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Dáil Éireann díospóireacht -
Wednesday, 11 Nov 1970

Vol. 249 No. 7

Adjournment Debate: Footwear Imports.

I regret keeping the House here late tonight but I would be failing in my public duty if I did not avail of this opportunity to ventilate a very serious national problem affecting the livelihood of a very large number of people. On Thursday last I asked the Minister for Industry and Commerce:

...whether he is aware of increasing and widespread redundancy in the footwear industry resulting from the operation of the Free Trade Agreement; and whether he will take steps to consult with the British authorities with a view to stemming the increasing volume of imports of footwear on the basis that the present situation constitutes a serious threat to the industry here.

Not only was the Minister not prepared to accept the implications contained in that question, but he was not prepared either to do anything effective about this important matter. First I should like to express the ardent hope that the Minister has not come in here tonight with a closed mind on this subject. That would be to disregard altogether the danger signals which are flashing from so many sectors of the footwear industry today. To treat this matter lightly would clearly be an abandonment of responsibility by the Minister. My purpose in raising this on the Adjournment tonight was to ensure that the Minister would face up squarely to this important matter and act quickly and courageously to safeguard one of the most important sectors of our economy, the boot and shoe industry.

We must bear in mind that before the implementation of the Anglo-Irish Free Trade Area Agreement, in so far as it affects the boot and shoe industry, that industry was protected by a quota system which proved very effective. A quota was fixed in recent years of 165,000 pairs annually. Since the abolition of the quota on 1st July of this year and the substitution therefor of the tariff system, serious inroads have been made into the industry. This country has been deluged with imports of foreign footwear. They are to be seen in almost every shop in all parts of the country. For 1970 the tariff which was fixed was in respect of all countries other than Canada and the United Kingdom. The tariff was 54 per cent or 9s per pair of footwear and was to apply for the next four years up to 1975. In respect of imports of footwear from Canada preferential treatment was given. For 1970 the tariff stands at 36 per cent or 6s per pair. That will continue unaltered until 1975.

In respect of footwear from the United Kingdom we have evidence of very special preferential treatment. At present the tariff is 22.5 per cent and it will go down by 4½ per cent each year, or 9d per pair, until it disappears altogether by 1975. In 1971 the tariff will be 18 per cent or 3s per pair. In 1972 it will be 13.5 per cent or 2s 3d per pair. In 1973 it will be 9 per cent or 1s 6d per pair. By 1974 the tariff will be 4½ per cent or 9d per pair and then it will disappear altogether. At that stage the prospect facing the industry is one of complete and utter free trade. The present tariff system of 3s 9d per pair — 3s per pair at the beginning of next year — has proved to be no deterrent to foreign imports especially from the United Kingdom. This barrier was surmounted quite easily as the figures for the first two months of the operation of the levy clearly indicate.

During July and August of this year —the first two months of the operation of the levy system — 304,344 pairs of footwear were imported into this country and, to add insult to injury, 37,548 pairs were duty free. Clearly, the floodgates have been opened and our Irish market has been deluged with foreign footwear. This constitutes a most serious threat to the future of the industry and to those employed in it. Redundancy has already reared its ugly head in very many centres. In Dundalk some 20 men have been laid off as redundant within the past two months. I might say that Dundalk is the hub of the footwear industry. Nearby in Drogheda, another very important centre, 48 operatives have been laid off within the past two months. There have been lay-offs, redundancies, short-time working in other centres also. I am sorry to relate to the House that I understand the footwear factory in Birr is likely to close or to be sold.

Already the very important centre at Clonmel has been closed, and precious little the Minister did to assist that industry at Clonmel in the difficulties they experienced. Despite much pleading with the Minister and his agencies, despite all the representations and deputations, the Minister or his agencies never lifted a hand to assist the Clonmel factory to get on its feet. It is to the eternal disgrace of that Government, having regard to the very strong pleas made to them, that they did absolutely nothing to assist that industry, but allowed it to go to the wall.

Since the quota was abolished over 100 operatives have been laid off. That is a minimum. Productivity for the first nine months of this year is down considerably. Exports for the first nine months of this year are down considerably but imports of foreign footwear have increased out of all proportion.

