I move that the Dáil do now adjourn. This arrangement is, I think, the most suitable for the purpose of giving the Dáil the earliest possible opportunity of discussing the present external trade position in the light of the recent supplementary Trade Agreement which was signed in London a fortnight ago.
Adjournment Debate. - Agreement between the Government of Ireland and the Government of the United Kingdom.
Might I inquire, before the Taoiseach gets under way, is it proposed to confine the debate to-day to the terms of the trade agreement or to the wider issues involved?
Oh, no. I was proposing to discuss the trade agreement and the European trade situation generally.
The Taoiseach wants the debate to range over the whole trade position?
Over the trade position.
That was not exactly what we were led to believe—but however.
The notification which I sent out was that it would cover the subject of external trade, with particular reference to the recent trade agreement.
Would the Taoiseach mind telling me where he sent that notification?
To the Dáil Office.
Does the Taoiseach not think that it might have come to us, as a matter of courtesy?
I thought it did. I apologise.
It does not matter.
I propose to make a statement covering the circumstances and provisions of the new Supplementary Trade Agreement with Britain and also the present and pending situation regarding European trade generally. In my view, this Supplementary Trade Agreement must be considered against the background of the recent and pending changes in the general European trade situation.
Deputies are, I think, aware that in Europe agreements have been completed for the setting up of two trade associations: one, an agreement for a comprehensive type of common market to which Six States have adhered and which has already commenced to operate, and the other, an agreement for a looser type of free trade association comprising seven other States, which will commence to operate on 1st July next. The common feature of these two agreements is that the members have contracted to give to other members within the same group the right of unrestricted and tariff-free trade on their home markets for industrial products on a reciprocal basis. I think it is desirable that that obligation of reciprocity should be spelt out in the simplest terms possible. It means that each country will secure the right of free entry for its products into the markets of the other members of the group to which it belongs, in return for the opening up of its home market to free competition from the products of all the other members of the group.
Britain, our nearest neighbour in Europe and our principal customer, has joined one such group, the European Free Trade Association, the other six members of which will have, by a continuing process of tariff cuts starting on 1st July and continuing down to zero, secured the right of free entry to the British market by 1970, in return for conceding to Britain in the same manner the right of free entry to their markets for British goods.
I have previously expressed the view here and elsewhere—and so far as I know without a serious dissent from any responsible quarter—that we could not join any trade group of that kind of which Britain, our principal customer in Europe, was not also a member. Because Britain has joined in this European Free Trade Association, we gave very careful and very full consideration to the possibility of our joining in that agreement also. We decided, on the basis of the facts as now known to us—and made known our conclusion in various statements here and elsewhere—that, in our judgment, the disadvantages of membership seriously outweighed the advantages so long as we had a trade agreement with Britain which gave us tariff-free entry for our products to the British market, a right which we have enjoyed since 1938 in consideration of our giving, not free entry for British products into our market, but of conceding preferential rates of tariffs to dutiable products of British origin.
In view of these facts, it will be clear why, in our circumstances, Britain's decision to join the European Free Trade Association made it desirable, and indeed inevitable, that there should be a review of our existing trade agreement with that country. The main trade agreement between us—that which was negotiated in 1938—was, as Deputies will appreciate, negotiated in very different economic circumstances from those now prevailing. Indeed, I think it is relevant to say that it was negotiated in different political circumstances also. That agreement provided for a special type of economic association between the two countries, a form of association similar to that which Britain has with states who are members of the Commonwealth and which, indeed, derives from the time when this State was also within the Commonwealth.
The main features of that agreement were, as I have already indicated, duty-free access to the British market for practically all products of Irish origin on the one hand, and on the other hand, the granting on our part of preferential rates of duty to British products. These special arrangements between the two countries, notwithstanding their discriminatory character, have been preserved down the years. They were recognised in the G.A.T.T. —the general international agreement relating to trade and tariffs—and have been protected in our trade agreements with other countries, such as the United States of America.
Countries with which we have most-favoured-nation agreements do not qualify by reason of these agreements for the application of our preferential rates of duty to their products. By and large, this position has been accepted by the countries with which we trade. These countries—except Canada, with which we have also another special type of agreement— do not claim that most-favoured-nation rights entitle them to our preferential tariff rates.
When Britain announced the intention to participate in the European Free Trade Association negotiations, we were not sure what the consequences for us might be and consultations with British Ministers were arranged. We did not know, at first, whether Britain would be free or willing, if the European Free Trade Association were negotiated in the form then being foreshadowed in the newspapers and in diplomatic dispatches, to continue to give free entry to the British market to our products unless we also participated in the negotiations and accepted the obligations of the agreement.
We did not know whether in that situation, we would be free to continue to give—or Britain free to continue to accept—the preferential treatment we were affording her. The consultations which we arranged with British Ministers went some way towards clarifying that position and relieving our minds and we agreed with them, before the European Free Trade Association negotiations opened in Stockholm and during the progress of negotiations there, to keep in constant consultation with them, and when the European Free Trade Association agreement was eventually completed and published and its terms known, we agreed to begin the final stage of our negotiations on our own mutual trade arrangements.
Speaking to a Press conference here after the publication of the agreement a fortnight ago today, I said this:—
The significance of the new trade agreement is that it reaffirms in a much different international economic setting the special trade relationship between Ireland and Britain which was established by the 1938 agreement.
In our view the most important outcome of the negotiations is that the existence of a special trade relationship between the two countries is confirmed, that notwithstanding the important changes in the whole European trade situation which the European Free Trade Association represents and the changes which have taken place since the 1938 agreement was made, the original form of that agreement has been kept intact, that is to say, free entry for our products to the British market in return for preferential treatment for British products here and that the exceptional character of the economic relationship of the two countries is reaffirmed and, indeed, is emphasised by a new formal consultation procedure.
This supplementary trade agreement together with the supplementary agreement that was negotiated and completed in 1948 and the main agreement of 1938 will henceforth determine the trade relationship between the two countries subject to such adjustment in detail as may be agreed to from time to time under the new procedure.
Before commenting on the details of the agreement, I should like to turn for a moment to consider alternative forms that it might have taken. I have referred to the possibility that in the light of the European Free Trade Association, the British might have contended that the 1938 basis of our mutual trade arrangements was no longer practicable and that if we desired to have continued free entry for our products to the British market, then we would have to seek it on the same terms as those upon which, by 1970, it will be enjoyed by the other members of that Free Trade Association. That possibility no longer presents itself and, as I have stated, the principle of special relationship has been reasserted.
There was, however, the question whether we should seek on our own behalf to alter in a fundamental way the character of our relationship. Deputies will be aware that the Agricultural Marketing Committee, in their final general report published last year, stressed how important and beneficial it would be, and I am quoting now from their report:—
The entry into some form of economic association with Britain which will secure continued and unrestricted access for Irish agricultural produce to the British market if possible with British guaranteed prices linked to an increasing range of our products ...
That idea of closer economic association with Britain in one form or another has been put forward in various quarters, extending from the comprehensive price link which was suggested by the Agricultural Marketing Committee, to the notion of seeking what was rather vaguely described as the complete economic integration of the two countries which was presumed to be possible on some basis which would not involve political changes as well. The fact that this idea of an extended price link had been ventilated by the Agricultural Marketing Committee in their report and that analogous or even more novel ideas were being voiced elsewhere made it desirable to explore the possibilities which were thus suggested.
Our knowledge of the circumstances, including our understanding of the general policy of the British Government in relation to international trade as a whole, their position and policy in relation to Commonwealth trade and the specific undertakings of the present British Government to their own farmers did not suggest to us that any such idea would prove to be very practicable. We recognised however that, apart from its possible political implications, it could have attractions for our agricultural producers. Our view regarding it was founded on its practicability rather than on its desirability and, if it were not found to be practicable, there would be no point in going through the exercise of examining all its other implications.
This consideration, however, was very much in our minds, namely, that if these possibilities were not very fully explored in our discussions with the British Ministers, the idea of such an arrangement would continue to be regarded by some of our people as feasible and would continue to be advocated, thereby distracting attention from the more realistic aspects of our national economic development problem. That created something of a dilemma for us which, I hope, Deputies will understand.
As we intended to explore the suggestion put forward by the Agricultural Marketing Committee and, to that end, put forward to the British Government proposals directed towards the aim of a comprehensive and co-ordinated development of agriculture in both countries, on the basis of clearly related farm price levels and unrestricted access to the British market for Irish exports, we could not ourselves appear to discount in advance the prospects of such an arrangement. While we were very conscious of the risk that by avoiding public reference to it, people here might be led to believe that it was a possible, even a probable, outcome of our negotiations, we were also influenced by the consideration that if the Government here made known that we did not intend to submit that idea in the negotiations and explain our decision by stating our own belief that it was unlikely to be acceptable to the British as a basis for negotiations, there was a danger that political argument here would centre around that very unreal issue, with that idea still being presented to the people here as a practicable possibility. We considered, therefore, that it was important that the possibility of an arrangement of that character should be fully explored and that any question of its practicability should be answered not by a statement of our own conclusions about it but by the decision of the British Government as has now happened.
The matter was discussed in a general way at a meeting at Ministerial level, a meeting which I attended with the Minister for Industry and Commerce and the Minister for Agriculture in London in July of last year. On the invitation of the British Ministers, it was later made the subject of a written memorandum which was forwarded to the British Government. Briefly, the proposals which we made to the British involved action by us, in consideration of their accepting the principle of a general linking of farm produce prices and of concerted agricultural production and marketing policies, to secure for British exporters to the Irish market trade advantages of at least equal magnitude by alternative methods which we suggested.
On the resumption of our negotiations, the British Ministers stated that they had very fully considered our proposals but for a number of practical reasons were unable to accede to them. During the course of these discussions in London, I asked the British Ministers who were present, on the opposite side of the conference table, whether any trade advantage we could offer, either the extension of the present preferential system for British goods, or a bilateral free trade agreement between the two countries by which our industrial protective tariffs would, so far as British products were concerned, be progressively eliminated, or our joining the European Free Trade Association and accepting the full obligations of that Association would enable them, or induce them, to agree to an arrangement for our agricultural products such as had been suggested, that is to say, concerted production and marketing policies and full participation in British price supports. It was stated then, clearly and definitely, by the British Ministers present at the negotiations that no trade advantages we could offer them of that character could in their judgment overcome the practical difficulties involved for them in our proposals. At the conclusion of that meeting, I said at a Press conference in London that the idea must now be accepted as outside the range of practical politics, and I hope it will come to be so regarded here.
There is one other matter not mentioned in the Agreement to which, however, I think I should refer at this stage, that is, the special question of trade with Northern Ireland. That matter was not, in fact, adverted to in the discussions on the Trade Agreement, but I think I should nevertheless refer to it here because, as I am sure many Deputies are aware, there has been some volume of complaint in Northern Ireland of adverse effects upon local industries there, resulting from our trade promotion policies here and some suggestion that the British Government should do something about them.
I have always tried to make it clear in the various discussions I have had with British Ministers that we would not seek, nor indeed would we wish to receive, any trade advantages from Britain which could possibly be regarded as being at the expense of Six County interests. Neither would we desire that measures taken to promote economic development in this part of Ireland should prove substantially detrimental to those interests. We must, however, be realistic and recognise that some adverse consequences may, while circumstances remain as at present, be unavoidable. Our wish would be to reduce the effect so far as practicable.
Deputies will remember that I suggested some time ago the formation of a committee or group of experts or some other body by which matters of that kind could be considered. That idea has not, however, proved to be acceptable in Belfast. It seems to me to be foolish in the extreme when such very practical questions arise, as they are certain to arise from time to time, that there should be no procedure for consultation or even direct communication about them.
It became evident to us during our discussions in London that some Northern Ireland members of the British Parliament were urging on the British Government not to make, or at least to minimise, trade concessions to us, apparently on the grounds, which I suppose we would not contest, that the improvement in the economic conditions here will weaken whatever case can be made for Partition. I cannot say whether these representations had any effect on the negotiations; certainly, there was no sign that they were welcomed in London. The British Government have been made aware of our desire to promote greater trade and encourage commercial contacts between the two areas and that we are willing to go a very long way indeed to encourage that development. One received the impression in London that our attitude in that regard was accepted as sensible and constructive and was, indeed, welcomed. I know there are many business interests in the North who will share our view that, regardless of any differences of opinion between the Governments on the question of the future of Partition, it is sensible to try to minimise its economic consequences for the benefit of the people in both areas.
I propose now to turn to the terms of the Agreement itself for the purpose of clarifying, so far as that may be necessary, its different provisions and, I hope, removing any possibility of misunderstanding of their significance. The Preamble to the Agreement reasserts the special trade relationship between the two countries and the desire to maintain and expand our mutual trade. I want to direct the very special attention of Deputies to the desire expressed in the Preamble to the Agreement to see trade expanding, and the terms of the Agreement should be read in the light of that expressed desire. In the case of agricultural products, we are aware that the possibilities of trade expansion are limited by the British price support policies—a most effective form of agricultural protection which was introduced since our original Agreement was signed in 1938 and which the British Government, for reasons of their own internal policy, appeared determined to maintain. Our possibilities of trade expansion on the British market for agricultural products are, of course, also limited by the competition we may expect to experience from other areas.
In the case of industrial products, it is, I think, probably correct to say that when the 1938 Trade Agreement was being negotiated, it was not then thought likely that Ireland would ever be a serious contender in the industrial export field. Since we have begun to emerge as a not insignificant exporter of industrial products, some British industrial interests have commented on it from time to time. Any anxieties which our industrial exporters may have felt as to the possible outcome of these pressures by British industrial interests on the British authorities may now be fully allayed. The terms of our future trade relations with Britain are now settled. Not only is duty-free entry for our products to the British market to continue but the British Government have again declared their desire and their willingness to see our trade expanding.
Article 1 of the Agreement deals with the price link for cattle and sheep. The Minister for Agriculture will be available to deal more fully with that aspect of the Agreement, if Deputies so desire. I want to make just two points in that regard. For the first time, these arrangements for linking the price of Irish store cattle to the prices of British home-bred fat cattle are placed on a formal, contractual basis. The abolition of the price differential——
Might I interrupt the Taoiseach? What does he mean by the words "formal, contractual basis"?
They have not been on that basis previously.
Of course, that is nonsense.
The words have no meaning.
I am not accustomed to talking nonsense.
The Taoiseach succeeds very well at times.
Order!
Try to persuade the farmers they have not been getting that link for the past ten years.
I have not said that.
The Taoiseach is trying to create that impression.
I have said that, for the first time, that link is now on a formal contractual basis—an integral part of our Trade Agreement. The abolition of the price differential for fully attested store cattle is expressed to be without limit in time. Clearly, therefore, the value of that arrangement will increase with the progress of T.B. eradication. After 1965, all our store cattle exported will, for the first time, have full price equality. It is indeed the first time that any class of Irish cattle entering Britain have secured that price parity.
Nonsense.
We had it before you lost it in 1933.
I know what I am talking about.
I am not prepared to shout down that type of barrage. If Deputies continue that type of interruption, I shall stop talking. Surely on an occasion of this kind we could expect some good manners?
The Taoiseach showed damned little good manners when the Leader of the Opposition asked a question a minute ago.
The Taoiseach is entitled to make his statement without interruption. There will be ample time for everybody else to make statements also.
He was asked a fair question and he did not answer it.
I was asked a question and I did answer it.
The Taoiseach must be allowed to continue without interruption.
It has been agreed that the 3/6d. differential for once-tested stores will continue for as long as such stores are permitted entry into Britain, that is, until 1965.
