and the progressive liberalisation of world trade in textile products, while at the same time ensuring the orderly and equitable development of this trade and avoidance of disruptive effects in individual markets". The MFA provides a framework for the gradual attainment of this objective.

It must be acknowledged that the MFA, a trade policy measure, has made a valuable contribution towards the strengthening of the Community's textile and clothing industries through creating a favourable climate for restructuring and investment. However, as Senators are aware, this restructuring has been a painful process for both the Irish and Community textile and clothing industries. Job losses in the last 10 years have been of the order of 14,000 in the case of Ireland and 1.3 million for the Community as a whole. It would, of course, be unrealistic and misleading to suggest that all or even the bulk of these job losses were due to increased imports of textiles and clothing from low cost countries. Other factors such as technical progress and consequential improved productivity have also contributed significantly to such reductions.

I would like to take this opportunity to congratulate the Irish textiles and clothing industries on the efforts they have made to restructure and to improve competitiveness. Indeed, overall trading performance by this sector over the past two years has been encouraging and employment has stabilised. Irish clothing manufacturers have had notable success in the development of exports and in the identification and exploitation of niches in the market at home and abroad. Manufacturers are finding that future prospects of the industry look particularly encouraging for the production of speciality upmarket quality fashion garments that can compete both on home and export markets. However, considerably greater investment of resources in the Irish clothing industry, financial and personnel, is required to improve productivity and marketing; a key factor here of course is the generation of adequate profits for this purpose. Such investment is necessary if this industry is to withstand ever-increasing competitive pressures from both developed and developing countries. The Irish textile industry is modern by European standards but its position must be maintained by continued technological and export market investment and the greater promotion of specialised textile enterprises.

The Government are deeply conscious of the anxiety of the Irish textile and clothing industry about the future of the MFA and the likely serious impact of an immediate or early return to GATT rules. We recognise the importance of this sector, which employs approximately one in seven of the jobs in manufacturing industry and its continuing important role in the economy, particularly in the provision of jobs throughout the country, production and overseas earnings. While considerable progress has been made in restructuring and modernising the sector, both at Irish and European level, in order to meet the more intense international competitive environment, significant structural adjustment is still necessary to ensure the long term prosperity and competitiveness of these long-established industries in Ireland. Accordingly, we fully accept the necessity to renew the MFA in order to facilitate continuance of the restructuring process to achieve greater competitiveness in the marketplace. Bearing this in mind, I can assure the House, that our objective in the GATT discussions on MFA renewal is to accommodate a liberal approach in so far as it is consistent with the retention of needed protection.

In saying this, I do not underestimate the problems to be faced and overcome in securing a new arrangement and I expect the GATT negotiations to be difficult and complex. It is the developed countries who are seeking the renewal of the MFA and the developing countries appear to be preparing to take a stronger stance than heretofore. They have clearly indicated that they favour a return to normal GATT rules and have reaffirmed their strong commitment to the objective of full application of the GATT rules and principles of the multilateral trading system to the textiles and clothing sector. It will, therefore, be necessary for the developed countries to offer some flexibility in order to obtain the agreement of the developing countries to any new Arrangement.

Obviously, it is not possible at this stage to comment on the content or duration of any such new Arrangement. It will be influenced by several factors, not least of which will be the stance taken by other developed countries, particularly the USA, where protectionist voices have been gathering momentum. As was noted in the joint committee's report, account will also need to be taken of the fact that a new GATT round of multilateral trade talks to liberalise trade, preparatory work for which is currently under way, may well have implications for the long term future of the MFA.

The initial discussions on whether the MFA should be extended, modified or discontinued commenced in late July 1985 under the aegis of the GATT Textile Committee, and are continuing. The EEC Commission, who negotiate on behalf of the Community, made a declaration at the July meeting supporting the renewal of the MFA with more flexibility in its application. The declaration, which was a broad outline of Community policy on the future textile trade regime, had been agreed by the EC Council of Ministers and struck a reasonable balance between the interests of member states. It recognised that it is necessary for the process of structural adjustment at industry level to continue but that some assurance by way of maintaining a multilateral framework such as the MFA is required which will also allow trade flows to develop in an orderly manner. We are satisfied that the declaration takes adequate account of Irish interests.

The EC Commission are currently in the process of finalising a detailed negotiating mandate for the GATT MFA negotiations for submission to the Council of Ministers; the latter have the ultimate responsibility for approving the content of the negotiating mandate. In drawing up this mandate, the Commission will have taken into account the varying views of the different interests within the Community and, to this end, I understand, they have had discussions with a wide range of interested parties.

In conclusion, I thank the joint committee for their very useful report on the MFA. I wish to assure the House that the committee's views are being taken fully into account in our efforts to have an effective MFA negotiated under GATT auspices as a successor to the current MFA III.

Mr. Lanigan

I welcome this report. I suppose we should not really be welcoming the report at all because in a reasonable market place there should not be any such thing as a multifibre arrangement. Because of developments in the textile industry over the past number of years there is a need for some sort of protection from dumping or from world-wide exportation from what were considered to be low-cost producing countries. The multi-fibre arrangement in a sense has helped a lot of the countries of the richer world. It has helped them to stave off, in the beginning, the competitiveness of the Third World countries.

In the last number of years market conditions have changed to a degree where what was low-cost in terms of manufacture is not the be-all and end-all of trade. The transportation costs of goods from Third World countries is now of such significance that in actual fact transportation costs in many cases have overtaken the actual manufacturing costs. Transportation now is as much an element in the cost of selling goods as the actual manufacturing cost.

The joint committee looked at the development of the textile industry throughout the world and has seen that there is a need still for this Multi-Fibre Arrangement. Ireland, as a producer of textiles, still needs a certain protection from the importation of low-cost goods from Third World countries. One only has to go into any major store in Ireland to see how great the imports are from these Third World countries. It is very hard to find an Irish label in many stores in this country. Having said that, Irish exporters are doing extremely well in the textile industry at present because of the fact that many of our textile industries are very modern in their manufacturing methods. Therefore, even though it could be said that our wage rate are higher than those in some of the developing countries, nevertheless our technology is very up-to-date. Because of this very up-to-date technology we are able to compete abroad on a reasonable basis in a number of countries.

