In discussing the question of Ireland's entry to the European Economic Community, we are discussing a momentous event in the history of this nation; but, so momentous is it that it appears to me some people have allowed their wills and their imaginations to become paralysed by the extent of the possible change involved and, having viewed the possibility of the loss and danger involved in it, put their heads in the sand and said: "No; do not change; let us stay the way we are." Even if we could do this, I think it would be a poor reflection on the people of this country were they to adopt such an attitude.
In fact, this course is not open to us. It seems to me that in a debate such as this, we must first of all, be clear in our minds as to what is involved for us, what choice is open to us and where we stand in this movement that is going on. The principal objections that are being made to joining the European Economic Community could, I think, be largely put under three headings— economic, political and cultural. I shall deal with the economic side last because I think it will take more time than the others.
On the political level, I should like to ask those who are objecting on this ground or dragging their feet—and this might be a more accurate description of people in this House rather than outside it—do they believe that from this tremendous development taking place in Europe, one that has been sought for many a long year, through many a war and through many a famine, we should stand aside? Are we or are we not a part of Europe? Are our traditions, our beliefs, the things which we hold sacred, not a part of the European heritage and have we not contributed a great deal to that European heritage? Is it not ours to a great extent in the sense that we have contributed to it? Is it not ours to an even greater extent because of the fact that these are our traditions? This is where we come from. We are European and can we afford to stand aside while Europe is organising itself to ensure that the values, which are known as European values, the heritage which is certainly that of Europe—the belief in democracy, the belief in the right of the individual— these values which have come from Europe and have been developed in Europe, are preserved. These values are in danger of being swamped in this world today and this is all the more reason, therefore, why Europe must organise itself and ensure the preservation of these values.
I do not think it is part of the role of Ireland to stand aside in such an affair. Ireland's role—if it can do so at all—is to get involved in this development, to contribute to it, and I think we have a lot to contribute to it. We have demonstrated in the forum of the world—the United Nations—that what we have to contribute is greatly out of proportion to our relatively small size and influence otherwise. We can contribute very much to the development of Europe, to the political development of Europe, to ensuring that in so far as a European policy may emerge, it will be one based on the things which we hold dear. This is a matter of major importance for the future for our children and for their children. It may not be of major importance this moment but we as a people are not living just for today and we have an obligation to contribute in so far as we can to that development, to the maintenance and, if possible, the expansion of the values of European culture in which we believe.
On the political level, it has also been said that the objections which arise to the expansion of the Community are unreasonable. Let me say that I would think, if anybody were to adopt the attitude that the Community should never be enlarged, this would not alone be unreasonable; it would be contrary to the Treaty of Rome and would spell the death knell of the effort to organise Europe. But I do not think anybody has said that. Rather, I think what has been stressed is a fact which has not become sufficiently clear to most people in the English-speaking countries, that is, that what has been achieved in the European Economic Community to date has been achieved as a result of tremendous efforts, sacrifices, compromises and worked out with immense difficulty and tedium. There is a very genuine fear that all these efforts, all those sacrifices and all that they augur for the future might be endangered if at this moment there were to be an enlargement of the Community. I think this is a reasonable and a genuine fear but I also believe that the greater need of the Community and of Europe is that the Community should be expanded and, while there are risks inherent in that expansion, it is not by any means impossible to work out arrangements whereby the existing balance within the Community will not be upset.
The advent of new members would, of course, mean changes in the voting structure in the various institutions in the Community but I do not think this presents any insuperable problems. In particular, I do not think it presents insuperable problems, having regard to the applicant countries. It would, I think, upset the balance of the Community if at present only one large nation were to be admitted or only one small nation were to be admitted, but I think the present applicants, in themselves, constitute a bloc which can be integrated within the Community without upsetting the balance. I also think that the Community institutions could be used by us to great effect to overcome a number of the difficulties which people here anticipated arising from our membership of the Common Market.
I mentioned that the objections of some people could be grouped under the heading of the cultural field. I want to say I am convinced that the greatest shot in the arm which Irish culture and the Irish language could obtain would be our becoming a member of the European Economic Community. There are far too many people in this country who—whether they know it or not—think that the world is bounded by Britain on one side and the United States on the other. Most of our people, when they receive news from outside the country, receive it through this source and receive it in the English language. Naturally, news from this source in the English language takes a certain line. I do not say it is slanted but it is interested only in certain things, and interest in matters relating to continental Europe tends to be minimal, with the result that we are subjected all the time to a very powerful form of culture, against which our own culture, with all its vicissitudes, is struggling, and it is a real and difficult struggle.