Article II relates to non-contractual preferences for agricultural goods. I am sure that there are some Deputies opposite who have realised that the preferential treatment enjoyed by some of our agricultural exports in Britain was due to the circumstance that British policy involved the maintenance of protective tariffs on these goods against other countries, protective tariffs which could not, and did not, apply to our products under the 1938 Agreement. We enjoyed the benefit of these preferences without having any contractual right to them. In respect of these non-contractual preferences the British have agreed, without prejudice to their right to change their tariff agreements with third countries, not to alter them without consultation with us and consideration of any views we may have to express. It must be understood, however, that the Article relates to agricultural goods only. In the case of similar non-contractual industrial preferences, it is already clear that these are disappearing in respect of imports from countries in the European Free Trade Association.
Article III relates to a review of our tariffs, a review of our protective tariffs on the basis of giving the British suppliers reasonable opportunities in our home market while preserving protection for Irish industries. This was also undertaken in the Agreement of 1938. That review, however, was frustrated by the war. Before it began the war was in operation and we were, in fact, suspending most of our tariffs and we kept them suspended for its duration. It was again agreed in the negotiations in 1948 that these tariffs reviews should be commenced but, for some reason about which I am not very clear, it did not, in fact, happen. Certainly the order of priority for the reviews to which that Agreement refers appears never to have been drawn up though, in the intervening years, there were some tariff reviews, carried out on the request of the British interests directly concerned, as conveyed to us through the British Board of Trade.
In Article III of this Agreement we have agreed again to undertake to do what we undertook to do in 1938 and 1948. It is to be assumed, however, that the first priority list of duties for review will be drawn up very soon. The main problem created for this country by tariff reviews under the Trade Agreement was not the prospect of the tariff protection enjoyed by some of our industries being reduced —in some instances, that may well happen and indeed, I think we could face up to the fact that it could now well be desirable to bring that about, even for reasons of internal policy— but arose from the fact that on review, in accordance with the provisions of our Trade Agreement, tariffs become bound, that is to say, we lost the power of alternating them even when special circumstances caused exceptional importations. That problem has now been resolved.
This new provision which has been negotiated removes that difficulty for us. This Agreement provides that even in the case of tariffs which are bound in that way, after their review, we can take steps on our own initiative to check exceptional imports for a period of six months at least, where material damage to an existing industry is likely to result.
Article IV relates to the anti-dumping clause——
Before the Taoiseach turns to that, what about balance of payments difficulties in relation to the restriction to which he has just referred?
It does not arise in that connection.
Is our right still protected in relation to balance of payments?
The provisions of the 1938 Agreement in that regard are not changed. This new provision relates to tariffs which have been reviewed in accordance with the Trade Agreement and are therefore bound. In the case of other tariffs, however, we have now the power to modify these tariffs at our own discretion, subject to the preservation of the British preference.
Article IV, as I was saying, relates to the anti-dumping clause in the 1938 Agreement. That clause was so drawn up at the time as to make possible the restriction of imports under it, either our products going into Britain or British products coming in here in rather theoretical circumstances, that is to say where any goods were being sold in the other country at less than the home market price. I may say that the Article in the 1938 Agreement, though expressed to operate either way was, in fact, inserted at our instance because of our anxiety at that time over the possibility of danger to the developing industries of this country by the dumping of industrial products from Britain. The agreement was expressed to operate both ways and there have been suggestions by British interests, to the Government there, that it should be invoked against us in respect of particular products.
The change now made is indicated by the insertion in the terms of the Article of the words "material injury." It is now to be clear that action may be taken only where material injury to an established industry, or an industry about to be established, may be involved. We regard this as a very distinct gain. The reference to third countries in the Article can, I think, be best understood by examining the obligations of Britain under the European Free Trade Association Agreement.
Article V provides for annual consultations, particularly upon agricultural policies and agricultural production trends. I saw in the newspapers a report of a speech attributed to Dr. Greene, President of the N.F.A., in which he appeared to interpret that article as meaning that the Trade Agreement will be renewed annually. That is incorrect. The Trade Agreement between ourselves and Britain, now comprised in three documents, continues in perpetuity, subject to the termination clause in the 1938 Agreement which remains unchanged, that is to say, either Government can give six months' notice to bring it to an end.
We would have preferred an agreement to co-ordinate agricultural policies, but when that did not prove to be possible, we proposed, and secured acceptance of, this provision for annual consultations and for the exchange of views and information. We think this can be of very great value to this country, where information regarding British markets and the policies and the intentions of the British Government can be very helpful to us in planning our own agricultural development. That clause, like all the other clauses of the Agreement, should be read in relation to the declared intention of the whole Agreement: to promote an expansion of trade.
Article VI deals with a problem which has emerged from time to time arising out of cases of special difficulty, affecting one Government or the other, for which the existing agreement made no provision. Deputies may, perhaps, remember the problems that were created for our hosiery industry by exceptional imports from Britain—I think it was in 1952— following the sudden closing down of the Australian market to British hosiery products. The problem arose from the fact that our duty on hosiery is bound and therefore, unalterable, under the 1938 Agreement.
Similarly, representations were made to us on various occasions by the British about such trades as that which developed here in consequence of British restrictions on dollar imports, when they were effective, when United States nylon stockings were imported here from the United States and treated and repacked here to an extent which qualified them for duty-free entry to the British market as Irish products. A Dáil Question was asked to-day relating to other problems that arose in connection with the utilisation of Asian cloths by Irish clothing manufacturers. In all these cases, up to the present, it was found possible to make ad hoc informal arrangements to deal with them, but under this new provision arrangements of that character can be put upon a more formal basis.
The article provides for consultations to seek equitable solutions of such difficulties at the request of either Government.
Before I leave the terms of the new Supplementary Trade Agreement with Britain, there are just one or two general observations I should like to make. It would be grand if we could write all our own trade agreements, if we ourselves could decide the terms and conditions upon which other countries would admit our products, and the prices they should pay for them, but sensible people will understand that that prospect has nothing to do with the facts of life.
This Agreement which we have made is open to the criticism of members of the Dáil. It is proper, and indeed desirable, that it should be subjected to that criticism and we can have no possible objection to it, nor can it, if it is done intelligently, harm any national interests. We are not putting forward this Agreement as that which we would have written if it had been left solely to us to write it, but it is the best we have been able to negotiate. It is, of course, natural and almost inevitable, that Opposition Parties will contend that if they had had the negotiation of it, it would have been better. That is an assertion which can never be either proved or disproved.
Looking back over the period of the talks and negotiations, I cannot think of anything we could have done or any argument we could have advanced that might have changed the Agreement for the better. The protracted period over which our discussions and negotiations extended will at least suggest that all possibilities were very fully discussed.
We consider that it is a very great advantage to this country's economic progress that our trade arrangements with Britain should be re-defined at this time and that any doubts or uncertainties about them should be removed. That has now been done. The British Ministers, in their attitude and in their approach to all the questions we raised, showed every desire to be helpful. Where they were unable to meet us, they were at pains to explain their reasons and, where possible, they tried to go along with us in most of the proposals we put forward.
As I said in a speech last month, now that we know where we stand in respect of British trade, we can investigate in a more precise way the possibilities on the European mainland. I urge Deputies when commenting on this situation, however, to keep in mind that no trade advantages can be gained abroad by any process of pleading or by practising the cult of the béal bocht. We negotiate with other countries in trade matters on a basis of equal status, trading advantages conceded for advantages gained. We cannot always get the arrangements we want even by offering to make substantial reciprocal concessions but there is one thing certain, that is, that we shall never get them on any other basis.
I said that we now have to consider our position vis-á-vis the other countries of Western Europe. The question of our future relationship with the European Economic Community and the European Free Trade Association is one which we have under almost continuous examination. It is clearly in our interests to secure, if possible, that the steps which the members of these two trading groups are committed to take to reduce and eventually to eliminate restrictions on trade between themselves should apply also to imports from this country and, in the case of the European Economic Community, the six nations of the Common Market particularly, that their agricultural marketing arrangements should give our agricultural products access to their markets on fair terms. I cannot say now what the possibilities may be but they are being explored.
The point I particularly want to stress, however, is that we must be prepared to accept, even as one of the so-called less developed countries, the obligation to afford a reasonable measure of reciprocity in return for any trade advantages we may receive. Subject to the maintenance of our special relationship as provided for in the British Agreement and to our obligations under that Agreement, we must be prepared, if suitable arrangements are made for us to share in the advantages of the new trade and economic developments in Europe, to agree to make regular reductions in our own protective tariffs in favour of the countries concerned in accordance with broad principles which will take account of our own economic circumstances.
We are making known our willingness to discuss these possibilities to the 20-Nation Committee on trade problems which was set up at a conference held in Paris in January last, which Committee is charged with the duty of examining the problems arising in the relations of the European Economic Community with the European Free Trade Association with due regard to the interests of third countries. The Minister for External Affairs was in Paris last week for discussion on these matters with the Chairman of that Committee, Mr. Luns, the Netherlands Minister for External Affairs. The Committee is due to meet again on May 24th.
Under the agreement of the European Free Trade Association the first tariff reductions of 20 per cent. are due to be made on July 1st. Under the European Economic Community Agreement the second tariff reduction of 10 per cent. is due on the same date. Proposals for speeding up the process of the tariff reductions within the European Economic Community and for the introduction of the common external tariff on an earlier date than was originally intended have been made and appear likely to be adopted, although there have been some very recent suggestions that action on those lines may be postponed for a short while. On the other hand, the European Free Trade Association have offered, following upon a Ministerial Conference which they held recently at Geneva, to extend to the six countries of the European Common Market and to other countries including Ireland, without reciprocity conditions so far as those other countries are concerned, as a temporary arrangement, the tariff reductions they are due to make amongst themselves on July 1st, provided that the Economic Community are willing to do the same so far as they are concerned. The attitude of the European Economic Community to that proposal is not yet known but it seems clear that the authors of the proposal, the Ministers of the European Free Trade Association, are not optimistic about its acceptance.
Yesterday reports appeared in some usually well-informed newspapers, including the Financial Times, of a possibility of new proposals being made under British initiative by the Free Trade Association to the Economic Community. The position is complicated and still very fluid. It cannot be said that a solution of the problems created by the formation of two European regional groups is yet in sight. The political aims which were long known to underlie and to have determined the character of these European Trade groups are now being more fully disclosed. If no changes occur in that situation—and changes even of a striking character are possible—we must not exaggerate the consequences for this country, even if nothing happens and the distortion of trade over a great part of Europe which is foreshadowed does, in fact, develop. Of our total exports to the Six and the Seven combined, our total exports to Western Europe, over 90 per cent. go to Great Britain where we have under our Trade Agreement the right of tariff-free entry.
Our position in regard to European trade and the problems created by the emergence of these Trade Associations in Western Europe is, for that reason, very different from that of the other four European countries which like ourselves are not members of either the Community or the Free Trade Association. Of the balance of our trade to Europe, only the smaller part, the very much smaller part of our total exports are dutiable goods and therefore likely to be affected by the new conditions. Our exports of dutiable goods to the European Economic Community countries last year were less than £1,250,000, and to the countries of the Free Trade Association, excluding Britain, were less than £500,000.
It is true that the introduction of the European Economic Community's common tariff, when it comes about, may eventually increase some of the duties applicable to Irish exports to Germany, Holland and Belgium because, in the case of these goods and these countries, the effect of the common tariff will be to require them to raise their present tariffs to the level of the common tariff. However, our other exports, because of their character, may be expected to continue without disturbance. No immediate, seriously adverse effects are anticipated and the discussions which I have mentioned, and which are actively proceeding in many European capitals at the present time, may have further beneficial results for us as well as for Europe as a whole.
The situation has this disadvantage for us, that industries in Ireland do not yet know for certain in a long term way the conditions in which they may hope to trade to the countries of the Economic Community or the countries of the Free Trade Association other than Britain. On the other hand, the position may not be to our disadvantage. The reaffirmation of our Trade Agreement with Britain may well prove to be an effective inducement to firms in some of the Economic Community countries to associate themselves with factories in Ireland. Irish agricultural exports to the Economic Community could probably be increased but for the restrictive policies operated in those countries. But it must in all fairness be said that the benefit of quota enlargements already effected under their agreement have been extended to us and we have no reason to think that that practice will not be continued.
The best situation possibly for us would be association with the Common Market, if Britain were also a member of it, on a basis which satisfactorily took account of our economic circumstances. While that best arrangement may not prove to be practicable notwithstanding the Financial Times reference yesterday to an agonising reappraisal which is going on, the position will not in any eventuality be unduly restrictive of our development.
In regard to the future of the O.E.E.C., it seems likely that organisation will disappear and be replaced by some other organisation. The Paris conference of last January, to which I have already referred, set up a committee of four members to make proposals as to the most effective means of bringing this about. The report was published last week, and interested Deputies may have seen it. If any Deputy has difficulty in obtaining a copy of that report, I am sure I could make it available to him.
It is clear that the proposed new organisation, the remodelled organisation to which this report refers, will not be specifically European in character. A meeting of representatives of the 20 countries which are directly involved will be held next month to consider these proposals, and it is apparently contemplated that a draft convention based upon their report will be ready for signature and ratification by July next, although the new organisation will not, in fact, come into existence until next year because of problems associated with its ratification by the United States of America.
The report of the Committee of Four has not yet been fully considered by the Government. The proposals contained in it seem, at first reading, to be vaguely formulated and difficult to interpret. We can say that, while we welcome the prospect of full membership of the new organisation by the United States and Canada, and while it is true that O.E.E.C. has lost some of its effectiveness since the collapse of the Free Trade Area negotiations, we regret the prospect of the passing of this specifically European body.
The special problem this will present to us is that, because the 20-Nation committee now dealing with trade problems which I have mentioned, is only a temporary and informal arrangement, there will be no European organisation with special responsibilities in relation to European internal trade or to consider the problems of States like ours which are in neither the European Common Market nor the European Free Trade Association. The new organisation will be wider and more diffuse in character and it does not appear to be intended to give it any specific functions in regard to European trade matters—either to require it to deal with the possibilities and problems of trade distortion arising out of the policies of the Six and the Seven or the problems of Western European trade as a whole.
While we cannot be very enthusiastic about what is now proposed—and we know that other European Governments share our misgivings—we have to recognise that it is only by general agreement that bodies like O.E.E.C. can be set up and that the definition of their ideas and their functions can be drawn only at the level at which general agreement is possible. We must, at this stage, assume that the proposals contained in this report of the Committee of Four will be adopted, in view of the powerful backing they will have. It seems that henceforth trade matters will be dealt with in the G.A.T.T.—the General Agreement for Trade and Tariffs. We are not a member of G.A.T.T., although it should perhaps be noted that Irish products have heretofore got from all countries the benefits of tariff reductions negotiated under the auspices of G.A.T.T.
In these circumstances, and particularly in the light of the pending disappearance of O.E.E.C., we are considering whether our interests would not be served by joining G.A.T.T., which would bring us into the international organisation in which trade problems will be discussed and which would ensure for us the right to benefit from any future tariff reduction negotiated between its members. Perhaps to avoid misunderstanding, I should make it clear that the generalisation of tariff reductions negotiated in G.A.T.T. would not apply to reductions negotiated between themselves by members of a free trade area.
It is important also to remember that there are important trade possibilities outside Britain and outside Western Europe. While Britain will always remain undoubtedly the most important market for our exports, our exporters must not neglect opportunities in other countries, if we are to achieve the objectives set out in the White Paper, Programme for Economic Expansion, of intensifying on a sound economic basis the upward trend in agricultural output and expanding the industries catering for export markets.
It is important that we should supplement our trade with Britain and Western Europe by developing markets overseas, both in the highly industrialised countries like the United States and Canada and in the developing countries whose requirements of manufactured goods, and even food, outrun their capacity to supply. We have a substantial and rapidly growing market in the United States of America and Canada to which we exported goods to a total value of £11,000,000 last year, representing a 35 per cent. increase on the previous year.