It is interesting to see that in the last 12 months we have had a historic change. We have seen a company based in Hong Kong setting up a manufacturing entity in Ireland. One of the reasons for this is, of course, that low-cost labour is no longer the element that it was in the manufacture of textiles. High technology is taking over from low-cost in terms of labour. I sincerely hope that other manufacturers in the textile area will realise that, because of our emphasis on technology and on our support for technological advancement through the IDA and Government grants, Ireland is a place in which the textile industry can be located.

There is a large number of people employed in the textile industry in Ireland. It is claimed by the Apparel Industry Federation that one in seven jobs in manufacturing industry in Ireland is in the apparel industry. This shows the importance of that industry to this country. The Multi-Fibre Arrangement will to a degree help us to sustain employment in this industry. Of course, the only way that we can sustain employment is to keep up-to-date in technology. Too many of our textiles industries have gone to the wall. They were not capable of competing because they were labour-intensive and out-of-date in terms of technology.

It is stated that all the Third World countries say they want to scrap the MFA, but some of the most effective, including Hong Kong, South Korea and the other big exporters, are wavering because they fear what the United States will do in terms of its protectionist policies. They fear, if the United States becomes more and more protective on their own industry, that they will run amock in terms of exports and swamp the Third World countries because of the output potential there is in the United States.

The Minister mentioned that we in Ireland can produce goods of a very high quality. Because of this we have an ever-increasing role to play in the textile industry. I do not think we should fear too much for this industry. It is becoming stronger because of the fact that we are becoming more technologically advanced and because in many cases we are very much in advance of other countries. In Kilkenny we have two factories at present. One is spinning for a European parent company and is doing a fantastic job. We have seen again another industry set up in Kilkenny which is producing the outer fibre for tennis balls. When one looks at the textile industry one would not really consider tennis balls as being in that industry. Nevertheless, Ireland is probably the largest producer and exporter of tennis balls in the world at present. It is a moot point as to whether the United States or Ireland is the biggest exporter, but it would appear that Ireland will very soon be, even if it is not now, the biggest exporter. The outer fibre of a tennis ball is a textile which is being produced in Kilkenny to a very high standard. It is just an indication as to what can be done with proper technology in the textile industry.

The joint committee have acknowledged the place that the clothing and textile industries play in the EC and in particular in the Irish economy. They are also aware that pressures are building up in certain countries within the EC to do away with agreements such as the MFA and to suggest that trade should be opened up to all and sundry. Indeed, even in Britian, which is a very protectionist state, the Silberson report suggests that trade should be more open than it is at present. This is unusual in a country which has lost so many jobs with high technology and with the closure of so many mills throughout the Midlands and the North of England.

The joint committee accept that the clothing and textile industries represent a special case in world trade and would face a serious threat from general liberalisation. Nevertheless, they feel that it would be less than realistic not to countenance the fact that some liberalisation might be difficult to resist — and, of course, a renewal of the MFA would also require the approval of the developing countries which have been pressing for a return to normal GATT conditions. If we return to normal GATT conditions, which is the ideal in world trade, there would be industries in this country and in Europe which would come under major pressures. These pressures may be overcome to a large degree because of the cost of transportation. Like a lot of other things, it just proves the fact that one should place one's manufacturing industry as close as possible to its marketplace. This is why, of course, the Third World countries, unless they are able to develop their own internal trade and to get their own economies up to the point where they are able to purchase what is being manufactured in their own areas, would look on this as the raison d'etre for having these industries placed in Third World countries.

I am not too sure why it is, but most countries when they are starting to industrialise go for textiles rather than any other product. I wonder about this. It may be an easy business to get into, or maybe they see it as an extension of a local or a traditional manufacturing entity. The development of the cottage industry into an international industry may seem to be a logical progression. Nevertheless, when one considers the difficulties in international trade one wonders why this has been so.

The joint committee welcome the assurance of the Minister that the Government are in favour of a new MFA and that all steps necessary to protect Ireland's clothing and textile industry within the confines of the MFA will be taken. Without the MFA this country would face a difficult situation in the market place; but, I would suggest, a decreasingly difficult situation because of transportation costs. We do not underestimate the difficulties associated with putting another agreement in place along the lines of MFA III because of the changing attitude of the United States towards international trade and the hints of a protectionist policy coming in. Hopefully, this protectionist policy which is being proposed in the United States will continue to be fought at Congress and at Senatorial level against the wishes of the President. This country needs MFA III. We need certain protections for our industry against dumping.

We welcome the fact that textile firms in Ireland are becoming increasingly more efficient and that they are becoming increasingly more market orientated. I have no doubt but that in the future Ireland's place as a major exporter of textile orientated products will increase. This country because of its geographical location does not have a facility for outward processing which other member states have. Other member states also stand to benefit from the export of capital equipment to MFA countries and, accordingly, stand to gain from liberalisation. The joint committee hope that these arguments will be borne in mind in the course of the negotiation that takes place between now and the end of 1986 on this very important agreement or arrangement which has world-wide implications in its application. If it were not in force it could create extreme problems for countries such as ours which have a developing interest in the exportation of textiles and clothing.

Mr. Ferris

I will make a very brief contribution because there are members of the committee which brought this report to our attention who want to make a contribution. They are the experts really in this subject. Because the subject itself is of importance to all, particularly those of us in the Labour Party, and because of the employment significance of it, I want to put a few remarks on the record. First of all, the MFA is not generally known to the vast majority of people in Ireland. It has not been the subject of major discussion, such as the CAP has been, but it is obvious that it is of considerable significance to this country. The MFA has about 50 other adherents, including the ten member states of the EC and no doubt it will include the two additional new member states, Spain and Portugal.

Recently we noted that the People's Republic of China had entered into the arrangement. The textile industry is very important for this country. Therefore, any arrangement such as this, which will offer some form of protection to us, is vital. I would like to join with the Minister of State, Deputy Michael Moynihan, in his compliment to the members of the committee for having discussed this important MFA document and having reported on it, so giving us in the House an opportunity of being able to put on the record our views on the arrangement. The basic objective of the arrangement is quite an honourable one — to achieve the expansion of trade, the reduction of barriers to such trade and the progressive liberalisation of world trade in textile products while at the same time ensuring the orderly and equitable development of this trade and the avoidance of destructive effects in individual markets.

If we take the latter one first, obviously that is an area in which the textile industry in Ireland has suffered because of our possible antiquated textile processing industry. We were not able to compete with low cost countries. I admit that most of the problems created in low cost countries are created by the low cost of the labour — slave labour in some countries — which produced clothing and textiles. Without some sort of an arrangement like the MFA, it is obvious that widespread dumping throughout the world could go on and that could have tremendous effects on the people we employ in this industry.