I believe that the more we become aware of the fact that there are other cultures besides the English-speaking cultures; and that they involve the great traditions of Europe, that freedom and democracy do not have to be spoken of in English to be real—the more we realise that there are other small countries in Europe with the same kind of values as we have, who do not speak English, who have their own cultures and who are cultivating these, who are not asking that their language or their culture be abolished so that they can improve their trading position within Europe and the more our people get a view of reality in Europe—the better it will be for our culture and our language. Of that I am quite certain and I think the fears expressed with regard to our culture and our language in Europe are completely misplaced.
The main discussions in regard to our membership of the Community, of course, hinge on the economic front and, in this field, we find that many people seem to take the view that they can see only difficulties, no advantages, so they say: "Let us not go in; we cannot take the chance; the damage will be too great." I do not think this is true. There are grave risks but this is what life is about. Life is full of risks. All of us run risks every day of our lives and the people who progress, the people who find life is worth living, the people who justify their creation on this earth, are the people who run these risks, who work constructively to improve the lot of themselves and of their fellowmen; and any attitude of hiding one's head in the sand is not only ignoble but highly ineffective.
If we do not want to hide our heads in the sand, we must look at the situation as we see it, as it really is for us. What we see is that if Britain joins the Community and we do not, the common external tariff of the Common Market will be applied between Britain and ourselves against 70 per cent of our foreign trade, either immediately or gradually, probably gradually. If we join the Common Market and Britain does not, the same situation will arise. It is quite unrealistic to expect anything else, and if that situation arises, are we then better off than we are at present?
Clearly this, if it were to happen, would be disastrous for this country and would be of serious economic import for Britain. This kind of problem has arisen in fact in connection with the Austrian negotiations with the Community for a treaty of association. Incidentally, on the question of association, if one goes by the example of the Austrian negotiations, it is not encouraging because they have been going on for years. It seems clear that if and when those negotiations are completed, they will involve, to some extent at any rate, Austria withdrawing from EFTA or being involved in EEC tariffs against the EFTA group. If the EEC is enlarged, and being enlarged, a number of EFTA members go in, the position would be different for Austria.
This is the reality as far as we are concerned economically. As I say, we must never forget that statistic, whether we like it or not, that there is still 70 per cent of our foreign trade with Britain, including agriculture. I might add that in the situation as envisaged about the common external tariff being raised between ourselves and Britain, if Britain went in and we did not, this would occur at a time when Britain would be reducing her duties against the EEC countries and therefore the position would be even worse
We have in Europe today two trade blocs, EEC and EFTA, and they have achieved, or are about to achieve, complete free trade in industrial goods; and indeed within the EEC, they may even reach free trade in agricultural goods and they have gone a good distance along that road. We are outside both blocs. This is the background against which we must consider our situation and we cannot do one thing to change that situation that exists in Europe, even if we wanted to. The position is that all the countries of Western Europe with which we do any significant trade will have or already have abolished tariffs against trade between them, in one group or the other, and we are outside both.
These are the facts of life that we must face. It is an economic environment that exists to which we must adjust ourselves. We cannot isolate ourselves from this kind of development because to a greater extent than any other country in Europe, we live by external trade. We are heading into free trade because this is the environment that exists, and in the interests of our economy, we have got to do it. We know there may be painful adjustments involved in this, particularly in the short term, but they are not nearly as dangerous as the adjustments we would have to make if we were to sit aside while the world moves on, if we were to remain in the first half of the twentieth century while Europe moves into the second half.
I suggest that anybody who objects to the course the Government are following in regard to application for membership of the Community must face these facts and must give us an alternative, if he does not agree with the course being followed. It seems to me that the attitude of the Labour Party in this matter is to say the least ambiguous. We do not know whether the Labour Party are in favour of our joining the EEC as full members or not. I thought at one stage they were; now I am not so sure. They have dragged their feet on this issue and there have been suggestions from them that rather than seek full membership, we should become associated with the Common Market.
It has been made clear before that there is no such thing as associate membership of the Community. A country can be associated with it. Association means that you conclude a trade agreement with the Common Market and nobody can say what that trade agreement would involve. It would be the result of bargaining which would take place, with us in a very weak position as compared with the other party to the agreement. Nobody could say what we would achieve in such an agreement, but assuming we got a reasonably satisfactory agreement, we would have no say thereafter in the changes that would take place within the Community, in the direction of the common agricultural policy or in any of the other aspects which the Community is developing. It is a dynamic, developing community. It is changing all the time and will continue to change for many years to come.
If we had formal association with the Community, we would have no say in this: we would have to take what came. I do not think that is a position any of us would want to see ourselves in but those who oppose the course which the Government have adopted are obliged, if they want to be taken seriously, to demonstrate that it would be better for us to conclude a treaty of association or to have no association or membership. It is not enough to point out the difficulties and to drag one's feet. This matter is too serious for the future of this country, and it behoves us as politicians elected here to deal with matters such as this and to show clearly where we stand, to give a lead to our people, and if we honestly do not favour a particular course, to say so, and not to be trying to achieve a Tadhg-an-dá-thaobh situation where whatever happens, we can say we were right. This matter is so serious that the Irish people are entitled to more than that from their elected representatives.