The United States of America is, after Britain, our biggest market for agricultural products, taking £7½ million worth of such products in 1959, including £6,000,000 worth of beef. With rapidly expanding populations and rising living standards in the United States and Canada, there are markets which afford valuable opportunities to countries which are in a position to export competitively high-grade food products and specialised items.
Surely the Taoiseach does not include our exports of boxed frozen manufacturing beef to the United States as high-grade. It is a very specialised trade.
I refuse to describe them as anything else. In the Canadian market, we enjoy a number of trade preferences under a trade agreement which was negotiated as far back as 1932 and has continued in force ever since. Coras Tráchtála, who have permanent representatives in Canada and the United States, are confident of a further increase in industrial exports to these countries in this year.
Other markets which appear to be worthy of attention in the Western Hemisphere are the British West Indies and Venezuela, which took £505,000 and £440,000 respectively of Irish exports last year. The exports to Venezuela included beef to the value of £370,000, and that is an example of the initiative displayed by our meat exporters in search of overseas markets and an illustration of what can be achieved. In Africa, and elsewhere, there are populous regions hitherto undeveloped, which are becoming independent States and where there is every evidence of goodwill towards this country. Their purchasing power is rising steadily and markets are becoming available which would well repay development by our exporters.
Coras Tráchtála have carried out surveys in some of these countries and already we are exporting to Ghana, Rhodesia, Nyasaland, British West Africa and East Africa, Belgian Congo and French West Africa. Irish manufacturers have valuable export outlets in Commonwealth countries. Our exports last year to Australia, New Zealand, India, Pakistan and South Africa amounted to nearly £600,000. The possibilities in the Middle East are being continuously explored, and a number of firms combined some months ago to send a representative from Coras Tráchtála on a mission to that area. Recently, as Deputies will have noticed from Press reports, private interests have been exploring the possibilities of trade with Israel. If we adjust our export thinking to wider horizons and seize the opportunities to be found in various markets, we will provide a valuable stimulus to both our agriculture and industry.
Notwithstanding some disadvantages in the present trade position, and I am sure there will always be some disadvantages, nothing has happened or is likely to happen that will prevent our expanding exports, provided we can get our production and distribution methods on the most efficient basis possible. That is true of agricultural products as well as of industrial products. If we can place our products on export markets at the same prices, quality for quality, as other suppliers, there is no limit to the extent we can sell them. Because that is our conviction, we have tried to explain in all the public statements made by and on behalf of the Government that it is what we do here to improve the efficiency of our production methods and not what may happen in regard to trade agreements and arrangements that matters most of all.
Let us be clear that nobody in the world feels under any obligation to prop up our economy by buying our goods at uneconomic prices and it would probably be a very bad thing for us in the long run if there were. We should look on these trade arrangements with this understanding that we have not got a grievance against anyone.
So far as the Government are concerned, we are not going around the world looking for handouts, concessions or charity or to seek trade advantages or opportunities except upon the basis of reciprocal advantages given here. We believe it is possible in this country to organise to produce many classes of commercial goods as efficiently as elsewhere. On that basis, we have now and we are entitled to expect that we shall always enjoy, trade agreements and arrangements which will enable us to sell all we can produce. We have such an agreement with Britain, and we have many fair agreements with other countries, that is, agreements which give us the opportunity of sale of our products without limit with countries which at present take 93 per cent. of our total exports.
As to the seven per cent. of our trade which is now done with the Western European countries which have entered into these new trading operations, we have no doubt that there will be a desire amongst them to facilitate our trade and, indeed, it is in regard to that sector of our trade that we have the most obvious bargaining advantages. You can be sure that we shall have all the opportunities for trade expansion which we have the capacity and the energy and the ingenuity to use.
We were told today that the Taoiseach desired to move the adjournment for the purpose of inaugurating a discussion on the Agreement between the Government of Ireland and the Government of the United Kingdom. We learned when the Taoiseach rose that he wished to expand the scope of our discussions very considerably on the general trend of trade and he expressed regret at his oversight in not indicating that intention to us. We accept, naturally, his expression of regret.
I am under the impression it was communicated to the Deputy but I have not checked.
The Taoiseach can verify it because I have since verified it from the usual channels.
We accept the Taoiseach's expression of regret. I hope he will not charge us with discourtesy if I go on to say that we very fully understand his desire to expand the scope of our discussion because, in the interval since we received his first notification, my colleagues and I have given very close attention to the provisions of the Agreement between the Government of Ireland and the Government of the United Kingdom. I confess I had great sympathy with the Taoiseach in his prospective task of inaugurating a debate on its contents. I said to my colleagues: "If my judgment goes for anything this discussion will terminate in the early afternoon today because there is nothing to talk about."
It is understandable that we have been called upon to range over O.E.E.C., the Seven, the Six, the Four, Ghana, the Continents of Europe, Asia, Africa, not omitting Canada, the United States and Caracas.
And do not forget Venezuela.
Caracas is the capital of Venezuela and it is said to be the most expensive capital in the world. I do not think that we should discount the importance of the potentialities of markets even in such remote places as Ghana or the tropical countries of the Far East, the Middle East and Africa. They all have possibilities to which I had occasion in the past to refer and to which I shall make reference later today.
My primary purpose is to meet the requisition made upon the Opposition by the Taoiseach in his original message, that is, to discuss the Trade Agreement between the Government of Ireland and the Government of the United Kingdom. I want to say clearly that we naturally assume that any Irish Government representing this country in trade negotiations in Great Britain did their best. We, of course, assume that the present Government negotiating on behalf of our people in London did their best. I am bound to say that the fruits of their best endeavour are disappointing. I accept freely, as the Taoiseach said, that that may not be their fault. There are always two parties to any negotiations and you can only get enshrined in an Agreement of this kind that to which both parties are prepared to agree. All I can say is that it is something for which we can be profoundly grateful that when we come to peruse this document we can happily remember that another delegation on another occasion went to London in 1948 and that document at least preserves for us the fundamental advantages then secured for the agricultural industry of this country.
I do not think I am unduly harsh if I make the comment now that, if instead of cavorting round this country for the past 18 months chewing the rag about proportional representation and endeavouring to establish, in the classical words of the Minister for Local Government, a Fianna Fáil establishment here by wiping out proportional representation, we might be in a stronger position now than we appear to be. At least, if, instead of occupying ourselves with those kind of activities, we had been considering our trade relations with Great Britain, Article 2 of this Document would have been in operation before the Danes managed to get away with the preferential position that we used to enjoy in the British market. At least, we would have the advantage of consultation with Great Britain before that was thrown away.
I interrupted—I hope, courteously— the Taoiseach, when he was speaking today, and tried to elucidate the form of words which he has used on more occasions than one. I asked him what he meant by saying that certain price relationships between our livestock and livestock born in Great Britain were placed for the first time on a permanent contractual basis. I do not even understand the meaning of the phrase he uses and I think the reason I do not understand it is that I do not think the phrase has any meaning. I do not think it has any purpose other than to deceive the public.
In opening his statement the Taoiseach said that the Government attached very special importance to the preamble to the Agreement which he presented to the Dáil today. It begins:
The Government of Ireland and the Government of the United Kingdom, having regard to the special trade relationship between the two countries, have agreed that, with a view to maintaining and expanding trade, the following provisions shall supplement the Trade Agreements of 1938 and 1948.
He said that constitutes a guarantee to our exporters, industrial and agricultural, that there would be no steps taken on the British side to delimit further the available market in Great Britain. He said that to that introductory phrase he, as the principal negotiator on behalf of this country, attached very special importance. He asked us to remember that this current Agreement was to be read in association with what he called the principal Agreement of 1938 and the Agreement of 1948.
I think the House might with advantage refer to these documents and recall that the Trade Agreement of 1948 began as follows:
The Government of Ireland and the Government of the United Kingdom, desiring to increase trade between their respective countries to their mutual advantage, have agreed as follows.
I think it is not without significance, and it should be borne in mind that it is the formula inserted in the introduction to the 1948 Trade Agreement which is now the introductory paragraph of this Agreement and to which, as I understood the Taoiseach, the present Government attaches supreme importance from the point of view of securing the future of our prospective access to the British market.
I return to the question. What was the meaning of saying that the link between the price of cattle and the price of sheep is now on a contractual basis? The facts are that for the past twelve years the price of store cattle exported from this country to Great Britain has been regulated by the fact that these cattle, if they have been in Great Britain for three months, become eligible for the same guaranteed prices as are obtainable for cattle bred in Great Britain with the differential now of 3/6 per cwt. which was originally 5/- under the 1948 Trade Agreement but was reduced by a subsequent Agreement made by me or by my predecessor. I cannot remember which.
It was by me, because I remember very reluctantly consenting, at the insistence of the British, that the period of residence of our cattle in Great Britain should be extended to three months, but in consideration of that they reduced the differential from 5/- to 3/6, but these terms obtained for the past twelve years, since the 1948 Trade Agreement was established, and in regard to sheep a similar link existed subject to a differential of three farthings.
The 1948 Trade Agreement contracted to maintain it for four——
I have the trade agreement here. Paragraph 6 of the Annex on page 6 states:
The Government of the United Kingdom undertake that they will not introduce any excessive increase in the existing difference of 5/- per live cwt. between the prices paid by them for cattle bred in the United Kingdom and those paid for cattle from Ireland fattened for a minimum of 2 months in the United Kingdom.
I do not know what limit the Taoiseach refers to. I understood, as he said today, this Agreement and the other two, that of 1938 and the one which he mentions today, were scheduled to continue indefinitely subject to notice of six months on either side for the termination of the Agreement. Certain it is that paragraph 6 of the Annex of the Trade Agreement between the Government of Ireland and the Government of the United Kingdom has regulated the shipping of cattle and sheep from this country to Great Britain and Northern Ireland for the past twelve years subject to the modifications made from time to time by mutual consent between the two Governments.
When we come to the second paragraph of Article I of the new Agreement to which the Taoiseach referred today, the elimination of the 3/6 per live cwt. differential in respect of fully attested cattled, that amounts, I think, to something of the order of 35/- a head in respect of cattle fully attested. Still, if that removal of the differential is continued into the time when our cattle going to Great Britain shall be attested it is undoubtedly a valuable consideration. The sum of 35/- per head on all the store cattle leaving this country would be a valuable addition to existing revenue but, as of the present time, it is of very little consideration because very few cattle going to Great Britain at present are of accredited status. Most of them are going under the 14-day test procedure and therefore do not qualify for this concession.
So far as I know the proviso regarding sheep and lambs is the same as has obtained for the last 12 years. I am sorry that Article II was not available to us whereunder we might have claimed to discuss the concession made to Denmark which is destroying our preferential position in the British bacon market. But these concessions were secured by Denmark when we in this country were occupied with other preoccupations.
Article III reiterates an undertaking given by this Government and the Government of Great Britain, both in the 1938 and 1948 Trade Agreements, to initiate a review of protective duties and other import restrictions applied in Ireland on goods produced and manufactured in the United Kingdom. The Taoiseach quite innocently says that that review does not seem to have taken place consequent either on the 1938 or the 1948 Agreement. He seemingly overlooks the fact that he was Minister for Industry and Commerce in the Government of 1951 to 1954. If he did not learn in that period why these reviews did not take place, it is rather surprising. I think the principal reason was that we had no desire to undertake them because we believed these reviews were incorporated in all kinds of agreements at the request of the British Government for the purpose of reducing such protective measures as successive Governments in this country had, in their wisdom, taken for the protection of specific industries in this country and it was not desirable, except in so far as the letter of our Agreement obliged us, to review these with a view to reducing them.
I know of no other reason why these did not take place and I believe the Taoiseach knows well that it was part of our policy to dissuade the other parties to this Agreement from claiming too vigorously to enforce the rights they undoubtedly had acquired under the 1938, the 1948, and this Agreement.
The Taoiseach spoke of Article IV of this Agreement and said that it is an immensely important concession to ensure that neither Government, in the circumstances envisaged in Article 14 of the 1938 Trade Agreement, will "impose special duties or other import restrictions on goods the growth, produce or manufacture of the other country, unless satisfied that the effect of the import of such goods is to cause or threaten to cause material injury to an industry established in the importing country." Of course, that is all eyewash. We both know perfectly well that Article 14 could not be invoked by the other country except substantially on those grounds. The very essence of the allegation of dumping is that the operation is gravely injuring some existing interest in your own country. Nobody objects to somebody giving you something for nothing if it does not affect some domestic enterprise of your own, but of course the very essence of the word dumping means that by consigning merchandise to your country at a price lower than that at which it could be economically produced it causes or threatens to cause material injury to the established industry in the importing country.
I think it a pity that the Taoiseach should seek to pretend things which simply have no validity. I sympathise with him. There is very little in this Agreement and I do not really blame him for it. I think he did his best but I think it is foolish to say that these are great achievements when, in fact, they are nothing at all. Article V, to which the Taoiseach referred, provides that representatives of the Governments shall meet once a year and at any other time at the request of either Government and in particular to exchange information and views on agricultural policies and production trends. That is eyewash. The Taoiseach knows, and the Minister for Agriculture knows, that such discussions are going on every day. I do not suppose that a day passes in the Department of Agriculture without contact being made with London, either directly from Department to Department, or through the Irish Embassy in London, in relation to trade matters of mutual concern to ourselves and Great Britain.
I am perfectly certain that the Taoiseach and the Minister for Agriculture know perfectly well that there is a continuing exchange of information and views on agricultural policy and production trends between the two Governments which proceeds by telephone or by mutual exchange of visits. Has there been a week in the last three years in which some representative of the Department of Agriculture has not been in London, or in which we have not been receiving some representative from Britain in the Department of Agriculture in Dublin? Sometimes it is a veterinary man, sometimes it is a man concerned with milk production or marketing or with some other activity in which the two Departments are vitally interested. But these discussions proceed continuously, very happily and to great mutual advantage of both sides. We are frequently able to be of assistance to the British Department of Agriculture and they, equally frequently, help us in one way or another by consultation and information.
Article VI speaks of the two Governments undertaking, at the request of either, to seek in consultation together equitable solutions for any cases of special difficulty which may arise in trade between the two countries. When did they ever not do so? Was the Minister for Industry and Commerce not telling us here to-day that the British Government raised with us the question of the export of Asiatic cloths, and that the Minister for Industry and Commerce, at the request of the British Government, asked Irish manufacturers to limit exports to a certain amount in order to avoid an impossible situation arising with the British Board of Trade? As far as I know discussions of that kind have gone on continually.
I do not think it is expedient to ventilate all these various agreements that exist; anybody familiar with the procedure of the Department knows that there are 40 or 50 such in existence which were negotiated quietly on the basis of two good neighbours who wanted to live together and conclude trade relations together without quarrelling about normal difficulties that arise in the day-to-day transactions of two countries so closely related, as this country and Great Britain must inevitably be in the economic sphere.
Mark you, I often wonder if the Taoiseach and his Government are wise in trying to define these ineffable contacts too precisely in Trade Agreements of this kind. I think the working arrangements that operate by practice, and by mutual desire to colloborate, are often the more valuable and I recall that with special emphasis because when you look at paragraph 6 of the annex of the Trade Agreement between the Governments of Ireland and Great Britain of 1948 you will see that the terms are that the Government of the United Kingdom undertake they will not introduce any excessive increase in the existing difference of 5/- per live cwt. between the prices paid by them for cattle bred in the United Kingdom and those paid for cattle from Ireland fattened for a minimum of two months in the United Kingdom. I well remember that formula was arrived at between myself and the Minister for Agriculture in Great Britain. It was confirmed by the Chancellor of the Exchequer, the late Sir Stafford Cripps, who led the British delegation. Only a short time afterwards, we received a communication from a zealous civil servant in the British Department of Agriculture suggesting that the words "excessive differential" should be deemed to mean 6/- instead of 5/—I think it was 6/- or 6/6d. I remember well asking the late Mr. Dulanty, who was then our Ambassador in London, to bring that letter to the Chancellor of the Exchequer who had led the British delegation and to ask the question: was it not a violation of the spirit of the understanding of the negotiations? The reply he sent back was: "Tell Mr. Dillon to tear that letter up," and we never heard another word about it.