I am glad to note from the Minister's contribution that the industry in Ireland has modernised and developed itself to the extent that it is now possibly one of the most modern by European standards within the Community. That is a major step forward. But it has been achieved at a cost. Anytime there is an improvement in processing and improved technology it only comes about at the expense of employee. Unfortunately, as the Minister has said the job losses in this area over the past ten years have been extremely considerable. They were probably brought about by a continuation of measures under the MFA and also by the process of rationalisation. The Minister mentioned that something like 14,000 jobs had been lost in the industry in the past ten years. If that is true, then obviously this sector of the Irish industry has suffered a major body blow in terms of employment. The Community as a whole has lost almost 1.5 million people in the same industry.

This is something we have to be extremely careful about, because you could technologically develop any country to the stage where everything works on a micro-chip and everybody sits around doing nothing. It is debatable whether in fact technology can be brought to its ultimate conclusion by the total exclusion of people in employment. people are happier when they are working.

Senator Lanigan referred to the fact that one in seven people in manufacturing in Ireland is involved in the textile industry. We must look upon it as a very significant industry. There is at present some 17,000 people employed full time in the industry, which is a major drop on what it was 12 years ago. If you distinguish between the clothing industry and the textile industry, the clothing industry has dropped something like 10,000 while the textile industry itself has dropped about 2,000 to 3,000 in the ten years. All of us must consider this very seriously when we are discussing any future arrangement. It is obvious from what has been said that it is vital for the survival of the existing industry that a future MFA will be negotiated successfully. We commend the Minister on what he is trying to do in that area and also the Minister in the Department, Deputy Bruton, who will also have responsibility. Both he and Deputy Moynihan will have the responsibility at their respective levels in the Community and through GATT. It is important that agreement be reached on this and we all realise the major contribution we can make to employment and to the economy in the development of this very significant industry. It is an industry which operates throughout the country and we have had a tremendous record in this area.

We have Donegal tweeds, Blarney tweeds and all the other famous names throughout the country associated with cloth and textiles of the highest possible degree of perfection and style. There is no doubt that this is synonymous with this country in many of the fashion centres of the world. For the status of our country it is vital that the industry be protected as much as possible within this Multifibre Arrangement and within the Community. For that reason I commend the members of the committee for bringing forward the report to allow us to put on record our comments about its importance. I also commend the Minister for his efforts in ensuring that we get an MFA III in place so that with the signatures of the 50 or so countries to the Arrangement some order will be brought into this area that obviously cannot be allowed to depend on massive forces when massive forces are not starting from an equal level throughout the world, particularly in the area of labour, labour costs and the compensation to labour for working in an industry that is difficult at times to work in.

With the access that other countries, like China, have to raw material and the conditions under which their workers have to contribute, it is no wonder that they can actually produce the basic material so cheaply. Their production costs are a lot cheaper than ours because of the recompense of the workers in the industry. That is a very unfair disadvantage to us because we are a developing country. We are part of a developed Europe and we have to achieve the same standards and compete with them within the Community. It is a delicate area and one that we must be directly involved in. It is important to our economy and is a major employer and I commend everybody for their efforts in this regard.

Mr. Fallon

Understandably, as I am from the town of Athlone, I have a particular interest in this matter. When one talks about industry in Athlone one automatically talks about Gentex which had been with us for almost 50 years but regrettably is no longer there. Like many people from Athlone I had the pleasure of working during my school holidays in Gentex for four, five and six weeks at a time in the old cotton store. This is where the cotton arrived in huge bales and then moved on to the spinning shed, the weaving shed and then to the BDF which was the bleaching, dying and finishing sheds. Certainly many people spent happy days in Gentex and for Athlone it was the principal industry, employing from time to time as many as 800 to 1,000 people. Regrettably, it is no more.

When we talk of Gentex we come to the conclusion that somehow Athlone should be a textile or clothing town. It has remained so in some way but not to the same extent. We have at least two firms, Chipwear, employing a number of people in their Roscommon branch and Athlone Apparel Company employing 240 in the Athlone branch and 120 in their Athy branch. So the tradition continues in some way. The entire midlands area has at the moment a very fine record in the area of textiles and clothing. There are 1,000 to 1,200 people employed in the towns of Athlone, Tullamore, Longford, Ballymahon, Mullingar and Roscommon, so this report is important to the whole midland region. Indeed, it is important to the country as a whole.

In their submission to the joint committee the Apparel Industry Federation acknowledged the contribution of the MFAs to the expansion of trade since their introduction in 1974 but they state that they largely favoured the developing countries to the detriment of the clothing and textile industries in the EC. According to the federation, these industries have suffered massive job losses and employment has shrunk by over 1 million within the EC over the past decade or so. In this country at present there are 17,000 people employed full time in the clothing industry as against 27,000 in 1973. The textile industry has reduced from 14,000 in 1973 to 11,000 in 1984. This decline in employment can be largely explained by the massive increases in imports to the EC from low cost countries.

In this month's Irish Business Magazine there is a list of the closures of companies over the past five years, from 1980 to 1984 and the clothing and textile industries which have closed down confirms the report which has been referred to. The report in Irish Business Magazine states that there was a loss of 255 jobs in 1980 in the textile and clothing industries and 947 jobs in 1981. Included in that list I noticed Fieldcrest leading the list with 672 jobs. In 1982 that there was a loss of 110 jobs, in 1983, 1,260 jobs and in 1984, 950 jobs. These are facts which none of us can be happy about or proud of. We are particularly vulnerable to any liberalism in the trade of textiles and clothing because it has a small economy with a comparatively large part involved in that industry. Successive Governments threw in the towel. They have not prevented the textile and clothing industry from declining, putting their faith, as they did over the years, in high technology industries. Over the years people like the IDA were not encouraged to examine the clothing and textile firms because Governments put their faith in high tech industries. Indeed, as we all know, recent evidence has shown that these high tech industries that we have put our faith in are also subject to strong fluctuations and there is now a levelling off and, indeed, closures. We cannot forget the recent announcement regarding AMD in Greystones. Because the clothing and textile industries are labour-intensive and because high tech industries are levelling off or failing, it is all the more reason why we cannot afford to lose any further textile and clothing industries which are labour-intensive. There is a reference in this report to other countries. It states:

The Joint Committee is aware that pressures are building up among member states such as Denmark, Germany and the Netherlands for an extensive range of liberalisation in any new arrangement.