It should be clear to us, even from a cursory examination of our economy, that if we are to have any hope of expanding our economy, of raising the standard of living of our people, of improving our social services, the only real way we can achieve this is by expanding our exports. With a small home market which is, to a great extent, saturated by our own produce at the moment, the only real hope of expansion lies in expanding exports. The evidence is there that we have the capacity for such expansion, both in agriculture and industry. In money terms, the export of industrial goods rose from £33 million, approximately, in 1956 to £96 million in 1966. Industrial exports as a percentage of total exports rose in the same period from 25.9 per cent to 40.7 per cent. This is no mean achievement, but we can do better, we will have to do better than that.
I want to stress the fact that too many people seem to have no faith in the ability of our industries to compete. I want to point out that that record alone is spectacular and shows what we are able to achieve. If anyone says to me: "That is all right, but it was achieved in the British Market where we had a preference or, in recent times, free entry", I want to point out to them that 40 per cent of our manufactured goods exports go to places other than Britain where they are competing in world markets without preference. That is something of which we should be conscious.
I do not want to say that the situation is going to be easy, but it is no good for us to go into this situation of the Common Market and free trade without faith in our industrialists and exporters. It is on them we depend largely. If we are not only to survive— that is not good enough—but to improve our standard of living, we must depend on our industrialists, and particularly our exporters. We want to help them in any way we can. Let us not decry their efforts; let us not assume that they are not able to compete. They have demonstrated that they are able to compete, and compete successfully.
One of the problems we have at the moment, especially having regard to the vital necessity to export, is that too few of our firms are exporting. Out of approximately 2,000 firms producing goods which could be sold on the export market only 750, roughly, are exporting. This is a higher percentage than in many other countries, but it is not high enough for us. We have to get these other 1,250 or 1,300 firms who are not exporting to export. We are devoting particular attention to those firms to try to induce them to do so.
The fact that we still have that relatively high number of firms which could export not exporting indicates the number of firms which have not been able to read the writing on the wall. One would have thought it was clear enough by now. Firms which are content to stay in the home market are going to have very difficult times in the years ahead because, in effect, there will be no home market in the sense that with free trade, goods from other countries will come in here and will be competing in this market with our manufacturers. So, unless our manufacturers can get a foothold in the export market now, they will find it much more difficult to do so in the future. They now have a few years in which to do it while there is still protection for the home market base. Those who have gone into the export market, and those who will go into the export market within the next few years, are very likely not only to survive but to do very well. If we go into the EEC, those who are not making a real effort will not do well, and may not survive.
The Government have never pretended that joining the EEC will not create problems for Irish industry. It will, and we know very well it will. In fact, we have assessed, and are continuing to assess, the problems for Irish industry sector by sector, to isolate these problems in free trade conditions, with a view to assisting those sectors of industry as effectively as we can to overcome the difficulties which we see arising. We know that some of our industries will gain, and gain substantially, by reason of the opening up of the huge continental markets without duties being placed against our goods, but we also know that some of our firms are going to be adversely affected. By and large, as I have said, the ones which will be adversely affected are those which have not made any preparation and have not tried to get into exports.
We must remember that we cannot have it both ways. We cannot have free trade in certain sectors where it suits us, and not have it in other sectors where it does not. Free trade means free trade all across the board. We hope that in joining the Community we will be able to arrange for the removal of protection on a gradual basis for a reasonable transitional period, but we should recall also that there is very likely to be a demand that if we want a transitional period, say, for industry, the same kind of transitional period will apply against our goods, industrial or agricultural, going into the Common Market. Even assuming that we can achieve a reasonable transitional period, this should not give any false sense of security to industry.
One of the effects of going into the Common Market will be to oblige us to bring our tariffs into line with the common external tariffs of the EEC. This is likely to have two main effects on Irish industry. Where we have duties at the moment against goods coming in, other than from Britain, they are, generally speaking, at a higher level than the common external tariffs of the EEC. Where that obtains, we will have to reduce our tariffs against third countries down to the level of the common external tariff. Having regard to the fact that there has been a reduction in the common external tariff as a result of the Kennedy Round, we may take it that the duties we impose against third countries will be substantially reduced eventually. This will make it easier for these third countries, that is, non-EEC countries, to sell in the Irish market but, in certain sectors in which this could cause undue difficulty, we may be able to avail of the provisions of the common commercial policy of the EEC to restrict imports from low cost and state trading countries. The EEC are still working out this common commercial policy and the ultimate aim is that all the member States of the EEC will eventually have common arrangements covering all aspects of trade between them and the non-EEC countries.