I think that element of flexibility and that evidence at a very early stage when the terms in the distillate of this Agreement fell to be tested between the two countries showed it was a very valuable thing because it was established that our mutual undertaking to each other would have greater value than the printed word which actually constituted the terms of the general Agreement. In fact, from the date the Agreement was signed, the only change introduced in the differential was a reduction from 5/- to 3/6, albeit in consequence of a British request that we would extend the period of sojourn of Irish cattle in Great Britain from two months to three months. The only change was to bring it down and the only time an effort was made to raise it, the message I got from Sir Stafford Cripps who signed the Agreement with Mr. John Costello was: "Tear the letter up, and regard the suggestion as never having been made."
I do not know, but I am bound to say quite deliberately in regard to this Agreement that it seems singularly appropriate to me that when we come to sign this Agreement of 1960, no Minister of the Irish Government put his name to it. It was signed on behalf of Ireland by our Ambassador in London.
But it binds us all the same.
Quite. I do not challenge that for a moment but I think there is something symbolical in it and that is about the height of it. It was the kind of an agreement that was properly signed on behalf of the British Government by the Earl of Home and on our behalf by the Irish Ambassador in London. If it was the best we could do, so be it, but I am glad that if it did nothing else, it has preserved for us the benefits originally secured in the 1948 agreement and their preservation, I think, is of some real value to our economy.
The Taoiseach has widely expanded this discussion and has covered the general question of European trade. I do not know how far we are required to follow him into that general discussion. We do not intend to divide the House for the purpose of expressing our disapproval of the Trade Agreement because we have the assurance that it is the best he could get and no man can do more than his best. Any man having gone and done his best is entitled to come back to his own country and look for whatever support he is entitled to expect. I think once he certified for us that he has done his best and acknowledged our duty to criticise the fruits thereof, it does not behove us to move any vote of censure upon him and we do not propose to do so. But there are some matters of detail to which I should like to refer in respect of these references to foreign trade.
I have put forward, and my colleagues, Deputy Cosgrave in relation to Industry and Commerce and Deputy Sweetman in relation to financial implications, and various others of my colleagues who have spoken on the question of foreign trade, have put forward certain suggestions from time to time as to how the volume of that trade may be developed. It is interesting to note that the Taoiseach has it to tell today that there has been a substantial increase in industrial exports and I think it wise to direct his attention to a very simple fact in regard to that expansion. It is that far more effective than exhortation or threat is inducement in a matter of this kind.
I should be anxious to hear from the Taoiseach at some stage whether he agrees with me that probably one of the most potent forces in this expansion was the virtual exemption of profits on increased industrial exports from liability to income tax. That departure has been a most successful expedient for inducing people with an export potential in this country to develop it because they suddenly discovered that of all the profits, these were the most rewarding in that they did not attract the usual rate of tax. I think the Taoiseach will recollect that that is an export inducement which was inaugurated by our Government and which is being continued by the Government over which he now presides.
I deliberately intervened again when the Taoiseach, speaking of our exports to the U.S.A., seemed to think that the export of beef to the people of that country belonged to the category of our top-grade export. I think there is a grave technical error in that description. In the class of comestibles to which these exports belong, the quality cannot be surpassed but it is manufacturing meat and it would be quite a mistaken impression to create that boxed frozen beef represents the optimum export in the dead meat trade: it is a product specially prepared for a special trade and fortunately we are in a position to meet a particular trade in the U.S.A. at present with some valid prospect of retaining a permanent place in that trade. But it is a trade for manufacturing beef, the bulk of which is processed in America, into salami, sausage or soup. It is certainly not a product which we would wish to present to the world as representing our best quality beef export.
Our best quality beef export is carcase beef for human consumption, the quality of which compares favourably with the quality of beef produced by any other country. This particular product which represents the bulk of our meat exports to the United States of America is in its particular category probably superior to that from any other source of supply. Nevertheless, it is boxed, frozen beef, entirely designed and consigned for industrial conversion in the United States of America and wherever else it may be sent.
I do not propose to follow in detail all the matters covered by the Taoiseach in his address relative to the Six and the Seven and the Four, but I do want to comment on one matter. Though I listened with close attention to what the Taoiseach had to say on the prospective developments and possibilities in relation to the Six and the Seven, and the recommendation of the Four, not to speak of the Twenty, I could not get any very clear impression myself of what our Government's intentions are in relation to the Seven, the Six, the Twenty, or the Four, except that the Taoiseach was considering ought we to join G.A.T.T. should O.E.E.C. disappear. I sympathise with the Taoiseach. I suppose he has no very clear idea himself as to what his intentions are in respect of the Seven, the Six, the Twenty, or the Four. I think that long dissertation, which was very entertaining but not very informative, was put in largely for the purpose of grafting a little flesh, however nutritionally deficient it might be, on the skeleton of the Trade Agreement that he was charged to discuss. Oddly enough, he seemed to me to omit some meat that he might profitably have chewed over with us today.
We know all the difficulties that have arisen between the Seven, to which Great Britain belongs, and the Six, but we do not know what has happened or what is likely to happen as a result of the intervention of Mr. Douglas Dillon in the discussions which are proceeding in Paris and which, I think, relate to the Twenty. His proposals are being considered by the Twenty. Is that not so?
Yes.
Possibly nobody knows yet what the prospects are there. Here, I think the Taoiseach could have given us information which would have been very valuable if he had it; perhaps he did not have it. Is it intended, on the face of the American intervention, that there should be some wider trading area than either the Six or the Seven? Is it intended, or is it contemplated anywhere, that there should be a trading area which would comprise not only the Six and the Seven but possibly the other countries of the Commonwealth and the United States of America as well? If such were in contemplation, then I take it this country would feel an obvious obligation to consider urgently and very sympathetically adhering to such an economic bloc?
I could not gather from the Taoiseach's statement, however, any clear indication of what our Government's view is on the intervention of Mr. Douglas Dillon and the Canadian Government in the discussions that are proceeding, as I understand it, in Paris, and to which I believe our Minister for External Affairs went last week. Perhaps the Taoiseach will be able to tell us before this debate concludes when and whether he can give us any further or better particulars about the prospects relating to what we will call the "Twenty". I heard with some emotion the Taoiseach informing his assembled corps that the first essential of all sane economic thought in this country was a constant recollection of the fact that 90 per cent. of our exports go to Great Britain and Northern Ireland.
No. I said 90 per cent. of our trade to Europe.
Ninety per cent. of our trade with Europe represents about 90 per cent. of our total trade.
The British take about 75 per cent. of our exports.
It is an interesting and salutary thought to recall that Fianna Fáil is beginning at last to accept that as one of its basic principles for economic policy. I take it the Taoiseach will not be unduly dismayed if I recall the day when he used to assure us that that market was gone for ever, and hastened to add: "Thanks be to God".
The Deputy knows quite well I never said anything of the sort.
I am delighted to hear it.
We cannot blame the Taoiseach for the sins of others.
There is more rejoicing in Heaven over one sinner repentant than over 1,000 just men. If, over many years, part of our public service has been to bring this worthy man round to a realisation of economic fundamentals, let us not count it as the least of our achievements that he has been converted. The young people whom he now influences should remember with gratitude that it was we who reformed him. Providentially, the Minister for External Affairs is absent. Otherwise, he might have a stroke. I have no doubt he will read this later and somebody will then have to apply a cold towel to his head and get him through his spiritual crisis.
If the statement was ever made, it was not made by anybody who is now, or has recently been, a member of the Fianna Fáil Party. It was attributed on one occasion to a Minister of the Fianna Fáil Government, who ceased to be a Minister——
Freedom of speech for the Taoiseach has come. He is able to speak his own mind now.
Let us join in mutual rejoicings. If it was said, it is now repudiated, and the Taoiseach would like to believe that he was never associated with a Government in which anybody said it. That is admirable and I am delighted to have lived to see the day on which I persuaded him to say that.
What about a former Taoiseach who threatened to hit the British in their pride, and in their purse, and in their pocket?
And he had good reason to say it.
I think the Minister would be wise not to pursue these topics. Remember, there is a context of Partition in which it is very natural for human reactions in this part of Ireland to grow pretty heated. I think responsible men now on both sides of the Dáil have an obligation to do all in their power to avoid words or acts which are provocative. Perhaps it would be well that the Minister should recall, when he is being peculiarly severe about those whose acts contribute to trouble, that words can be just as inflammatory, and, bearing that in mind, leave it to the Taoiseach today——
I always held that view.
——to deal with the matters which are here under debate. I agree with the Taoiseach in the view he has expressed that from the point of view of Ireland it may be a matter of material regret that O.E.E.C. should disappear. I agree with the Taoiseach that it would be desirable from the point of view of Ireland that there should continue to exist some organisation where the operation of inter-European trade could be discussed in an orderly and constant way. I do not know whether the obligations of G.A.T.T. are consistent with the economic circumstances of this country. The Taoiseach has not gone very deeply into that here to-day. I suppose before we adhere to that organisation some other occasion will be provided for discussing the matter more fully.
I have nothing further to add except to summarise what I have sought to say by expressing my sympathy with the Taoiseach on the failure of his Government to secure a better agreement with Great Britain, by expressing my satisfaction that at least we have succeeded in preserving certain very valuable concessions originally secured in the 1948 Trade Agreement and by finally placing on record that, while at first glance it may seem that mutual arrangements between this country and Great Britain are of primary concern to Ireland, I think a more rational and long-sighted view should carry conviction to statesmen—and I use the word advisedly—in Great Britain that equitable trading arrangements between this country and Great Britain are in her interest, too.
Those of us who have had personal or vicarious experience of conducting day-to-day relations with Great Britain more fully understand than those who have only undertaken the task recently the job we sometimes have to do in converting the British themselves to what is, in the last analysis, in their own best interest. There may be interests in Great Britain who, actuated by ulterior motives, are reluctant to see exhaustive reciprocal trading relations established between ourselves and Great Britain. If we believe, as I believe, that the greatest measure of economic integration that can be established between this country and Great Britain is not only in Ireland's interest but in the interest of Great Britain herself, we should continue to press that view upon the Government and the people of Great Britain. It may not come to-day; it may not come tomorrow; but if we keep moving towards it, then I think great benefits could ultimately emerge for ourselves, for our people in Northern Ireland and for the people in Great Britain itself. Although the Taoiseach did not appear to express much enthusiasm for the concept in his observations to-day, he told us that when he was going to London he was going there with that aim in view. I take it that, when he said it, he meant it. I take it then that he shared our view that it was a good end to aim at.
I do not think we should simply abandon the end and the aim, if it is a good one, simply because it has received a temporary check. It may take time to get all the people who have to participate in the realisation of that dream to accept it at our valuation. I think we should go on aiming towards it, and the nearer we get to it the better it will be for our people and the British people. I dare to add this: the better example it will provide for nations further afield who always seem to be preoccupied with marshalling their resources to assist neighbours 10,000 miles away but who always seem to recoil with horror from the assignment of undertaking some reciprocal arrangement with their own neighbour next door which might be of very material advantage to both.
I do not understand the philosophy, which seems so common in world affairs to-day, that nations are called upon to mobilise their resources in order to rush to the assistance of other countries 5,000 or 10,000 miles away from them and to provide that assistance in the form of pouring out their wealth into the country which they believe to stand in need when, side by side with it, there may be a neighbour who wants no gift of anything but simply wants the opportunity of mutual reciprocal trade on a basis of an equitable reward for both. That kind of arrangement always seems to give rise to insuperable difficulty while ten, 50 or 100 times the cost will be cheerfully undertaken in what is very frequently the most unrewarding and often undesirable activity of shovelling gratuitous benefactions on a country which grows accustomed to living by them and often finds, at the time they reach their end, that to carry on without them is socially impossible.
I think we should continue to preach not only to our next door neighbour, Great Britain, but to all those with whom we come in contact that equitable trade agreements, designed to promote trade without promoting starvation in either part of the Agreement, are perhaps the greatest contribution to world peace and the desirable type of economic development that can be provided. If such were habitually substituted for colossal gifts which cannot be permanently sustained, probably more enduring good could be done, and should be done, than is being done at the present time.
I do not think it unreasonable to express disappointment with the document before the House, but I think it would be wrong not to express the hope that at some future date this Government, or its successor, may in some subsequent Agreement produce a more satisfactory and equitable basis of trade between our country and our principal customer.
In view of the recent changes in European trading, there was an urgent and, of course, an inevitable need for this country to make a new Trade Agreement with Great Britain. All of us will agree that it was impossible that Ireland should be a part of what is generally termed the Common Market, especially in view of the fact that Britain was not a part of it. It was also imperative that we seek a new Agreement with Britain in that Britain became a part of what is now commonly termed the Outer Seven. It is impossible, I think everybody will also agree, to expand to any great degree our trade with any of the Common Market countries and those in the Outer Seven, other than Great Britain. As a matter of fact, as the Taoiseach has said, our trade with many European countries shows quite an adverse balance, a balance which, in my opinion, would become more adverse if we were to contemplate and endeavour to obtain trade agreements with them.
Therefore, it seems to me, and I think it must be generally realised, that the only outlet we have as far as trade is concerned, and as far as a trade agreement is concerned, is with Great Britain and I think we should be prepared to forget many of the things that were said in the past, such as: "Thank God, the British market is gone, and gone forever." We should also forget who said them and keep before ourselves the fact that Great Britain is the best market and the best prospect for the export of goods from this country, be they agricultural or industrial.
Unfortunately, in recent times many people thought in terms of our external trade vis-á-vis our balance of payments. The balance of payments problem in recent years has been one with which this House has been concerned, but a balance of payments problem could, in ordinary circumstances, be corrected by action which it is open to a Government, including this Government, to take in the form of restrictive levies, duties, restrictive quotas and so on, but the vital concern of the nation at the present time is the expansion of trade and the expansion of our economy, in order to deal with what we regard as our main problems, the problem of emigration and the problem of unemployment and, consequent upon these, the improvement of our living standards. Therefore it is understandable and desirable that we should turn to what the Taoiseach has described as the 53 million people who are in Great Britain, who are nearest to us, as an outlet for what we can produce.
The Taoiseach and the Government are fully aware of all these problems, emigration, unemployment, and the desirability of increasing our living standards. With all these in mind, he and his Government last July—from what I gather, especially from what he said to-day—submitted a memorandum to the British Government. When speaking on this, I should like to have a few points clarified. The Taoiseach attempted to be clear in his speech to-day and I shall not accuse him of being dishonest, but I think he ought to expand on what he said. He talked about economic association and economic integration and he suggested that this was not his idea. I should like him to elaborate on that a little more.
I find it very hard to believe what he said, that this idea of economic integration with Great Britain was mooted by certain people whom he regarded as not being too irresponsible. I think he said that the idea came from a recommendation of the Marketing Advisory Board, but it seems funny to me that the Taoiseach would be prepared to go across to the British Government and submit such a proposal, it not being the view of an Irish Government. If he did not do that, I should like him to make it clear when, he is replying to this debate. I do not think it is right that an Irish Government should take an idea that was mooted by such a body as the Marketing Advisory Board and present it to the British Government because inevitably the British Government are bound to believe that it is a suggestion of the Irish Government.