The report further states:

...the UK, which with Ireland, France, Italy and Greece has in the past adopted a restrictive attitude, will be pursuing a more liberal stance in renewal negotiations than heretofore, according to a recent announcement by the UK Minister for Trade, Mr. Channon.

Senator Lanigan referred to the Silberston Report in regard to which the joint committee stated:

This approach is influenced by the findings of the Silberston Report, which advocated a gradual phasing out of import restrictions under a new MFA.

I am not disagreeing with that report but I think that, perhaps, it would be no harm to make what I would consider a factual statement. These other EC countries are not concerned with neutralisation, as it does not affect them unduly. It is a well known fact that Denmark and the Netherlands have lost their textile industries and are, therefore, no longer concerned. Neither does Germany care because it obtains a considerable amount of textiles under outward processing which is West German clothes made up in East Germany and then imported, and they are only paying duty on the labour element of the transaction. It is well known that France enjoys some form of protection by bureaucracy and, although it is a party to most agreements, they prevent imports from damaging their own internal economy by these unusual extraordinary bureaucratic methods.

There is another aspect which I do not think is mentioned in the report. It was touched on by Senator Lanigan and it is very important in my opinion. I refer to the attitude of the USA at the moment who are supporting a strong trend towards protectionism. There are at present before the Senate several Bills of this nature. One of them is referred to as the Jackson Bill. The effect of this extra or greater protectionism would obviously be that Hong Kong and, indeed, most, if not all of the other low cost countries, would have to find alternative markets for their goods. If the EC is so liberalised, then it is a natural and inevitable target for these countries. Therefore, we would lose out in that situation.

Another point worth mentioning is the question of labels because the recent regulations concerning the removal of labels of origin from clothing will almost certainly make it easier for the low cost imports to move around the EC and to be imported into Ireland, again damaging our own local manufacturing industry.

While unemployment in Ireland is so high, I believe that all measures must be taken to protect this labour-intensive industry. Successive Governments have not seemed to care all that much about this industry. That being so, I would hope that they would adopt the attitude that now is surely the time to protect it further. We must and we should recognise the concern of the Apparel Industry Federation about the renewal of the MFA, and if we must support renewal of the MFA we must — and I underline must — at the same time take account of the protection of the needs of our own Irish industry. We must be mindful that we employ many people in the textile and clothing industry at the moment. In comparison with other years, it is quite low but, nonetheless, it is a very sizeable figure, that plus the fact that the market share of low cost countries is far greater in the textile and clothing industry. In any future negotiations we must ensure that our industry is totally and fully protected.

Mr. Hourigan

I welcome the report and in particular its content and the message that it conveys to this House and to the Minister and those who will be involved in the decision-taking in the final analysis. I happen to be a member of this committee and there is much concern about the future having regard to the Multi-Fibre Arrangement. The Joint Committee on EC Legislation had among its terms of reference such vital matters as examining in detail this Multi-Fibre Arrangement and coming forward with a positive and clear report which would include very definite recommendations. The report, I submit has, in fact, done that. It has come forward with very definite and positive recommendations for consideration.

In recent months the committee did receive submissions from a number of bodies and it had meetings with quite a number of organisations as well concerning the whole future with regard to policies and arrangements to do with the entire trade of multi-fibre materials. The report here this morning is, in fact, the culmination of in-depth discussions on the part of the committee in their own right and also their deliberations, discussions and consultations with a number of different organisations and bodies. It is a far-reaching report. It is comprehensive and it includes a good deal of extremely important material.

The joint committee received a written submission from the AIF and also had a very comprehensive discussion with the federation, that is the group of organisations that are involved in the whole future of textiles and clothing in this country. Likewise, the Department of Industry, Trade, Commerce and Tourism submitted their findings to the committee for the operation of a Multi-fibre Arrangement in the future. It is true to say that the AIF and the Department have contributed very significantly to helping the committee to come forward with the report which is placed before the House today. They are deserving of our praise and appreciation for that.

After we met as a committee with the Apparel Industries Federation, the committee were very pleased that the Minister for Industry, Trade, Commerce and Tourism, Deputy John Bruton, was available to meet the committee for a full discussion. That meeting, which was held on 3 July of this year, added greatly to the committee's views and thoughts and deliberations on the matter. We are extremely grateful to the Minister for coming to talk to us and I would ask the Minister of State, Mr. Moynihan, to convey to the Minister, Deputy Bruton, our appreciation of that fact, that he gave of his time and his absolute positive interest in the matter of discussion.

This is a multilateral Arrangement concerning trade in clothing and textiles. There are, as was indicated, approximately 50 adherents to the MFA. That includes, of course, the present ten member states of the EC. The objective of the Arrangement is to:

achieve the expansion of trade, the reduction of barriers to such trade and the progressive liberalisation of world trade in textile products, while at the same time ensuring the orderly and equitable development of this trade and avoidance of disruptive effects in individual markets.

The EC as a community places a great deal of importance on having proper controls on the pace of development in the textile and clothing industries to prevent serious disruption in the domestic trading situation which otherwise would develop. We must also acknowledge, of course, that there are bilateral Arrangements in existence within the MFA framework and these multi-lateral Arrangements are with approximately 25 countries which would be in the developing category or low cost producing grouping. That is where the clash of interests arises. On the one hand we have low cost producing countries and on the other we have the better-off countries and perhaps their interests do not coincide.

The origins of the MFA go away back to the fifties when the United States of America and the European countries first applied controls on products from low cost countries. That was the beginning of the Multi-Fibre Arrangements. In the earlier days these national measures were placed within the GATT framework in 1961 and MFA took its basic shape as we now know it in 1974. It embraces synthetic and natural products. In the first instance, the Arrangement was for a four-year period and this has been extended twice since its initiation. The present MFA III is due to expire in July 1986 and the big question is what replaces it after July 1986; in tandem with that, the bilateral Arrangements are due to expire at the end of 1986, and again the question is, what takes the place of these bilateral Arrangements with the various low cost producing countries. These are, in a nutshell, the sort of things to which we have to address ourselves and which should be a matter of much study. The MFA is something that many people do not regard as being important but it is extremely important. As was said by previous speakers, it affects the entire employment situation quite dramatically. That must be borne in mind.

The MFA is a textiles committee comprising all members of the MFA under the chairmanship of the GATT Director General. It was established to attend to and to deal with differences between the parties on interpretation of the arrangement and to monitor the overall operation of the Arrangement with the assistance of the textile surveillance body. That gives us an insight into the need for this MFA arrangement.

