asked the Minister for External Affairs whether his attention has been drawn to Press reports that countries represented on the Organisation for European Economic Co-operation have agreed to withdraw import restrictions on at least 50 per cent. of their private trade; whether any such agreement has been entered into by the Irish Government; and, if so, whether he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Organisation For European Economic Co-operation and Import Restrictions.
I am indebted to the Deputy for asking this question, as there has been a considerable amount of misunderstanding concerning the purport and effect of the recent Organisation for European Economic Co-operation decision regarding quantitative restrictions. The Council of the Organisation for European Economic Co-operation decided on the 2nd November, 1949, that member countries should adopt as an objective the removal of quantitative restrictions before 15th December, 1949, at latest, on at least 50 per cent. of their total imports on private account from the other member countries as a group, in the respective fields of food and feeding-stuffs, raw materials and manufactured goods, counted separately. This decision was the result of studies carried out by the Organisation for European Economic Co-operation during the preceding five months with a view to freeing and developing trade between the participating countries.
As the Deputy knows, most European countries, immediately after the recent war, imposed very severe restrictions on the import of goods. These restrictions were, in practically all cases, alleged to be inspired by balance of payments and currency considerations. A position not infrequently developed wherein some commodities, which were in short supply in one country were kept out by quantitative restrictions for balance of payments or currency reasons, while the same commodities were in abundant supply in another country; as a result, economic rehabi was retarded in the country where the commodities were in short supply, while economic difficulties and unemployment resulted in countries where the commodities were in abundant supply.
It is important to bear in mind that these restrictions had nothing to do with tariffs, and were distinct, and in addition to quantitative restrictions existing pre-war for protective purposes. The Organisation for European Economic Co-operation came to the conclusion last June that there was little hope of further developing trade between the participating countries unless these restrictions were relaxed.
In arriving at this decision, the organisation had in mind that the soundness of the internal economy of every country depends to a greater or lesser degree on the possibilities open to such country of finding markets for its total production and so maintaining full employment. It had also in mind that imports by one participating country from another might replace imports from other sources, e.g., the dollar area, with which the balance of payments position is especially difficult. The fact, on the other hand, that the participating countries had concluded between themselves an agreement designed to avoid a loss of gold or dollars for any of them by reason of its trade with the others meant that the main cause of these restrictions was removed. Such an agreement, known as the Intra-European Payments and Compensations Agreement, was first made in October, 1948, in respect of the year July, 1948, to June, 1949, and the principles of a more satisfactory agreement of the same kind were approved last June. In those circumstances, the organisation came to the conclusion that each participating country enforcing quantitative restrictions for balance of payments or currency reasons should, as far as possible, relax them in favour of other participants.
I am sure the Deputy will agree that our experience of the system of quantitative restrictions enforced by various countries since the war suggests that the decision of the Organisation for European Economic Co-operation was a sound one. We in Ireland have had very considerable difficulties in recent years about securing admission for our exports to a number of European countries. I am referring here to obstacles placed by Governments to the import from this country of goods which businessmen and consumers in other countries needed and were prepared to purchase. I need not cite examples, although I am sure that the restrictions placed by the British Government on the import of books and publications from this country will immediately occur to the minds of the Deputy and of other members of the House. I, therefore, speaking on behalf of the Government, welcomed this decision and declared that my only regret was that the decision did not go further and was, in particular, limited to imports on private account, As the Deputy knows, most of our exports go to the British market and the British Government applies the system of bulk purchasing more than any other Government in Western Europe. It is estimated that over half of Britain's total imports from Ireland are bulk purchased through British Government agencies.
As regards our own position in relation to this decision, I may state that it does not affect us directly. We and one or two other participating countries (particularly Switzerland) have not enforced quantitative restrictions of the kind with which we are immediately concerned. Apart from a few quantitative restrictions imposed for protective purposes, which even in the most extreme case would hardly affect more than 4 per cent. of our total import trade at the present time, there is no restriction on imports here. with the exception of such controls as arise from exchange control, which is directed solely to ensuring that the expenditure of foreign currencies is kept within reasonable limits. In particular, this country has at no time imposed restrictions for balances of payments reasons which, as already indicated, were the main alleged cause of the restrictions so prevalent in European countries since the war.