If economic integration with Great Britain were suggested in the memorandum submitted in July, what was the reply from the British Government? The Taoiseach said it was turned down out of hand. I do not think it was turned down out of hand in view of the fact that these negotiations continued, if not between the Ministers between officials of the two countries, from September to February last with, of course, a few breaks in between. The Taoiseach says that the British Government said it would not be acceptable to them because they would find themselves in difficulties with British farmers as far as agricultural products were concerned, and I think it was suggested later that if the British Government were ever to accede to a request for economic integration, they would find themselves in difficulties with the Government of the Six Counties.
I mention these matters so that the Taoiseach may clear them up when replying, and I should like to ask him was the suggestion of the Irish representatives for economic integration turned down just for those reasons, or did the British Government ask for anything in return? I do not want to be a mischief-maker but I do want to get this clear. Did the British Government make any political demand on this country?
There was no such suggestion.
I want the Taoiseach to reply to these points because I believe it is in the minds of many people in this country that these negotiations were not carried out in the simple way the Taoiseach has described to-day. Possibly they were, but I should like to know if the British Government asked for any concessions, for example, with regard to defence? I want these things made clear and I think it is important that the Taoiseach should reply to them. To ask the British Government for an agreement on the basis of economic integration with them is a pretty big thing and, if we asked that, the British Government were bound to ask for something in return. If the Taoiseach clears up that matter and answers the two particular questions I have asked, I believe the mind of the country will be clearer and, indeed, will be eased. In any case, even if the British Government had agreed to economic integration between the two countries, especially as far as agriculture is concerned, agricultural prices, subsidies and price supports, I do not believe that sort of agreement would solve our problems here.
Maybe it is just as well, as the Taoiseach has said in his speech, that this suggestion should have been put forward to the British Government so that there will be a conclusion to it, and so that we shall not have that sort of opinion travelling around the country year after year after year. Economic integration has not solved the problem for Northern Ireland or for the Scottish Highlands. While it might solve other problems here, there is no guarantee whatever that economic integration would solve the problems of Irish farmers and Irish industrialists because in Northern Ireland and the Scottish Highlands, there is still a high incidence of emigration and unemployment.
It can be fairly said, and it is obvious from the type of speech the Taoiseach made to-day, that this final Agreement has been an anti-climax. Negotiations were started away back in July and in about February, I think, the Taoiseach announced at Dublin Airport that the talks had broken down and that the type of agreement originally sought could not be arranged. Of course, in a matter of two or three weeks the Agreement which is before us today was signed by the representatives of both Governments. In any case, it has been a damp squib. There does not seem to be any particular advantage in this Agreement to expand or enrich the Irish economy.
Article I is good in that it gives this advantage to the Irish farmer who wants to sell his 14-day attested cattle but, as has been pointed out by Deputy Dillon, that will not mean a great deal in money values in the first year. It will probably amount to a few hundred thousand pounds. In the second, third and subsequent years it probably will mean a pretty fair amount to the Irish farmer and, incidentally, to the Irish economy. It can be lauded if it does nothing else but stimulate greater interest in the eradication of bovine T.B. in this country. This ought to be said: I do not believe that many Irish farmers appreciate the harm they are doing to the economy of the country in the "fiddling" they do in connection with the Government scheme and private schemes for the eradication of bovine tuberculosis.
I often wonder if we have been serious about the eradication of bovine tuberculosis in the past few years. This country depends to a very large extent on exports of cattle. The British have eradicated bovine T.B. from the whole of their country and they will not tolerate a lackadaisical attitude on the part of a country like this which supplies them with so many cattle. If Article I. does little to put money in the pockets of the Irish farmers, at least it will stimulate greater interest and give greater financial encouragement to farmers to tackle the job seriously.
Subsections (i) and (ii) of Article I. do not seem to be very important. They are important merely in that they repeat some of the clauses embodied in the 1948 Agreement. Article II. is also a repetition of something that was in the previous Agreements.
I am surprised that the Taoiseach glossed over Article III. so quickly. To be quite honest, I thought the greater part of the Taoiseach's speech would have been on Article III. Article III. provides for an immediate review of protective duties and other restrictions imposed by us on United Kingdom manufactured goods, in accordance with Article 8 of the Trade Agreement of 1938. The Taoiseach said, of course, that that clause was there in 1938. The war came and nobody bothered about it. It was repeated in 1948 and nothing happened in the past 12 years. It was not taken seriously. Everybody knows that it was not taken seriously. Now and again the British asked for a review of a tariff and the mumbo jumbo of reviewing a tariff was gone through but in most cases nothing happened. I want to ask the Taoiseach what is the significance of repeating it with such emphasis in this Agreement of 1960? Are we to take it, inasmuch as it is repeated with such emphasis, that it will be carried out in a more drastic fashion than heretofore?
The Taoiseach said that the war prevented review for one period and in the second period, after the 1948 Agreement, nothing much happened in review but are we to take it now and is it to be taken by the industrialists and the manufacturers of this country that it will be taken seriously, that there will be an immediate review and that there is a grave possibility or a certainty that tariffs imposed for the protection of Irish industry are to be gradually reduced? If that is the situation, it should have been emphasised by the Taoiseach today because in the past 20 years a great number of industries and manufacturing concerns in this country have been proceeding in blissful ignorance, on the assumption that these tariffs will be there for all time. I am not saying that that is the Taoiseach's fault. I am not saying that it is the fault of any former Minister for Industry and Commerce or of any Government.
I suppose we have been at fault in allowing these tariffs to continue but the situation seems to be developing in Europe that tariffs are being gradually reduced. As far as the Common Market countries are concerned, the first reduction commenced last July and there is to be a second reduction in July of this year. As far as the European Free Trade Association is concerned, the first reduction in tariffs is to commence in July.
Does Irish industry appreciate that, in accordance with what is, I suppose, a justifiable demand of the Government of the United Kingdom, our tariffs will be reduced gradually and that the reduction is to commence in the immediate future? If that is the position, if there is to be a drastic reduction of tariffs the country will have to face up to it and will have to face up to another problem of unemployment.
I am not trying to forecast an immediate period of unemployment consequent upon the review of tariffs. I know the Government are concerned about that and must have been concerned about it as it was included in this Trade Agreement and emphasised so strongly. I mention it merely because I believe that if what I have said is substantially correct the Taoiseach should have emphasised it more here today, both for those who control industries and especially for those employed in the industries of this country.
The Taoiseach, of course, did refer to it in recent times but again I do not think he stressed it sufficiently, if such is going to be the case. In his recent article in the Financial Times Survey on Ireland he did suggest that there was to be a review of our protectionist policy. If there is to be a review of our protectionist policy and if, in accordance with the terms of this new Agreement, that review will take place immediately, the industrialists of this country should be up and doing and should be prepared to meet the undoubted challenge that will be there when the tariffs are reduced and should provide for a time when the tariffs are no longer in existence.
I know that the original idea behind the imposition of tariffs was to provide a temporary protection for Irish industry but that temporary protection has continued for well over a quarter of a century in some cases. Therefore, a reduction of tariffs will mean that the Irish industrialist will have to regear his organisation in order to be able to compete with products coming here from Britain and with goods that may be sold in this country far cheaper than the price at which the Irish manufacturer is selling them at the present time.
Article IV of the Agreement seems to suggest that there will be no new tariffs except in special circumstances. Again, the Taoiseach should elaborate on that Article. The usual thing in this country has been for anybody who wants to start a factory, no matter how small or how big, to ask: "Will I get a protective duty?", and in many cases the protective duty is imposed. Again, the Taoiseach should make it clear now that such protection may be given in future only in exceptional circumstances in view of the changes that have taken place in European trading in the last three or four years and the changes which the Taoiseach said will probably take place in future, all of which would seem to suggest that a reduction of tariffs in European countries generally must come, not alone in respect of Common Market and Outer Seven countries but in respect of the other countries as well.
There is one impression I got from this Agreement and certainly from the Taoiseach. It seems to me that the significance of this Agreement is the fact that we in this country have to go it on our own, so to speak. We will not get any easy market for our agricultural or other produce in Britain or any other country. Unless we can compete, we can neither expand our external trade nor can we expand our economy. We must depend on our own ability to provide a solution for these problems. It is true there is still a home market for manufactured products, a very limited market. Our export market for industrial goods can certainly be improved. We have the resources and the ability to build up our industries. Our workers are particularly skilled and adaptable.
It is agreed that in agriculture our greatest prospect lies and if we are to expand our output and our trade, the unit costs of production must be reduced. I was impressed when I read this booklet recently published and issued by the Minister for Finance, Economic Statistics, to find that our tourist industry was worth nearly as much as the cattle industry. We have difficulty with the cattle industry, particularly at present in the eradication of bovine T.B. and as regards the price we can obtain for our cattle in Britain. Tourism can be developed at a greater rate than the cattle trade and will provide many more millions of pounds for our people. In respect of the Government's Programme for Economic Expansion, while we are prepared to gamble—and it is a gamble —£6,000,000 or £7,000,000 on the transatlantic air services, we propose to provide this year £500,000 by way of capital expenditure for the tourist industry. That seems wrong, in view of the fact that the tourist industry was worth something like £35,000,000 to us last year.
Many people argue that we have ideal conditions for the cattle industry. Our grass is the best in the world and we have a tradition of rearing cattle. However, our circumstances are much more favourable for tourism. We have the amenities and our resorts are capable of improvement and development. We are told we have the disposition to treat our visitors well and to look after them properly. Having employment in mind, I suggest that if we are to make this country attractive to tourists, we should and could develop our roads in a far better way than we are doing.
That is not relevant.
It may not be. I merely mention it incidentally, as a means of making the country a little more attractive for the tourist, but I do not want to widen the debate. It is obvious from the speech of the Taoiseach that the Agreement is not a good one. I appreciate that he and his colleagues went off to make the best bargain they could. It takes two to make a bargain, but the British have difficulties, in view of the fact that they are members of another group. They did have regard to the special position of Ireland and were prepared to recognise that in the Agreement, but by and large, the Agreement will not do much for our economy in the immediate future. It will not put more money into the pockets of the Irish farmers, and it will certainly not create new employment. Therefore, this Agreement of 1960 means that we the Irish people will have to make our own effort to produce agricultural and manufactured goods in such a way and at such cost that we can compete in England and elsewhere. It is only by our own efforts that we can expand our economy in order to stem emigration, to curb unemployment and to improve our standard of living.
I remember the discussions which took place in this House on previous Agreements, dating back as far as the Agreement of 1938. I remember particularly the discussion which took place on the Agreement of 1948 because I took part in the negotiations. In view of this debate, I was refreshing my memory by reading some of the Official Report of that discussion and I was glad to find that in that discussion I had taken the same line as has been taken in this debate. I was endeavouring to find out what advantages we had secured and what we were asked to give on the other side. Having been one of a number of Ministers who had been in Britain a short time prior to 1948—in fact, 1947—I had had some experience of the problems and difficulties that confront those who have that task on hand, and who want to do the job of work in the best possible way, in the interests of their country.
Very often in discussing the question of trade and the advantages to be secured, some people seem to forget that no matter how much you plead, no matter what arguments you adduce, no matter how much you emphasise your point, in making suggestions as to how trade can be improved, in a double-edged way you have the other people to contend with, people who have their own slant, their own way of looking at things, and their own reasons for making certain decisions and for pursuing certain lines.
One thing about agreements, whether they are in a very special way advantageous from the point of view of your own country or otherwise— and it is good for everyone in this House and outside to recognise it—is that those who have the responsibility of negotiating these agreements from time to time must, in all conscience, of course, put their best into them and they must, of course, accept the outcome.
There was a tendency here in the course of this discussion—it was a very simple and harmless one, I admit —to lay emphasis again on this question of the position of our trade with Britain in relation to cattle over the years. I knew very well this matter would arise and, because I knew it would arise, I decided to have compiled a complete history of this business, since the first occasion on which the British Government intervened for the purpose of stimulating their own agricultural production. Knowing, as I say, that this matter would probably come up here, as it has on numerous occasions, I thought I would place upon the records of this House a factual statement which cannot be controverted in order that interested persons in future could have a look at it.
In 1934, the British Government introduced a subsidy of 5/- per live cwt. for fat cattle, applicable to British home-bred fat cattle and Irish store cattle fattened for at least three months in Britain. The strange thing about it, if I may make this comment by way of reply to an interjection by Deputy Sweetman, is that they did that at the time when the Economic War was in progress.
In 1937, the subsidy was altered to 7/6 per live cwt., quality grade, and 5/- per live cwt., ordinary grade, for British home-bred fat cattle and to 5/- per live cwt., quality grade, and 2/6 per live cwt., ordinary grade, for Irish store cattle fattened for at least three months in Britain. That was the first occasion on which this differential was introduced. After the British Ministry of Food became the purchaser of all fat cattle in 1940, British home-bred fat cattle and Irish store cattle fattened for at least three months in Britain were purchased on a live weight basis, prices for the latter being fixed at 2/6 per live cwt. below the prices for the former, thereby continuing the previous subsidy margin.
In 1941, when feed and meat supply problems were becoming acute, the minimum fattening period for Irish store cattle exported to Britain in order to qualify for the above price link was reduced from three months to two months. In 1942, the price differential between British home-bred fat cattle and Irish store cattle fattened in Britain was increased to 5/- per live cwt., on the plea of an increase in British agricultural wages. The differential was further increased in 1944 when a quality premium of 2/6 per live cwt, introduced for special grade cattle was applied to British home-bred fat cattle only.
No pre-war British subsidy was paid on Irish fat cattle exported to Britain for immediate slaughter. When the British Ministry of Food became the purchaser of all fat cattle early in 1940, the prices for Irish fat cattle exported to Britain for immediate slaughter were fixed on a dead weight basis at a level which excluded the subsidy payable on Irish store cattle fattened in Britain. From mid-1940 onwards, the prices paid by the British Ministry of Food for British home-bred fat cattle and Irish store cattle fattened in Britain were increased from time to time, without any corresponding increases in the prices paid for Irish fat cattle exported for immediate slaughter. By 1947, there was a difference of up to 6½d. per lb. dead weight in favour of Irish store cattle fattened in Britain as compared with Irish fat cattle exported for immediate slaughter.
Arising out of Ministerial negotiations, to which I have already referred, which took place with Britain towards the end of 1947, the quality premium of 2/6d. per live cwt. granted since 1944 for special grade British home-bred fat cattle was applied to Irish store cattle fattened for at least two months in Britain; and the prices for Irish fat cattle exported to Britain for immediate slaughter were also increased by up to 5d. per lb. dead weight. This increase was to be reduced by up to 1d. per lb. from March, 1948, unless agreement for higher prices should be reached before then. The reductions due in March, 1948, in the prices for fat cattle exported to Britain for immediate slaughter were, however, deferred pending the outcome of the negotiations that led to the 1948 Agreement.
The 1948 Trade Agreement set out in the Annex the arrangements which would govern, during the period 1st July, 1948, to 30th June, 1952, the export of specified Irish agricultural products to Britain and the Six Counties, and the Annex provided— and this is one of the matters on which we had some discussion in this House at the time because I felt it was inserted here for a purpose— regarding cattle:—
(6) The Government of the United Kingdom undertake that they will not introduce any excessive increase in the existing difference of 5/- per live cwt. between the prices paid by them for cattle bred in the United Kingdom and those paid for cattle from Ireland fattened for a minimum of two months in the United Kingdom.
(7) The Government of the United Kingdom undertake to arrange to pay prices for fat cattle imported from Ireland equivalent to those paid for store cattle bred in Ireland after a minimum of two months fattening in the United Kingdom subject to appropriate adjustment in respect of marketing costs.