There is then in existence this textile surveillance body and that has a very important function. All quantitative restrictions on trade in clothing and in textiles generally must be notified to this surveillance body. No new restriction can be imposed unless market disruption, as defined in the MFA, or a serious danger of market disruption, as defined in the MFA, or a serious danger of market disruption is in existence or likely to exist. Again in relation to MFA and its relevance, bilateral Arrangements on mutually acceptable terms are permissible but subject to review by the textile surveillance body.

The United States of America, Japan and the EC on the one hand and the developing countries on the other, as I referred to moments ago, are at cross purposes because of their particular and different interests in this whole question of the production of multi-fibre materials. We must bear in mind that there has to be a certain amount of compromise, a certain amount of give and take if we are to make progress. The AIF, the central agency concerned with the Multi-Fibre Arrangement, acknowledges the contribution of the various participants involved in the trade and recognises the differences of opinion which have existed over a number of years and are likely to represent themselves again. A return to the GATT rules, as has existed in the past, would not be a good thing for the future of the MFA. We want an MFA to replace MFA III but which will be on a different basis.

Much of what is contained in the report is relevant. Reference was made earlier to the employment aspect of the MFA. At present, between the clothing and textile industries, we are talking of an employment figure of approximately 25,000. This is a very significant number of people. It represents approximately one job out of seven in the manufacturing sector. An MFA framework aims to facilitate industrial restructuring and to improve its competitiveness. If it did not aspire to do that it would not have great meaning.

There are very definite dangers with regard to international trade co-operation generally. The absence of an MFA arrangement to ensure orderly and equitable expansion of trade between the developed and the developing countries would lead to a bad situation. The Department of Industry, Trade, Commerce and Tourism hold the view that it is now clear that all EC member states favour renewal of the MFA, but there will be divergence of opinion with regard to how the MFA renewal will be debated and argued. That will include, in the first instance, the whole matter of liberalisation and, of course, it will also include, as the Department of Industry, Trade, Commerce and Tourism have indicated, the question of the pace and the extent of development generally.

The committee have put forward in the report their views in a very concise, and comprehensive manner. They have laid emphasis on the importance of an MFA at this time. They have acknowledged the extremely significant role of the clothing and textile industries for our economy. They are concerned that nothing should be done that would disrupt the contribution of these industries to the development of the Irish economy. It is very understandable that the AIF, the federation of the organisation directly involved in these industries, would have apprehensions and concern that there should be a return to the old GATT arrangement, which would not be a desirable development. For that reason the committee very positively advocate a renewal of the MFA, emphasising at the same time that it is important to keep matters in clear and definite proportion and to have regard to trade and technological developments in the clothing and textile industries. It would be unwise for anybody to ignore the changes that are taking place in these industries.

Reference was made to the division of opinion within the EC. This could not be overstated. The joint committee are extremely aware that Denmark, Germany and Holland will be pressing very hard for a great measure of liberalisation. It is for the reason stated by Senator Fallon — that the textile industry is not of much relevance in those countries. A more disturbing feature is that the United Kingdom, who in the past in common with Ireland France, Italy and Greece were in favour of fairly restrictive measures, now are tending to go along the line with Germany, Denmark and Holland. This is something we should bear in mind. Reference was made by Senator Fallon to some of the reasoning behind that which explains why the United Kingdom seem to be going along that path.

The committee accept that the clothing and textile industries represent a very special case in world trade and indeed acknowledge that the industries face a very serious threat if liberalisation were introduced on any kind of an extensive or massive scale. The committee believe that they would be failing in their duty if they did not at the same time recognise that there is a two-dimensional situation here. We have developing countries who want liberalisation — and for very good reasons from their point of view. Therefore, the committee believe that we must face up to the reality of the measure of liberalisation which will be necessary, but at the same time avoiding an arrangement that would bring us within the scope of the rules of GATT.

Our committee, in the interest of economy generally, would urge that there be an extension of trade and would express the view that there must be a successful new GATT round which would take account of bilateral arrangements but would not embody this MFA we are talking about. The committee make that point in the recognition that co-operation from the developing countries is necessary. We must face that very important fact. When the Minister, Deputy Bruton, came to talk to us last July and participated very fully in the deliberations of the committee, he went into the complexities of forging a new agreement which included a number of these bilateral arrangements between EC members and the various other low cost countries. For that reason he at that time visualised — and nobody could disagree with the point of view—that there would probably be long and protracted negotiations before we have an MFA established. We do have some months ahead before the expiration of the present agreement which runs out in July of 1986 and the bilateral arrangement which runs out at the end of the year 1986 itself.

As the Minister of State, Deputy Moynihan, indicated earlier, the EC Commission is of course extremely anxious that progress be made down the road of having a multi-fibre agreement established at the earliest possible time. This is something with which everybody will agree, recognising its importance not alone to us nationally but to the whole international scene, particularly to the low cost producing countries where standards of living are in most instances at a very low level. If one is to adopt a broad approach to the matter one has to acknowledge the position of these countries and to recognise that we cannot just aspire to an agreement or an arrangement that suits ourselves without any reference whatever to these other countries.

It is imperative that those involved in the negotiation of this agreement adopt a very strong line because we must have clearly in mind whether the next agreement will be the final one or whether it will be MFA IV to be followed by MFA V at some future date. We, therefore, as a committee would press very strongly on those in negotiation — the Department of Industry, Trade, Commerce and Tourism, the Minister and the Minister of State — to make certain that we have a renewed agreement in the first instance and that we minimise the degree of liberalism to the lowest point possible. This country because of its geographical location — and it applies in this context just as it does in many other contexts — needs an agreement that will not do it down or will not erode and do serious damage to our textile and clothing industries. This is extremely important. For that reason it is incumbent on everybody involved in negotiations to make sure that (1) there is a replacement for MFA III; (2) that we have only the amount of liberalisation that is required; and (3) that there will be no question of any arrangement within the framework of the GATT rules as existed in the past.

Mr. Fitzsimons

The single point I want to make is contrary to the conclusion of the committee that we cannot afford any further liberalisation. This is a very important industry. That is demonstrated by the fact that the committee invited the Minister to attend one of its meetings, and it underlines the Minister's concern that he did attend the full meeting. Therefore, we accept that it is a very important industry. In an effort to get some detailed statistics about the industry I consulted the Report and Recommendations on the Technological Capacity of Indigenous Irish Industry, SDC Report 8, which was published in June of this year. In the section on textiles and clothing it states on page 98:

The data used in characterising this sector is based on CSO figures; thus man-made fibres are included in Chemicals and Pharmaceuticals.