Another aspect of reducing our tariffs against third countries is the fact that some of our basic raw materials, which at present come in free of Irish duty, would become liable to the common external tariffs of the EEC, but, where our manufacturers are buying these raw materials at present either from the EEC or from some of the applicant countries, there should not be any great difficulty because there will be no tariff applied, if they are in, or if the raw materials are coming from within the Common Market. However, where an Irish manufacturer at the moment is getting his raw materials from a non-EEC source, and where they are subject to a common external tariff, he will have to pay that tariff on the raw materials coming in.
I should, I think, point out that any disadvantages which may arise for a manufacturer in that situation should be offset by the fact that, when he manufactures his goods, he then has a much larger market in which he can sell without any tariff against his goods. At present there is a substantial tariff against the bulk of the market which would then be open to him. Our competitors, including Britain, would of course be subject to the same limitations.
Not enough stress has, I believe, been placed on the fact that the market available to us in the Common Market is a vast one, and an expanding one, and we can derive considerable benefits from this. We have demonstrated by our performance in the past that in certain sectors we can compete against goods in any part of the world. In competing in the European market, with protection against competition from outside the Common Market, we are likely to do extremely well. There are some sectors of industry at the moment—for instance, the clothing industry—in which we do not do a great deal of business, though we do some, with Common Market countries. We do not do a great deal because the extent of the tariff against our goods is such as to make it almost uneconomic in most cases; but, if that were removed, our manufacturers are quite capable—they would, of course, have to alter some of their stylings, and so on—of competing very successfully in that market.
In connection with the garment industry I might mention that we can, by supplying a very small percentage of the market which would be available in an expanded Common Market, derive certain advantages. This would be of enormous importance to us but would have no major effect within the Common Market. We could do this because, with certain distinctive styles of garments, the small numbers relatively coming in from us spread around the whole Community would constitute exclusive items commanding good prices. This is one aspect of the industry which might, I think, be borne in mind. There are some advantages in not being too large and in not being tied to enormous production runs and having to dispose of that production at any price.
We have already entered on an era of free trade with Britain and this is proceeding in accordance with the Free Trade Area Agreement, so that protection for our manufacturers is going in any event. In this light, the additional competition which our industries will have to face as a result of joining the EEC will, I think, be small compared with the export opportunities which will be opened up. It is true that most of our industries are small by Common Market standards but they can, by co-operation and rationalisation, improve their position enormously. I am not now speaking theoretically. I am speaking about things that are taking place.
There is in my Department a branch known as the Industrial Reorganisation Branch. That Branch is concerned with meeting industry on the shop floor and in the boardroom and urging industrialists on to co-operative marketing, to rationalisation, to mergers. They have been quite successful in many fields and some of our firms, small by European standards, have co-operated. They have gone into export marketing on a co-operative basis. They have been very successful and there is obviously plenty of room for expansion of this idea. The fact that our industries are small need not necessarily be a great inhibiting factor in competing in Europe. There are certain advantages and some of the disadvantages can be overcome by an intelligent approach to the whole problem.
Irish enterprises which have gone into the export field have, in the main, shown a steady expansion and a steady growth. I believe this will be the situation in future within the Common Market in the case of those firms which are getting into the export market now, should we go into the Common Market. They will continue to grow and expand. This has been the experience of the smaller countries of the Common Market. Many of them had the greatest fears as to what would happen to their industries and they have found that many of their industries have expanded and continue to grow. Some of them suffered but, taking it over all, the net position is a considerable gain to each of the countries concerned. If we approach our problems in the right way, I believe we will have exactly the same result.
As I have said, the position in Europe is that we have these two trading blocs abolishing tariffs between them. As a result of Britain being a member of one of them, the value of our preferences in the British market has been steadily eroded. We must, therefore, base our policies on this reality about which we cannot do anything except what we do ourselves and how we approach it. We cannot prevent these developments.
The Government intend to use all legitimate means to help any industry to survive which is willing to help itself. They will do everything possible to cushion the impact on workers who may find themselves displaced as a result of reorganisation and adjustment which will be forced on Irish industry. The House is aware that arrangements are being made to enable workers to be retrained and resettled, where necessary, and to provide a scheme of redundancy payments.
A factor we should bear in mind in regard to employment, apart from the expansion of employment in the firms which will do well in the Common Market, is that it is reasonable to assume that the number of foreign firms setting up in Ireland will increase when we are within the Common Market. One of our difficulties in attracting foreign enterprise to this country at the moment is that, from here, we do not have access to the large European market. If they had such access, combined with the pool of high-grade and adaptable labour which we have in this country, there is no doubt that many of them would want to come here and will come here when we are within the Common Market. This should certainly operate effectively to offset disadvantages from the point of view of employment in firms which are either closing down or having to readjust or rationalise and thereby let people off.