There was the advantage secured in the 1948 Agreement which dealt with the position that existed in relation to the temporary arrangement arrived at a year or so before by reducing the differential of 6½d. per lb. to 1½d. per lb. It provided that that differential of 1½d. in relation to fat cattle exported for slaughter in Britain should disappear on that understanding and the British inserted the conditions. Although Deputy Dillon seems to think conditions do not mean anything—I admit that, in this case, use was not made of the condition which I have just read out—he admitted that some time later some British official raised that question because this condition provided him and them with the opportunity to do so.
There was also further provision, and this was inserted by Britain too, namely, that the Annex to the 1948 Agreement also provided that at least 75 per cent. of the total numbers of Irish store and fat cattle exported to Britain were to be store cattle and that Ireland's export of live cattle to other countries were to be limited to 10 per cent. of the total Irish cattle exports to all countries.
I am citing these provisions and setting them out only because I thought then, as I think yet and know now, that it is a foolish thing to ballyhoo too much in regard to a concession. It is a concession, we admit, but it does not at all mean what sometimes in our enthusiasm we can blow it up to be.
I say, then, that, while that undertaking on the part of the British to take a stated limited percentage of our cattle as fats and by doing so, remove the differential then existing of around 1½d. per lb. was a concession, it was limited by them and protected by them by the two stipulations to which I refer. I admit they did not resort to the powers that No. (6) gave them, but, at the same time, the British saw to it that these conditions were there because it has always been their aim in order to suit their own agricultural economy to divert the major export of our cattle as stores.
Following discussions between British and Irish officials, an Exchange of Notes amending the 1948 Trade Agreement was signed by the Irish Ambassador in London and the British Minister of Food in June, 1953 —published No. 4 in the Treaty Series 1953. It contained a new Annex substituted for the 1948 Trade Agreement Annex. The new Annex (1953) provided as follows regarding cattle prices:
4. The Government of the United Kingdom undertake that the difference between the prices paid by them for fat cattle bred in the United Kingdom and those paid for cattle bred in Ireland and fattened for a minimum of two months in the United Kingdom shall not exceed 4/6d. per live cwt.
5. (a) The Government of the United Kingdom undertake to pay prices for fat cattle imported from Ireland equivalent to those paid for cattle bred in Ireland and fattened for at least two months in the United Kingdom subject to appropriate adjustment in respect of marketing costs. The seasonal schedule of prices for fat cattle imported from Ireland shall be agreed annually in consultation between representatives of both Governments.
In that new Annex, No. (6) of the Trade Agreement, 1948, to which Deputy Dillon has referred was omitted. The new Annex of 1953 also provided that Ireland's exports of live cattle and carcase beef to countries other than Britain were to be limited to 10 per cent. of the total exports of live cattle and carcase beef from Ireland, and that 25 per cent. of the exports of Irish live cattle to countries other than Britain should be second class cattle. As regards the British Government's undertaking in 1948 not to introduce "any excessive increase" in the 5/- differential, it may be mentioned that the differential did actually remain at 5/- until it was reduced to 4/6d. in 1953.
Provision was made in the 1953 Exchange of Notes for joint consideration by the British and Irish Governments of the arrangements to apply on the purchase of any product being handed back by the British Government to private traders. Prior to the decontrol of meat and livestock by the British Government in mid-1954, Ministerial discussions took place in March of that year with Britain. The British authorities refused to make any special arrangements for Irish fat cattle exported to Britain for immediate slaughter following decontrol. In the case of store cattle, however, the British agreed that Irish store cattle fattened in Britain or the Six Counties for a minimum period of two months would qualify under the British fatstock guarantee scheme for any collective guarantee payment in excess of the differential of 4/6d. per live cwt. fixed in 1953.
Following discussions between British and Irish officials in 1955, the British authorities increased the qualifying fattening period for Irish store cattle in Britain and the Six Counties, as from the end of March, 1956, from two months to three months but reduced from 4/6d. per live cwt. to 3/6d. per live cwt. the differential in respect of such cattle as compared with British home-bred fat cattle. The British authorities also declared, in a letter from the British Minister of Agriculture and Food to the Irish Ambassador, that no further changes in these arrangements were visualised for a period of at least three years from the end of March, 1956, unless there should be a substantial alteration in conditions such as a fundamental change in the British system of fatstock guarantees.
When the British, as is indicated there, decided to revert to the three months waiting period as against two months, they reduced the differential from 4/6, as is rightly claimed, to 3/6. I do not blame those who were responsible at the time for being obliged to concede the longer waiting period, but I am sure that they, just as I, would feel that the shorter waiting period, even on the basis of a full 6d. differential, would be more advantageous to this country than one of three months with a differential of 3/6d.
As I said at the outset, there were British interests and British policy and the British Minister responsible in consultation with his own officials and farming interests in Britain made this change. There was no means by which any Minister then responsible could secure a reversal of that intention. That is why I say it is all very well to state that this case was pleaded incompetently or make some accusation similar to that. It does not matter how earnestly or how effectively you plead in such matters if the decision is to make a change in their own interests. So long as they have satisfied themselves that the change will be in their own interests your pleadings will go for nought.
The new Supplementary Trade Agreement of 1960 gives a formal contractual status to the arrangements under which the prices for Irish store cattle fattened in Britain are linked to the prices for British home-bred fat cattle. That is a useful contribution in itself. Under the new Agreement the differential of 3/6 per live cwt. between the guaranteed prices for British home-bred fat cattle and those for Irish store cattle fattened for a minimum of three months in Britain has now been abolished in the case of Irish attested or accredited cattle.
I am not boasting about it. I think Deputy Dillon has admitted and everybody else will admit that that is a valuable consideration. It may not be valuable in a financial sense immediately, as he quite rightly says, but it is one that will be of growing importance to us, we hope. While it is now only, perhaps, a rather nominal matter, we can look forward to a time in the not too far distant future when it can be worth a considerable amount to us. On the understanding that we are going ahead with our policy of attestation or accrediting of our livestock, it does give us Trade Agreement status for all store cattle exported from this country and fattened in Britain for a period of three months. It gives for the first time parity of price with British home-breds. While I do not want to over-emphasise the importance of that, it is of considerable value. This is the first time that parity of price has been attained for any of our cattle entering Britain.
As regards 14-day tested store cattle exported to Britain and fattened for a minimum of three months, the new Agreement confirms that linking of the price of such cattle with the guaranteed prices for British home-bred fat cattle at the differential of 3/6 per live cwt. That arrangement is on a Trade Agreement basis up to the 30th September, 1965.
I think it was Deputy Dillon who asked what was the difference between putting these understandings in the form of a Trade Agreement and that of an exchange of letters. Of course, Deputy Dillon must know that it is substantially different in the sense that once an Agreement of that nature is made, whether it concerns attested livestock or once-tested cattle or fat sheep, lambs or store sheep, the fact that the arrangements are made part and parcel of a Trade Agreement gives them a better and more secure status than they would enjoy on the basis of an ordinary exchange of letters which, of course, could be altered in a very short time.
There seems to be some misunderstanding at least with some people who discussed this matter with me as to what was meant by Article II of the Agreement to which Deputies opposite referred. Our position, as I understand it, is that the items of agricultural produce in respect of which we had preferential contractual obligations or commitments with Britain were set out in Schedule I to the 1938 Agreement. In relation to quite a lot of other agricultural exports we had the right of free entry but if the British Government decided to change its policy, as it has done in regard to bacon, for any domestic or other reason, they were free to make that change by extending, either in whole or in part, that concession to other countries or to other Governments. They did, in fact, do that in relation to bacon with the Danes and Article II here is of some importance.
It is not very important in the sense that it provides only for consultation. Even after the consultation, even after full discussion and all the efforts that can be made to show the effects or injustice of any particular change have been resorted to, it does not follow that the other parties to this Agreement and in relation especially to Article II are obliged to listen to your pleadings or take heed of them. I would regard it as being of considerable value, in the sense that it does at least provide the means by which a discussion can take place and an opportunity for examining the whole effects of a particular proposal before any new departure is decided upon.
Deputy Dillon mentioned the fact that in regard to some matters, perhaps many matters, he would prefer to have the sort of understanding which sometimes we can make as individuals, as between man and man; the understanding that we shall behave decently towards one another and that we shall not take any action which will be prejudicial to the interests of the other party, and so on. Now I do not disagree entirely with that sort of view, but at the same time, in matters affecting trade, or issues that arise between countries, you cannot always have it down in black and white in a way that will secure you against every pitfall. I think it is better to have a provision such as this where there is an obligation upon the contracting parties to have discussions such as those provided for here before any change is made.
I suppose the same comment would apply in the case of Article V. It is true, as has been suggested, that when problems arise as between the two countries and the two Governments, it is a normal thing that discussions should take place. It is not difficult to arrange such discussions but the Article referred to here is intended for a different kind of problem. While again it is not one to which you can attach tremendous importance, I think it is a useful provision to have because it enables a type of discussion to take place, a discussion that would probably cover a much wider field than a discussion which would arise as a result of the appearance of some trading problem just on the spur of the moment and in respect of which you might make contact with the British and say: "We want to have a talk with you on this matter". Therefore, I think Article V is a useful one.
There is nothing much further I wish to say on this matter but I was anxious, for the purpose of the records of the House, to set out the whole history of these agreements, especially for any person who had not an opportunity of being in intimate contact with this subject. It has been a very tortuous matter and if there are any Deputies who wish to refer in the future to the details, I hope they will always find them here. As the Taoiseach outlined in his opening remarks, we had ideas and whether we thought these ideas and proposals were acceptable or not, I for one—and every one of my colleagues—felt that this was an occasion on which the case which he has outlined should be made by us. We may all have had our own notions as to whether or not they were likely to be acceptable at the present time to the British, or whether they would be acceptable in whole or in part, or whether they would be rejected out of hand. Anyhow, that did not deter us from putting them forward and in the course of time, in the changing circumstances of the world around us, there is no reason in the future why the case cannot be raised and discussed again. As the Taoiseach pointed out, and as I have tried to indicate, however attractive these problems may appear to be, however they may contain advantageous provisions for the other person as well as for those who spoke for Irish interests, the vital thing is whether or not the other people engaged in these discussions will approach them in that spirit or in that sense.
This is an Agreement which nobody could claim is more than a modest concession. It provides for a number of modest concessions, important concessions, and there is one especially in relation to attested stock, which, in my opinion, will prove to be a very useful and important concession in the future. Perhaps if both Governments had sat down to this business on the other basis, we might have been able to arrive at something more beneficial to them and to ourselves but that was not possible and in the circumstances this was the best we were able to secure.
I think it would be ungracious not to admit that the Agreement which we are discussing does contain certain advantages, particularly in regard to attested or accredited cattle. Nevertheless, I for one, with, I hope, an independent mind, must express disappointment with the overall result. From what I could gather from people with whom I discussed the Anglo-Irish Trade Agreement, the feeling generally is one of disappointment that a lot more was not achieved. Perhaps this feeling may have been engendered by the fact that the Taoiseach himself and two of his Ministers went to London personally to conduct the negotiations at the outset. The feeling was abroad that the head of the Irish Government, and two of his chief lieutenants, would not have gone to London unless they were pretty sure of bringing back something worthwhile and certainly some radical settlement that would give hope and encouragement for the future expansion of trade between the two countries.
Perhaps the Irish people had no right to jump to such conclusions but that they did so hope is an undoubted fact and the fact that these hopes, to a large extent, were dashed is only too true also. As the Leader of the Opposition pointed out, and the Minister for Agriculture confirmed in his contribution, the advantages which this country secured through the Agreements of 1938 and 1948 in relation to the export of agricultural produce to Great Britain have been largely whittled away by the action of successive British Governments since the war. That is an undeniable fact. It is something over which we had no control. Legally, I presume Britain is entitled to do that but certainly, at least in my view, it was a departure morally from the spirit of the Agreements of 1938 and 1948. The only possible way of counteracting that lessening of the advantages of the 1938 and 1948 Agreements was to do as has been suggested by several farmers' organisations, by the report of the Marketing of Agricultural Produce Committee and incidentally by the Leader of the Opposition and the Fine Gael Party —to give them their due—and that was to secure to Irish farmers the benefits of the subsidies which the British Government were prepared to pay and, in fact, were paying to their own farmers as a matter of policy over the past 12 or 15 years.
When the Taoiseach arrived back in Dublin, if my memory serves me correctly, he made a statement to the effect that they had not secured acceptance of the proposals which they had made to the British Government and that, in fact, he did not think they would get them accepted. Nothing further can be done about that I presume, except to ask the Taoiseach and Ministers to realise that there is this general disappointment in the country at the outcome of the agreement and particularly from the farmers' viewpoint, that it was not more beneficial. My views in that regard have been more adequately and certainly more vociferously expressed by the various organisations which represent farmers and which have been giving their views on the outcome of the trade negotiations in recent weeks.
To some extent, of course, the disappointment has been tempered by the increased prices and other benefits which almost coincidentally with the announcement of the terms of the trade agreement were announced as about to be paid to the farming community. Nevertheless, the general view of farmers is that taking the Anglo-Irish Agreement and the new agricultural price increases together they have come off the worse of the bargain.
I was surprised to hear the Taoiseach say that their decision to put forward the suggestion for the integration or extension to the Irish farmers of the agricultural prices paid to British farmers was influenced mainly by the reports of the Agricultural Produce Marketing Committee. I think it was Deputy Corish who made the point that a decision of that kind involving a very radical change in our trade relationship with Britain should have emanated from the Government themselves rather from any observations of any committee however independent or competent they might be for their own particular task.
The Taoiseach mentioned, without giving details, that the British representatives after studying the memorandum which he sent to them following his visit to London decided that the proposals contained in the memorandum were not practicable. He did not elaborate on the non-practicability of the suggestions or the turning down of the suggestions from the point of view of the British side but I think the House and the country generally would have been very interested to learn on what grounds the British were not prepared to consider this radical proposal. The Taoiseach hinted that somewhere in the background the Northern Ireland M.P.s had some Machiavellian influence on the discussion. I do not know what factual basis the Taoiseach had for that remark or whether he had definite evidence that, in fact, such influence was brought to bear on the British negotiators. If he has evidence, I think he should make it known to the House. It is wrong to surmise that the Six County representatives have in some way or other been carrying on in such a Machiavellian fashion without at least giving us facts to substantiate the statement.
In Limerick recently I attended a lecture by a member of the British Milk Board. It was extremely interesting but one statement which the lecturer made—and he appeared to know his job—caused quite an amount of comment amongst the audience, mainly creamery managers. He spoke of the policy of the British Government over the years with regard to the purchase of their requirements of food. Britain, as I think it is generally known, has been producing about 50 per cent. of her requirements of food. She subsidies her own farmers very heavily, to the tune of something like £400,000,000 per annum, I think, to produce that 50 per cent. She throws open her ports to the countries of the world and allows them to fight over the remainder of the bone, amounting to another 50 per cent. and we in common with other countries like New Zealand, Sweden, Holland and others have been fighting for that 50 per cent. for the past 100 years or more. Concomitant with that fight, we have had to put up with the type of trade agreements which successive Governments produced, in other words the encouragement of exports of store cattle and the discouragement of the exports of, say, eggs or something that would suit our small-farm type of economy.
This gentleman described the British market as the most wide open market in the world and almost the most unremunerative. I think that fact is borne out very clearly to all of us inside and outside the House and particularly to the farming community over the years.
In my view this part that I describe as the agricultural part of the Trade Agreement is definitely—it has been as I admitted at the outset of benefit to our farmers to some extent—of particular benefit to Great Britain. That benefit on the British side is very clearly evident in the three Agreements which I have taken some trouble to read in recent days. So much for the agricultural side of the Agreement.