I turned to "Chemicals and Pharmaceuticals" on page 58 and it states that the details regarding man-made fibres are included in this chapter.

I was disappointed that man-made fibres do not seem to have a separate heading. The headings include: adhesives and sealants; cosmetics and toiletries; fertilisers; inorganic chemicals; the organic sub-sector. The paints and inks sub-sector; soaps and detergents; and pharmaceuticals. I hope I am not being over-critical and I am not underestimating the importance of this report, but I was rather disappointed that such an important industry was not singled out under a separate heading. I believe it should be. However, some details are included in the report and the Apparel Industry Federation made a written submission to the committee and also a deputation was received from the federation. The details, which were included in the report of the submission by the federation, put the situation into clear focus for us.

In their submission to the joint committee the federation acknowledge the contribution of the Multi-Fibre Arrangements to the expansion of trade since their introduction in 1974 but state that they largely favour the developing countries to the detriment of the clothing and textile industries in the EC. Within the past decade or so, according to the federation, these industries have suffered massive job losses and employment has shrunk by over one million within the EC. Details are included. At present, in this country, there are some 17,000 people employed full time in the clothing industry as against 27,000 in 1973, a drop of 37 per cent. The textile industry has declined from about 14,000 in 1973 to 11,000 in 1974, a fall of 21 per cent. This decline in employment, the federation contends, can be largely explained by the massive increase in imports to the EC from low cost countries, from some of those countries which, as Senator Ferris has said, employ slave labour.

The views of the committee have been referred to in some detail and I will not go over ground that has been covered already. Clearly, the joint committee accepts that some liberalisation may be difficult to resist. That is clearly stated in the report. The Minister outlined the complexities of forging a new Arrangement and he stressed that he expected negotiations leading up to a new agreement to be long and complex. Therefore, I presume, it will be very difficult to arrive at a satisfactory Arrangement from this country's point of view. The Minister assured the committee that the Government are in favour of a new Multi-fibre Arrangement and that all steps necessary to protect Ireland's clothing and textile interests within the confines of the MFA, will be taken.

The committee's views are most important. They state that the objective in negotiation should be, in their view, to accommodate any approach to liberalisation only in so far as it is consistent with the retention of needed protection. I am glad of the Minister's assurance in his introductory speech that the committee's views are being fully taken into account in the Government's efforts to have an effective MFA negotiated. I would ask the Minister to keep this in mind — that liberalisation would be entertained only so far as it is consistent with the retention of needed protection. Specifically, in the context of liberalisation, with regard to the renewal of the multi-fibre association, the joint committee report urges that our negotiators take a strong line in favour of renewal and bear in mind that the benefits of liberalisation which would accrue to other member states would be very unlikely to apply to Ireland. This country, mainly because of its geographical location, does not have a facility for outward processing which other member states have. Other member states also stand to benefit from the export of capital equipment to Multi-fibre Arrangement countries and accordingly stand to gain from liberalisation. The joint committee hopes that these arguments will be borne in mind in the course of negotiations.

Clearly, this is a very important industry for Ireland, with major problems. As Senator Fallon has pointed out, it is clear that we cannot afford any further liberalisation. In any negotiations that take place I would urge the Minister to keep in mind the views of the committee regarding liberalisation and the effect it would have on the industry here. Again, in conclusion, my view is that having regard to the figures I quoted, having regard to the state of the industry and extrapolating into the future, clearly, we cannot afford any further liberalisation.

Mr. Daly

I welcome this motion. I would like to commend the committee on a comprehensive report. The Minister, at the outset, spoke about the number of people employed and the number of people who have lost employment and that was taken up by other Senators too. Of course, while imports are responsible for a certain amount of unemployment they are not responsible for all of it because modern technology is responsible for the cutting down of jobs in every industry. That is something that we have to face up to and provide for.

I think that this Multi-fibre Arrangement is a very important thing for our people and our industries. There are very good industries. Senator Fallon spoke about the labour-intensive industries and he was worried that successive Governments have not done enough for them. I think successive Governments have all played their part and the IDA have played their part. There is a very successful clothing factory in Senator Fallon's constituency, Manford Clothing. In Kerry, and in Killarney in particular, we have Killarney Hosiery which is something the Minister of State, Deputy Moynihan, knows more about than I do.

These are a few points I would like to make to show that our industrial situation is not as gloomy as some people believe. Killarney Hosiery, which is a subsidiary of Pretty Polly, exports its entire production. It has a turnover of £14½ million. There are 500 people employed in Killarney Hosiery. The wages paid by them are £4½ million to £5 million per year. They have had 17 years successful trading in Killarney so far. Their product which is made by Killarney labour has 50 per cent of the segment of the market in the United Kingdom. You can imagine how an industry like that in a town like Killarney, with 500 people employed and £4½ million in wages floating around, benefits the community and how important it is to the community.

We are worried about imports and we are entitled to be worried about them but we must be fair. If we can export 100 per cent of our products then it is only natural that some other countries are going to export to us. If we could export everything and import nothing it would be a situation, as somebody said recently, like being wired up to the moon. That is something that does not happen. We also have Burlington Industries in Kerry. There is a lovely situation in Killarney in particular, where we have Killarney Hosiery employing about 400 female staff and another factory Liebherrs, the crane factory, employing 300 male workers. We have a good balance and a good mix there. Our picture is a lot better than some people would think. The Minister has gone with different trade delegations to different countries and recently a very big order has come in from Iraq for Irish textiles. I do not wish to take up more time. Most of the things I would like to say have already been said. There is nothing so boring to the people in this House as having to listen to repetition. I will not be guilty of that on this occasion.