On the industrial side in which I am to a large extent more interested and possibly more competent to discuss, there are a number of questions and aspects which the Taoiseach did not elaborate at least to my satisfaction. I put down two Questions for answer in the House today in regard to duty-free imports into Great Britain and the effect the recent anglo-Irish Trade Agreement had on these imports of Irish industrial goods into Britain. The reply I got was that this would be dealt with in today's discussion. In spite of the Taoiseach's assurances that this country has the right of duty-free entry into Britain for all its industrial products I am not satisfied that such, in fact, is the case.
In the 1938 Agreement, subsection (1) of Article No. 1 reads as follows:
The Government of the United Kingdom undertake that goods grown, produced or manufactured in, and consigned from Éire, which, on the day on which this Agreement comes into force, are liable to duty under the Import Duties Act, 1932, or under Section 1 of the Ottawa Agreement Act, 1932, and also such goods which are on that day free of duty, shall enjoy entry free of customs duty into the United Kingdom. This paragraph does not apply to goods which, on the day on which this Agreement comes into force, are liable to duty both under the Import Duties Act, 1932, or the Ottawa Agreements Act, 1932, and under some other enactment.
I turn now to the 1948 Trade Agreement. Article 4, Section (2) reads as follows:—
Article 1 of the Trade Agreement of 1938 shall be read subject to the following:—
"The Government of Ireland contend that under Article 1 (1) of the Trade Agreement of 1938 the Government of the United Kingdom have undertaken to admit without quantitative restriction the goods to which the Article applies, which contention is not accepted by the Government of the United Kingdom: nevertheless and without prejudice to the respective views of the two Governments with regard to the interpretation of this Article the Government of the United Kingdom undertake to review forthwith and from time to time the quantitative restrictions imposed on the importation into the United Kingdom of goods grown, produced or manufactured in, and consigned from, Ireland ... with a view to facilitating so far as possible their importation from Ireland, and subject to the need to safeguard the external financial position of the United Kingdom and to achieve and maintain stable equilibrium in its balance of payments."
In the 1960 Agreement I can see no reference which clearly indicates that all Irish-manufactured goods can be exported to Great Britain free of duty. I may be wrong in my view, but nothing that I have seen has so far allayed my fear that there is, in fact, provision on the British side, if they so desire, to restrict quantitatively, or by means of a revenue levy, industrial exports from this country to Great Britain. I hope that the Taoiseach will allay my doubts on that point when he comes to reply.
To give a specific example, I should like to refer to exports of fabrics and clothes to Great Britain. As we all know, there is a substantial employment content in the clothing industry here. In my native city of Limerick between 700 and 800 men and women are employed in the clothing industry. They represent about 20 per cent. of the total numbers employed in manufacturing industries in Limerick. That gives some idea of the importance of this industry to the city of Limerick.
Under existing regulations, if a manufacturer wishes to export men's clothing to Great Britain in which there is man-made fibre—for example. artificial silk lining—he has to pay an import duty, or levy, on the value of the suit. If that restriction were removed I am satisfied there would be a substantial market in Great Britain for Irish clothing manufactured from the products of our Irish textile factories. Before the Minister for Industry and Commerce left for Great Britain I took it upon myself, on behalf of Limerick manufacturers, to urge on him to press that point in the negotiations. The Taoiseach has made no reference to that. Perhaps it is just one point in the many points discussed, but I think it is a very important one.
This type of industry is particularly suitable in our economy. It has a high employment content. Limerick is in a real sense an important centre in the clothing industry and any modification would inevitably mean increased employment in Limerick. Limerick has not been fortunate in new industries over the last 20 years. The clothing industry, if expanded, would mean greatly increased employment, and employment is badly needed. If no concession has been secured, I would urge on the Taoiseach that he should use his endeavours to have the position rectified forthwith. I cannot understand how such an import duty can be imposed if, as the Taoiseach says, we have the right of duty free import into the British market. Even if the artificial silk lining—the man-made fibre as it is designated—is made in Great Britain the British import duty still applies.
One notable feature of the three Agreements—the 1938, the 1948 and the 1960—has been the persistence with which the British negotiators have had written into the three Agreements their desire for a review of our industrial tariffs. That was written in first into Article 8 of the 1938 Agreement. A further reference was made in Article 6, subsection (1) of the Agreement of 1948, and in the 1958 Agreement a still further reference, and an even stronger one, was made to the necessity for an examination of our protective tariffs. Indeed, the Taoiseach went so far as to indicate quite clearly that something would have to be done about this, and fairly soon. I gather from that, that within a reasonable time, a priority list of tariffs will be drawn up with the idea of their being reduced.
I am merely expressing a personal view now, but I think the time has arrived when we will have to appreciate very clearly here, and in the country generally, what our ideas should be with regard to expansion of employment in industry. The Taoiseach has pointed out on more than one occasion that saturation point has been reached as far as the home market is concerned. If we are to expand industrial employment—I hold the view that the only hope of expanding employment here is through expanding industry—we shall have to be prepared to make certain sacrifices. By that, I mean that we shall have to be prepared to revise, very drastically, if necessary, our entire protective policy.
If we could be certain that our manufacturers are in a position to compete in the British market of 50,000,000 —and after 25 years of protection, the majority of them should be—then I think it would be good business to extend by the right of entry into that market at least a part of our small market of 3,000,000. If we have not courage and faith enough in ourselves —and when I said "we", I mean our industrialists and manufacturers—to go out and beat the British manufacturer in his own market of 50,000,000 consumers, many of them Irish, I think we are not worthy to stand on our own feet here.
The main chance—I would go as far as to say "the only chance"—for the future here, the only hope of raising employment within a reasonably short period is through industrial employment. To effect that, we must export, and, in my view, the logical place to export is Great Britain, only 50 or 60 miles away, with its enormous population, largely buyers of consumable goods. I am quite certain that, in saying that, I am interpreting to a large extent the views of the Taoiseach. However, the Taoiseach might not have the same temerity as I in saying that the time has come when we have to pull up our socks and pull down our tariffs.
In his speech, which ranged over a far wider field than I thought it would, the Taoiseach did mention alternative markets: the United States, Canada, the British West Indies, South America, the developing countries of Africa, the Middle East, the Far East and so on. I agree completely with him that these countries offer a tremendous chance to our exporters and manufacturers. But the more I think of these, the more I come back to the fact that, without going 10,000 miles away, we have here on our doorstep a market of 50,000,000 people. As I mentioned already, we should have sufficient intelligence and ability to get a fair slice of that market In saying that, I appreciate that these far-away markets can be very valuable, particularly in view of the fact, mentioned by the Taoiseach, of the amount of goodwill towards us amongst the people in those countries, especially in the developing ones. The present Agreement and all future Agreements should be so arranged that the effect of their outcome will be to encourage the present trade between the two countries, which is about £170,000,000 or £180,000,000 a year. If that could be increased, even by 15 per cent., it would be of great benefit to the British people but of far greater benefit to our small country.
I do not feel competent to talk on the question of the various trade groups forming in Europe at present. It is a very difficult position for this country. Quite frankly, I must say I have a great deal of sympathy with the Taoiseach and the Government in the position in which they find themselves. It is easy for the hurlers on the ditch to express an opinion that we should join the Common Market Six or the Outer Seven, that we should stay on our own or do something else. Only the Government of the day have the responsibility of making this decision, and up to now the best decision has been to make no decision.
Any decision we make must be coloured by the fact that, as the Taoiseach himself said, 90 per cent. of our European exports go to Great Britain. Any action we take must, of necessity, be taken in concert with Great Britain, unless she, of her own volition, takes some action obviously detrimental to our interests, in which case we may have to make a very vital and far-reaching decision in our own interest, a decision which may temporarily cause us a lot of heart-burning and difficulties. But, taking the long-term view and considering the ambitions and ideals we hold in this country, and for which so much has been sacrificed, we may possibly have to take that decision.
However, I hope that will not be necessary. I hope we shall be able to march in concert with Great Britain. I echo the Taoiseach's hope that the direction of that march will be inevitably a joining up with the Common Market. If we in this country, who have taken such an independent and sometimes very controversial line at the United Nations, could take the initiative in persuading Great Britain and some of the other countries at present outside the Common Market to join that organisation, we would be serving a very useful purpose not only in relation to the cause of our own country but to the cause of the world.
I should like to share the Taoiseach's regret at what seems to be the disappearance of O.E.E.C., particularly for the same reason as he expressed, that it was essentially a European organisation. The historical place for this country is in the comity of European nations. How this proposed new 20-nation association will work out, I do not know. I feel Europe will lose something that is essentially a part of its historic past if the United States and Canada come into the picture and if they are to be—as they will be, with their wealth, power and influence—the motivating force in this new organisation. I should rather see Europe organised, both politically and economically, as a third force outside the two gigantic consorts of nations of Russia, on the one hand, and the United States, on the other. There is a lot to be said for having Europe— the old, historic Europe with its wonderful record of Humanism, its Christian philosophy and so on—as a sort of buffer between these two other giants, largely, although to some extent differently, built up on materialistic lines. However, that is probably going a good distance away from the substance of the Anglo-Irish Trade Agreement.
In conclusion, I should like to say our economy in its present form, mainly dependent on agricultural exports and in particular, upon the export of livestock and, intermittently, butter to Great Britain, must continue to be vulnerable, particularly in regard to the vital question for us of balance of payments difficulties. Every Minister for Finance who has come into this House in different Governments over the past 10 or 15 years has had to face up to these recurring difficulties, mainly because of difficulties arising out of cattle exports or because we imported too many motor cars or some such reason.
In my view, the only possible way of offsetting these recurring primary difficulties in our economy is the expansion of industrial exports, exports that will use a very large content of Irish raw materials. If we concentrate on the export to Great Britain—and elsewhere in the world, if we can—of the type of article we are competent to manufacture here and if we succeed in expanding industry and industrial employment, we shall then be in the very happy position of being able to sell more of our agricultural produce to our own people.
We can at least control that. We have no control outside of that and over our agricultural exports to other countries. We must take the world market price. Sometimes that is good; sometimes it is bad. Inevitably, every now and then, it leads to difficulties in our balance of payments. But, as I say, this Agreement to a large extent flows—perhaps I should use the expression, trickles— from the Agreements of 1938 and 1948. The Minister for Agriculture, in more adequate terms than I could use, described it as a modest agreement. I do not think he was exaggerating.
I find myself in the peculiar position of having to agree with Deputy Russell. Let me hasten to add that it is only on one point. I would like to support him in his plea to the Government to do something about the anomalous situation which obtains at the moment with regard to the export of certain textiles to Great Britain. The situation in this regard is causing very great difficulty to some Irish firms who are making a really worth-while effort to build up a useful export trade in certain lines. The trade they are trying to establish would be very important to us if it were allowed to develop and at the same time, would not be of real significance to the U.K.
The situation is that if certain articles have any content of man-made fibres, or artificial silk, the entire article becomes liable to the appropriate duty. It does not matter how small or minute the content is, the whole article attracts the duty and, as Deputy Russell has pointed out, it is even more anomalous and more ridiculous because in most cases the man-made fibre or artificial silk has been originally imported from Great Britain and is doing nothing more than returning to its original home. That situation is ridiculous and I strongly urge the Government to take a serious view of it and to try to do something about it. Out of the whole range of our trade with Great Britain this is one thing that sticks out like a sore thumb as being particularly unfair.
If the Government or our Departmental officials put their minds to it, there should be no difficulty in devising some formula, or system of assurances, which would satisfy the U.K. authorities on this particular matter. There are two absurdities in the situation. The first is that, no matter how small the content of man-made fibre or artificial silk, the whole article attracts the duty and the second absurdity is that the commodity responsible came from Great Britain in the first instance. I feel the Government have a very good case to argue with the British authorities and I strongly urge them to do everything they can as soon as they can to get rid of this anomaly.
I would like to repeat that in my view the significance of this recent supplementary Trade Agreement is that it means that our trade arrangements with Britain, involving as they do the right of free entry to the British market for most of our products, have been confirmed in the circumstances of 1960. That means that in respect of 90 per cent. of our total European trade we have now all the advantages in respect of export business that we could hope to obtain by membership of the European Free Trade Association or from the original Free Trade Area proposals, if they had materialised, and we have these advantages without having to give up, under the provisions of any such agreement or arrangement, our power to protect our own industries in our home market.
The anxieties that were expressed here over the past couple of years, when the proposals for a European Free Trade area were being discussed, the fears that were felt that we would either have to surrender the prospect of unrestricted access to export markets for our products, or secure the continuance of that access only by beginning the process of dismantling our own tariffs, have now to that extent—to the extent of 90 per cent. of our trade—been removed.
Would the Taoiseach look at Article III in the context of what he is now saying?
That is the tariff review provision—I propose to do so. I said in a speech which I made on this subject some time ago that the British Trade Agreement is the keystone of our whole external trade agreement structure, and that it was only when our arrangements with Britain had been reviewed and confirmed in a new Agreement that we could, with the necessary freedom, proceed to enter into negotiations with the European Economic Community, or with other European countries, regarding our trade with them. It is, I think, of advantage to us that we can now proceed to enter into negotiations with the European Economic Community with our trade arrangements with Britain newly defined.
One does not know what the ultimate situation in Europe may be. It is likely that changes in that situation will occur before the 1st July. Certainly, there are tremendous pressures being exercised by European Free Trade Area countries to prevent the situation remaining unchanged by that date, and particularly to avoid what are assumed to be the consequences of the speeding up of the tariff dismantling proposals of the Community, and the counter suggestion that the European Free Trade Association should also speed up its process of tariff reductions. Whether these pressures will produce any results or not is uncertain, but it is clear that the moment is not just right for us to start any formal negotiations with the Commission of the European Community for the purpose of defining our future trade relations with the Community in view of the possibility—I would even go as far as saying the probability—that there will be substantial modifications of the whole situation in the comparatively early future.
But, if the position becomes stratified as it is, if we have to face that prospect for an indefinite time ahead, trade with Europe will be done, as far as we are concerned, under the authority of some agreement which we will make with the central authority of the European Economic Community. I think we can hope to make such an agreement, in consideration of our substantial purchases of the products of community countries and in the hope that they will be prepared to concede to us, in particular, access to their agricultural markets for the goods that we could export to those markets if facilities were given to us.
I said that the only real disadvantage I saw in this situation at the present time, from our point of view, was that industries in this country seeking export markets were, as of now, somewhat uncertain as to the terms upon which it may be possible for them to export to countries on the European mainland which are combined in these associations, that while that involves some disadvantage and might indeed retard some industrial project here for a time, it also has quite significant advantages for us and that, indeed, even if this position became stratified, even if these two trade associations continue to function as separate entities with no contact between them, it could be that in those circumstances there would be substantial inducements, because of the reaffirmation of our Trade Agreement with Great Britain, to firms in the European Economic Community to avail themselves of the opportunities which that agreement gives to factories in Ireland, by associating themselves with those factories. Indeed, it would be true to say that, having regard to our Trade Agreement with Britain, to the advantageous Agreements we have with Canada and the United States and the favourable terms upon which we can trade with many other countries in the world, there are opportunities available to us now, at this very time, which we must endeavour fully to exploit in the cause of our industrial development.
In the matter of agriculture, our position as far as the British market is concerned is now clear. We are, as it were, within the ambit of the British protective measures so far as store cattle and store sheep are concerned and in respect of other products—butter and bacon are the only two now of substantial significance— we have unrestricted access so far as quantity is concerned to that market on equal terms with other suppliers. But we know from past experience and the terms of the Trade Agreement that the possibility of continuing these trades, apart from the question of expanding them, must depend to some extent, and perhaps even to a very considerable extent, upon our ability to provide products of good quality, products that will be consistent in quality and regularly available, and must depend also upon our ability to get our production on to a competitive basis.
It may be that what constitutes a competitive basis is a matter of some dispute because many of our suppliers of those products to the British market are in one form or another subsidising their export trades but, as there is equality of access and assuming equality of conditions of access, we can continue to trade in these goods and hope to expand trade in them provided we can get our production on to as competitive a basis as possible and aim at the consistency of equality and the regularity of supply which all trade requires in order to develop.
I want to deal particularly with this question of the review of tariffs. I had announced some years ago, as Minister for Industry and Commerce, our intention to undertake a review of our tariffs for our own purposes. A number of these tariffs were imposed at very high rates in order to assist developing industries during their early formative years and we considered that it would be a good thing for the country and a good thing for the industries themselves if the need for protection at those rates was systematically examined. We did not go on with that review of tariffs on our own initiative at that time because this European Free Trade Area proposal emerged and it seemed obviously unwise to start any process of reducing our own tariffs when we might conceivably enter into an agreement to reduce them, starting from the point at which they then were, and so we delayed the review which we ourselves had in contemplation.
There is, therefore, no need to be disturbed by the prospect that a review is now going to take place in consequence of our obligations under our Trade Agreement with Great Britain. We were prepared to accept that obligation to review our tariffs on the basis set out in the Trade Agreements in 1938 and 1948 and there is no reason to be perturbed about the prospect or for any industry in this country to get excited about it because the priority list, which has not yet been drawn up, will almost certainly have at its top those industries which are engaged in the export business on a substantial scale and can therefore, on that account, be regarded as highly efficient or achieving that status.
But it will start now, anyhow, or in the near future?
Yes, certainly. There will be a meeting of officials in the early future at which the priority list will be drawn up. From then on the reviews will take place systematically. We will have, no doubt, to consider the machinery alterations which will be required here to ensure that our obligations under the Agreement will be fully and honourably discharged.
The reviewing body is the Industrial Development Authority—our Industrial Development Authority. Under the 1938 Agreement it was named as the Tariff Commission, which has since disappeared but, by agreement with the British, the Industrial Development Authority was substituted for the Tariff Commission and is accepted by them as the reviewing body. The Industrial Development Authority is at present very busy and it is quite obvious that some changes will be required to enable them to take on this activity in addition to those they are already doing.
May I say that one of the reasons I think the 1948 review was not proceeded with was that at that time there was a policy to transfer to the Industrial Development Authority a lot of the administrative work previously done by the Department of Industry and Commerce, particularly the issuing of import and export licences? In 1951, when I resumed office as Minister for Industry and Commerce, I discussed the position with the Industrial Development Authority. They told me that they were so fully occupied with these administrative duties that they had little time to do anything else, either tariff reviews under the Trade Agreement or the main industrial promotion activities which had been contemplated for them initially. But, as the matter had not been pursued by the British Authorities between 1948 and 1951 I felt there was no need as far as I was concerned to show any undue anxiety about the position.
Now, however, it can be assumed that these reviews will proceed, not merely because we have entered into this Agreement with the British to initiate the reviews but also because the European situation is so changed that the re-examination of our tariffs, which we would have undertaken on our own behalf some years ago, can now very well proceed and can be beneficial to the country and to the industries directly concerned.
In that connection I want to emphasise the importance of the new provision in this Article III. Undoubtedly, we were always perturbed about the possibility of finding ourselves in a situation, after some tariff review had been carried out, of having tariffs bound under the Agreement without any further power to alter them to meet the importation problems which frequently arise here because of our proximity to Great Britain, which is a great industrial producer and exporter. In circumstances where big firms in Britain or important industries there may find themselves with a surplus of stock—perhaps produced for some market that has become closed to them, perhaps to meet a fashion trend that has changed, perhaps just the ordinary end-of-season stock which most industries accumulate—they are tempted to dispose of them at cut prices in our market on a scale which could seriously upset our own industries.
We never had any great difficulty in dealing with that problem so long as we were free to change tariff rates freely by Government Order. We could increase the duty or impose a specific temporary duty or take some measure which effectively restricted the importation of the goods for a limited period. The problem which arose under the Trade Agreement was that once a tariff was reviewed and had become bound on account of that review, we lost that freedom of action. That has been the case up to now, but under this new Agreement the British have accepted the reasonableness of our contention that because of our circumstances we still require some freedom to take temporary action if there is a sudden influx of goods on a substantial scale. We will have power now to take that action without the consent of, or discussion with, the British for a period of six months, and power to act over a longer period——
Could we get this clear? There are six months during which the duty which you impose would operate. What happens after the six months?
Let me take some commodity. Supposing the existing duty upon spectacles was reviewed and bound at a rate which was determined by the Industrial Development Authority, in the ordinary way we would not have power to alter it once it had been reviewed. Whatever that rate of duty was it would remain and we could do nothing about it even if unexpectedly large importation occurred. Under this new agreement we have for a period of six months power to impose quantitative restrictions if necessary or to increase the duty or in some other way to check an unexpected inflow of imports as a temporary measure to protect our industry pending an examination of the situation.
If you disagree again you do not get another six months?
Ultimately we are back to our bound duty but these reviews will be conducted on this basis, that the Industrial Development Authority will be able to fix the tariff at the level which, while it will give British suppliers a reasonable opportunity of trading in our market, will maintain adequate protection for the Irish industry. I think it is to be assumed that the rates of duty will always continue to be at a level which will give reasonable protection to our own manufacturers.
However, that is not the whole picture because I want again to draw the attention of the House to what I said earlier to-day. We are now in the position that, with our negotiations with the British completed and the Agreement made, we are going at some time to start our discussions with the European Common Market and other European countries. We have said to these countries through this 20-Nation Trade Committee of which Mr. Luns is Chairman that we would be willing, in consideration of our being permitted to continue to trade in their countries, and to join in the benefits which these arrangements are expected to produce, and particularly if we get access on fair terms to these countries for our agricultural products, to enter into agreements with them which would involve our undertaking to reduce our protective tariffs to some extent and in a progressive way. We have said that to them. We do not know whether it will be possible to make agreements upon that basis but there is no other basis on which we can get agreement. The whole trend in the world now is towards agreements which involve tariff reductions and if we are going to obtain access to the markets of the Community for our industrial or agricultural products, we must be prepared to sit down with them and work out the tariff reductions we are prepared to concede to them in return for the advantages we expect them to give us.
We have argued that, in seeking any tariff reductions from us, regard should be had to the general economic conditions prevailing here. We have pointed out that in the Free Trade Area negotiations in Paris the Committee that was concerned with these negotiations had agreed in principle that we, with certain other countries, should not be required to accept the same programme of tariff dismantling that the other stronger countries were prepared to agree to. I have no reason whatever to think that there will be any disinclination on the part of these Governments and the negotiating bodies of these trade Associations to deal with us on that basis. In fact there have been many encouraging references to the problems of the five European countries which are not in either the Free Trade Association or the Common Market, particularly by the spokesmen of the Authorities of the European Economic Community.
Deputy Dillon referred to Mr. Dillon, who is no relation as far as I understand——
No.
——who has been acting as a special representative of the United States of America in relation to this trade situation in Europe and who is responsible, I think, to a considerable degree for the fact that the reorganisation, if that is the right term, of the O.E.E.C., is about to start. It is necessary to emphasise that in all these matters the United States is not playing the part of a disinterested broker seeking to get the parties in dispute together to work an agreement between themselves. The United States is quite clearly supporting the European Economic Community and rather remarkably went to the extent of publishing an indication of its approval of the proposals of the Commission of the Community to accelerate their tariff reduction process even before the Governments of the Community had themselves considered these proposals. We must assume the United States is supporting the proposals for the elimination of O.E.E.C., the proposal which will mean the replacement of the O.E.E.C. by a new, more diffuse, not exclusively European body, and to a large extent is the author of the proposals which have emerged in the report of the committee of four.
I do not know that I am doing anything more than saying what everybody else understands when I point out that the clear policy of the United States appears to be to force the consideration of all trade matters, particularly negotiations relating to tariffs, into the G.A.T.T. So far as one can interpret the Report of the Committee of four and the intentions of those who are behind that report, the aim is to create a body which will not be exclusively European, which will have no specific duty at all in relation to trade matters in pursuance of this general aim of putting all these matters into the G.A.T.T. There will be a meeting of G.A.T.T. some time later in this year at which a whole series of bilateral negotiations for tariff reductions are anticipated and it is that fact, together with the expectations that we shall no longer have available to us to fight our battle such a specialised European organisation as the O.E.E.C., which has led us to consider membership of G.A.T.T.
There are certain problems in that regard and certain questions which have yet to be answered. It is true that when the G.A.T.T. Agreement was drawn up, our position vis-a-vis Britain was recognised. In other words, in the G.A.T.T. Agreement is contemplated the continuation by us of the preferential rates of duty which we now allow to British products, even though the whole aim of G.A.T.T. was to eliminate discriminatory treatment of that kind between members. Whether that exemption is adequate enough to protect fully our position vis-a-vis Britain, I do not know. Clearly, the British Trade Agreement which is the keystone of the whole structure must be preserved, and we would not enter into any arrangement which would prevent us from meeting in full, the obligations which we have accepted under it.
In all this rather lively argumentation which is going on between the European Economic Community, the Free Trade Associations and the United States which involves a lot of coming and going of heads of Governments and of States, I am afraid nobody is giving much attention to the problems of the five European countries which are in neither the Community nor the Free Trade Association and that makes it all the more important for us to fight our own corner vigorously. We cannot, of course, get the arrangement that would be most suitable, but we can at least endeavour to secure—and I think we shall have a great deal of backing in our efforts to secure—that the arrangement will not be positively detrimental to us.
Deputy Corish rightly said that the conclusion he had drawn from my remarks and from the trend of events recently was that in the promotion of our economic development, we are strictly on our own. That is perfectly true. I have over and over again tried to emphasise that there is no "external" solution and that nobody will come in to help us to solve our problems. We have to solve our problems by ourselves. There is no real difficulty in that, provided we accept the basic principle that our methods of production must be made as efficient as those of any other country. I am certain we can achieve that.
There is a wide range of industries capable of being established here on a basis which will enable them to become as efficient as similar industries elsewhere. There are many categories of agricultural production in which, if we try, notwithstanding certain difficulties in our situation, we can devise techniques of production and methods of marketing which will give us an opportunity of meeting any competition forthcoming against us.
Deputy Haughey and Deputy Russell referred to a particular problem which we have had some discussions about, and I cannot disagree with their assertion that the present situation is absurd. By accident, in the definition of the British tariff applying to artificial silks and similar man-made fibres, it became possible for the British Revenue Commissioners to decide that when goods imported into Great Britain contained any quantity of artificial silk or nylon or similar man-made fibres in their composition the duty applied to the whole article. They modified that application of the duty in respect of one or two commodities.
There was a ruling by the British Commissioners that because the cloth that covers the loudspeaker opening on a wireless set was made of artificial silk, each set was liable to the duty on artificial silk. That has been changed but it still persists in regard to clothing. The result is that garments made here which contain even a thread of artificial silk become liable to the artificial silk duty to the whole value of the garment.
The absurdity arises in the fact that the duty is charged even if the thread is manufactured in England and imported from Britain by the manufacturer here. At first, there was a belief that the difficulties were technical and inherent in the operations of the British Revenue Commissioners, but I think we have reached a stage in the discussions where it is clear that the technical problems can be resolved. It now becomes a question of Board of Trade policy more than Revenue Commission administration. It is one of the special problems, which it is contemplated, will be discussed under Article V of the Agreement.
Deputy Russell read the Agreement in a way which he said caused doubts whether it provides free entry for our products. Article I of the Trade Agreement says:
The Government of the United Kingdom undertake that goods grown, produced or manufactured in, and consigned from Éire, which on the day this Agreement comes into force, are liable to duty under the Import Duties Act, 1932, or under Section I of the Ottawa Agreement Act, 1932, and also such goods which are on that day free of duty, shall enjoy entry free of customs duty into the United Kingdom.
There were certain exceptions to that Article which were, I thought, set out in one of the Schedules, but that does not appear to be so. They are goods which on the day on which the Agreement came into force were liable to duty both under the Import Duties Act, 1932, and the Ottawa Agreement Act, 1932, and under some other enactments. They were a very limited range of products and they were of no great concern to us. They were not precisely defined in the Agreement so far as I can see.
It can be said by and large in respect of the goods produced in this country that the right of tariff-free entry——
Tariff?
Tariff-free entry still continues. The matter of quantitative restrictions was raised, as Deputy Dillon will remember, in 1948, and in the Agreement of 1948, it was set out that:
The Government of Ireland contend that under Article 1 (1) of the Trade Agreement of 1938 the Government of the United Kingdom have undertaken to admit without quantitative restriction the goods to which the Article applies, which contention is not accepted by the Government of the United Kingdom;
That argument was not resolved in 1948 and it has not yet been resolved, but it is, I think, no longer of great practical interest. Having regard to the policy of the British Government and the whole trend of events in world trade, the likelihood of quantitative restrictions applying in any general way to goods entering Great Britain not now subject to quantitative restrictions is very remote. If there should be such a revolutionary change, not merely in the whole world situation but in the policy of the British Government, clearly the question of our trade relations would have to be reviewed again. It is so remote a contingency that we did not think it worth while pursuing the argument to a conclusion. I think it is better to leave it at that.
May I ask the Taoiseach a question? He may have dealt with it before I came in, but I was here for most of his speech. Is there any new procedure or new attitude towards the imposition of new tariffs?
So far as we are concerned?
Yes?
None whatever.
I thought there might have been some significance in the phrasing——
None whatever. There is still in the 1938 Agreement a free list. I do not want to go into the details. A list of goods was drawn up on which we could not put tariffs. They were goods in respect of which, at that time, we had not developed an industrial interest. Subsequently, during the War and in the years after the War, some of these goods were manufactured here and we began to develop an industrial interest in goods which were on the 1938 free list.
Various agreements were made which culminated in the Agreement of 1948 under which the British agreed that we could put tariffs upon goods on that list, subject to the limitation, I think, that not more than 40 per cent. of the value of the total import of these goods would be subject to import duty. Apart from our obligations in respect of that free list— and we have never, I think, reached the 40 per cent. which was envisaged in 1948—there is no limitation on our freedom to impose new tariffs, provided a preferential rate is determined in relation to British goods.
Deputy Corish referred to some suggestion that particular matters were discussed in London. He asked whether, at any stage of the negotiations which led to this Trade Agreement, there was any suggestion by a British Minister that any trade advantage of any kind would be available to us for some non-trade reason. Certainly, there was not the slightest suggestion of any association with British defensive measures or the provision of any defensive facilities or any wider political consideration of any kind.
We discussed the Trade Agreement with the Ministers of the British Government who were concerned with trade, primarily—the President of the Board of Trade and the Minister for Agriculture. It was with them that the effective talks were carried out at all stages. In the course of the negotiations, not even in the informal discussions that took place between and after the formal meetings of the conference, was there any suggestion of any idea being in the minds of the British Government other than an arrangement of trade advantages to whatever extent was possible in our circumstances.
Would it be true to say that political considerations would not rule out the Agreement on the suggestions that were initially made by the Government in July or September?
That is asking me to go a bit too far. I do not know for certain all the considerations which settled the attitude of the British Government to these proposals. In so far as they told us the reasons why they could not accept them they were the practical considerations of trade policy, both external and internal, to which I have already referred.
Question put and agreed to.
The Dáil adjourned at 8.15 p.m. until 3 p.m. on Wednesday, 27th April, 1960.