Mr. McDonald

I wish to say a few words on this motion because I recognise the importance that all these agreements have for the industry here and to the national economy in general. I have absolute and complete confidence in the Minister and his officials who have over the years negotiated on behalf of this country, not only in the Multi-Fibre Agreements I and II but also the people who take up positions for us in the overall GATT negotiations. I think we are inclined to lose track of the importance that success in these negotiations represents for the ordinary man in the street. The joint committee in the report and in their examination of the MFA went into great depth and had oral hearings and indeed written submissions from all the interested groups involved. It is very clear where the national interest lies. I hope that every effort will be made by the Minister and his officials to bear in mind the views so very clearly expressed by our industry here. We are inclined to lose sight of the high quality, the high turnout and the high finish of the Irish clothing industry and our textile products. Unfortunately, over the last decade or so we have lost a lot of our industry because in the developing countries the textile industry is classified as very light industry and it certainly lends itself to development in the developing and low cost countries. I believe that we have to recognise that there will be a loss and a difficulty with so many traditional Irish industries in trying to compete with imports, especially from third countries — indeed many cases one would suspect that there would be an element of dumping. Therefore, it is important that these agreements should be closely monitored and that there should be a very definite input from our side on behalf of our various industries whether large or small.

Our overall imbalance of trade with the countries in the main involved with the MFA amounted, according to the Department, to £417.2 million compared with our exports to those same countries of something like £289 million. If we talk about the commodities which we are discussing this morning — and that is textiles and the clothing industry — our imports from Poland, Czechoslovakia, Hungary, Romania, The Philippines, the People's Republic of China, South Korea, Taiwan, Hong Kong, Sri Lanka, Thailand, Indonesia, Malaysia, Singapore, Egypt, Brazil, Pakistan, India, Bangladesh and Macao — which I never heard of before — amount to £59 million compared with exports to those countries of £2.7 million.

Mr. O'Leary

To what countries?

Mr. McDonald

To those same countries. That puts the thought in my head that practically all of those countries apart from those in Eastern Europe, are underdeveloped and developing countries. As for those in the sun, I do not know how their balance of payments or how their budgets work. The majority would be single party states. Therefore, their Governments would be controlling their import and export expenditure very closely. We have lost over the last number of years a large number of small, family firm industries right across the country by virtue of the fact that technology has caught up with them and they were producing commodities that technology has made absolutely obsolete in our situation. I must instance the Pierce plough, which was produced by a firm that reigned gloriously in Wexford for many years. I have not been in the Far East very much, but the system of cultivation in Africa, with the old wooden plough and the oxen, is a case where I think a light Pierce plough would do a much more efficient and even a marvellous job, because the wooden ploughs they have there went out here 90 years ago with the old Howard plough — perhaps even 100 years ago.

I am not suggesting that we should start up a trade in ploughs but there must be many producers of commodities that in this age of chip technology would be looked at as completely obsolete but which would have a very significant and economic role to play in many of those developing countries in the Third World. There is not much point in putting in tractors and machinery for cultivation when we are talking about these countries. There is no point in putting in something for which you have to import oil to run. Therefore, we should assist the people who are purchasing the textiles and the fibres from those countries, those who go out to buy the commodities. I think that CTT should assist them, even if they are only agents, to have with them a number of items that they would be able to sell. The trade imbalance there is ridiculous. We are talking about, even for multi-fibres alone, a ratio of £59 million to £2 million. I believe that CTT assist firms to display their goods in other countries abroad but they have a great reluctance to do the same thing for the ordinary agent, the person who is representing one, two or three smaller firms. If we are to look for economic expansion and the expansion of jobs in our country we must look to the family business again. The multinational companies are not worth a curse to the economy of this country because, even from a tax point of view, they are on a tax free holiday. What we should do is assist in a significant way the family business, the person who has an idea and makes a go of it, who develops a product that has a high standard but cannot afford to put a salesman on the road and send him either to eastern Europe or Africa because it would involve air tickets worth thousands of pounds. There should be a grant-in-aid for a representative who will carry a number of agencies representing a number of small firms not big enough to put representatives in the air or on the road — I do not know the appropriate way of describing it. I believe that we should endeavour to see in what way we can perhaps assist the development of those countries that I have mentioned with an improvement in their technology, which is still not up to the high standard that we all aspire to in this country. There is room in that. We can only highlight it if the CTT people will look further than the big firms that they like to be associated with and if they will respond positively to the small man who owns, who has developed, inherited or is working in a family firm employing from five to 50 people, and assist him to employ a person who will represent him even though the representative can have in his bag anything from Kerrygold to suits from Ballymahon. In that way we can improve the imbalance of trade that we have with those countries. All those countries are looking for a new recognition abroad. They are all in the world market. We have not taken full and complete advantage of the opportunities that we have been presented with over the last ten or 12 years. In this sector there are a number of semi-State organisations. CTT are doing a marvellous job but they are restricted to some extent. We should review the legislation to see if it is too confined in any way. We also have a semi-State company called Kilkenny Design, who are a very progressive company. They are also in the very same area. They do not deal exclusively with textiles, clothing and multi-fabrics. They are in that area and they are supported by the taxpayer.

CTT will deal with trade fairs, exhibitions and stands. They do a very good job. The beef people are doing the very same thing but beef is a little bit away from multi-fibres. I do not want to earn the wrath of the Chair by straying. The point I want to make about Kilkenny Design is that it is all right to go to the fairs in Cologne or all over the world but I think we should avail of the legislation for Kilkenny Design to have them establish stores in selected cities across Europe. We need one in London, Paris and Cologne and we should have a display of top quality, Irish-manufactured goods and products on sale directly to the general public. It would be a sales outlet but, more important still, it would be introducing people to top quality brands of the widest range of Irish manufactured products and indeed agricultural products also. Those people could work more closely with CTT and ensure that the small man who is prepared to put in either handcraft or articles of a high quality would be given encouragement. Having regard to their turnover and their output, and the disproportionate costs of producing for a wider market, if it is an exclusive quality product they are marketing, they should have an opportunity of putting it on a wider market than on the small restricted Dublin market. We should be able to encourage in a very practical way manufacturers and producers from all over the country who would need that little extra help in order to get their produce before a wider range of customers.

The work that the joint committee have put into this makes the task quite clear. It gives a very clear mandate to the Minister's officials to dig in their heels and to negotiate a very definite renewal of the Multi-Fibre Arrangement. I wish them success in that task.

Mr. Harte

I agree with Senator Daly. There is no need for repetition because it appears to me that not only is it a good report and not only should it be welcomed but, having read the Minister's speech on the motion, I think he has his finger on the pulse of things. I am quite satisfied that he is heading in the right direction and that we need have no anxiety in this area of dealing with the new four-year period when it comes up.

Unfortunately the textile industry was one of the more vulnerable industries in Ireland — it became vulnerable earlier. It can be argued that it was not due to the Far Eastern countries with their low labour rates etc., and I can accept that. I accept that it was due to increasing technology. There were many factors involved. We did however have that problem of vulnerability. In any new agreement that is drawn up I have no doubt that the Minister will have that point in mind and have regard to what way the balances lie. It is easy enough to talk about getting trading arrangements with other countries, but you could get a trading arrangement with the USSR very easily if you took a case of vodka for every two garments. That is not the type of arrangement that would suit us. It is never easy to gauge the true position. When you see that you have only a certain amount of trade with a country and you are trying to increase that trade it seems discouraging but it does not always work like that.

The Irish textile industries have been very vulnerable and have been attacked in the early stages of what we would call the modern technology revolution. It is great to see that they have risen above it now and are beginning to develop along the right lines.

The Chair seems to be having a little problem over time. Is there any problem with time?

An Leas-Chathaoirleach

The Senator may continue.

Mr. Harte

The future prospects of the industry are very hopeful. The Minister has referred to that. The success it has had in the development of exports must be acknowledged. So many people who have looked at the textile industry over the years have regarded it as one of those things that could not get off the ground and was definitely going to go to the wall. The shoe and leather industry had a similar problem but we are not dealing with that now.

Naturally, any agreement that comes up, because of our location, not having land markets adjacent to us, will pose problems for us. I have no doubt that there will be no difficulty in getting our whack out of it. Since the industry has shown initiative and courage and has risen above the obstacles in its way, I am satisfied that we will come well out of this. I would have the fullest confidence in both the Minister and his advisers to see that Ireland is properly looked after in this respect. It is an absolute necessity to deal with the question of renewing the agreement. I was more interested in standing up to say that I realise the problems the textile industry has had. I know these problems are being overcome and I appreciate the fact that the Minister and his advisers are aware of this and that they will take the industry down the right road that will help them to continue this progress that has been made and give them an opportunity, in that process, of expanding beyond their present situation.

Mr. O'Leary

I got a signal from the Leader of the House that he does not want me to take more than 30 minutes. I hope to facilitate him in that regard.

An Leas-Chathaoirleach

That is for next week, Senator.

Mr. O'Leary

I would like, first of all, to support the committee in their recommendation and the Department in their determination to ensure that the method of development of trade in this area would be along the lines of negotiating MFA IV rather than opening up and liberalising the trade with Third World countries covered by the MFA III, as that would not be in the long term interests of the industry, which is a very important employer in the country and which has a very significant part to play both in servicing local markets and exporting its products throughout the world. The first significant work which I did as an accountant was in the area of textiles and I have always had a particular interest in it as a result of that.

The report of the committee highlights the importance of the negotiation for a new agreement on the one hand, but it also emphasises that within the European Community there are different priorities and we could be caught in the middle as a result of the changing priorities of some of our partners within the Community. Of particular significance in that regard is the desire by some of the European Community countries to liberalise in total the trade in textiles and clothing and as a quid pro quo to be able to provide a substantial quantity of textile machinery. This is of particular significance both in the British case and in the German case. The interests of those countries, with their now relatively small textile industries and their important engineering interests, are not the same as ours.

We should recognise that within this area of textiles and clothing Ireland in fact continues to export more than it imports. The latest figures we have for 1984 show that under that category, which is generally category 65 in the Trade Statistics, Ireland exports totalled a sum of £252 million and imported £230 million. This compares very favourably to the position in 1974 which was at the very start of the MFA I agreement. I do not have the 1973 statistics. In fact, the position has moved slightly in Ireland's favour. It is because of the specialisation of Ireland in, for example, the Pretty Polly factory in Killarney, referred to by Senator Daly, and a number of other very large textile producing facilities dispersed throughout the country that has changed the deficiency in our external trade in this category to a surplus over ten years.

Would the Minister explain the information which was given to the committee concerning the imports and exports of clothing and textiles from the countries covered by the MFA agreement? I am referring to the information contained in page 17 of the committee's report where it states that clothing and textile imports from the areas in question represented £59 million — presumably in 1984 even though it is not made quite clear — and the exports during the same year were £2.7 million. However, this may hide another significant factor: that textiles, and clothing in particular, are being imported into the European Community in one country and are being transferred from that country to Ireland, either as a result of additional processing or indeed just as a result of a distribution network.

To get the real imports figure and the real imbalance which arises in respect of the countries covered by the MFA agreement one must add to this imbalance of £56.3 million an additional imbalance representing the amount of imports into the Community which ultimately find their way onto the shelves of Irish shops. If we look at the pattern of trade over the past years, our trade with the United Kingdom in particular seems to suggest that this is happening on quite a significant scale. The interest of this country in that should be brought very clearly to the attention of the European Community. In particular when we are dealing with quotas having the internal market considered as being one is very often a disadvantage for a country where its own domestic market is small, because imports into another country diverted to this country can have a significant impact on our domestic producers.

Finally, it is true that in many of the clothing areas our capacity to compete has been reduced. It has been reduced not only because of high wages in this country but also because it has been influenced to a significant extent by the existence of a vast range of additional costs associated with labour — social welfare, social costs and other costs of that nature, safety legislation, legislation restricting the hours of work of individuals. I am not suggesting that these are wrong, but we must recognise that the people with whom we are competing at the other side of the world very often employ people below our minimum age for working and indeed below the minimum age even of their own country. Very often they work long hours and work in conditions which would not be acceptable in this country. That is another reason why the European Community must be careful to ensure that the liberalisation of trade does not provide a vehicle for the increased exploitation of workers in low cost countries by forcing them to work unreasonable hours or by forcing them to work too early in their life. These are additional considerations which our negotiators should take into account. I would be very anxious to hear the Minister's reply to the point I have raised and also to the other points which have been raised.

The tone of the committee's report, recognising the importance of this area for employment, and obviously the tone of the Department's response to the committee, which was considerably in sympathy with what the committee were saying, together with the generally supportive discussion which has taken place in the Seanad today, all mean that the Government should feel strengthened in their determination to ensure that the MFA IV agreement would recognise the peculiar difficulties of a small country on the periphery of Europe in the matter of preserving an indigenous textile industry and in particular an indigenous clothing industry.

Professor Dooge

On a point of order, I take it that since specific questions have been asked of the Minister of State there is no objection to his intervening for a second time in order to deal with these questions.

Minister of State at the Department of Industry, Trade, Commerce and Tourism (Mr. M. Moynihan)

: The import quota for 1984 of £59 million includes a variety of origins. Imports are based on the country of origin and take account of imports coming into Ireland indirectly from other EC countries.

Question put and agreed to.