My purpose, therefore, in coming into this House tonight is to appeal to the Minister to consult, as a matter of urgency, with the British Board of Trade, with a view to stemming this flood of foreign footwear, especially from the UK and thereby safeguarding this essential industry. We ask him to ensure that the issue of duty free licences, which is becoming a scandal, should be discontinued forthwith except in very exceptional circumstances and where it can be positively proven that there is no reasonable substitute for that footwear manufactured at home. The import duty which is so easily surmounted, and which I have already outlined, should be re-negotiated with the British Board of Trade with a view to having the duty increased and if necessary extended over a much longer period and as is, in fact, contained in the agreement upwards to 1981. I feel also that a blanket quota should be applied; a quota system should be reimposed together with a duty over an extended period if the industry is to be adequately safeguarded.

I want to state and to place on the record of the House the means at the disposal of the Minister for bringing immediate relief to the industry as contained in the Free Trade Area Agreement between the Government of Ireland and the Government of the United Kingdom signed at London on 14th December, 1965. I am earnestly asking the Minister and his Department forthwith to invoke Article XIX of the Agreement which appertains to difficulties in particular sectors. It states:

(1) If in the territory of either party—

(a) an appreciable rise in unemployment in a particular sector of industry or region is caused by a substantial decrease in internal demand for a domestic product, and (b) this decrease in demand is due to an increase in imports from the territory of the other as a result of the reduction, modification or elimination of import duties, protective elements in fiscal charges or quantitative restrictions in accordance with Article I, IV or VI,

the parties may — I quote from section (2) of Article XIX:

Notwithstanding any other provision of this Agreement, if at any time after 1 July 1966 either party considers that the application of Article I, IV or VI to any product would lead to the situation described in paragraph (1) of this Article, it may propose and the parties may agree on other measures instead of, or in addition to, the restriction of imports in accordance with that paragraph, including, as may be appropriate, an alternative rate of reduction of the import duty or protective element concerned, provided that any such duty or protective element shall be eliminated not later than 1 July 1981.

Section (3) is worthy of quotation also. It reads:

The parties may agree, in the light of the review for which provision is made in paragraph (5) of Article I, that the rate at which the remainder of the import duty or protective element shall be reduced in respect of imports of a product from the United Kingdom into Ireland shall be modified and, if necessary, that the period after which the duty or protective element is to be eliminated shall be prolonged, provided that any such duty or protective element shall be eliminated not later than 1 July 1981.

Section (4) reads:

Before 1 July 1975 the parties shall jointly consider whether the provisions of paragraphs (1) and (2) of this Article will continue to be necessary and appropriate to deal thereafter with difficulties of a temporary character and shall agree on such provisions as they may find to be necessary.

The Minister has here at his disposal the procedures by which he may act quickly to safeguard this industry.

I understand that the American Government are at present actively considering restriction of imports of various kinds into that country. South Africa and many other countries I could quote are also considering doing this. This is true in particular of the importation to the USA of clothing and footwear. America is undoubtedly one of the richest and most powerful countries in the world. If America can take steps to protect her industry surely poor little underdeveloped Ireland should not be ashamed to take them and the Minister need apologise to nobody for taking such steps.

I would remind the House that Britain herself, with a very strong economy, saw fit in recent times to impose the infamous levy on imports into her territory and this levy had a most deleterious effect on importers here and placed them at a very considerable disadvantage. I say Britain was right to defend her economy and take whatever suitable measures she felt she was entitled to take but we are also entitled to take steps and need not be ashamed of it. The steps which Harold Wilson's Government took were in complete violation of the Anglo-Irish Free Trade Area Agreement. I do not think they accorded us the courtesy of consultation in advance on that occasion so the Minister has at least a precedent and should not hesitate to act on behalf of our economy when it is attacked in such an unfair fashion.

I should like to draw the attention of the Minister to the fact that some leading wholesale and retail interests in this country have virtually discontinued buying Irish footwear and are, in the main, supporting their foreign based masters. I would further draw the attention of the Minister and the House to the fact that some Irish manufacturers of footwear have turned their attention to this obviously lucrative business of importing foreign footwear and are now among the leaders in the import league table. Obviously these people care little for the employment of workers; they are only concerned with making a fast buck. This is obviously the trend of things and an indication of things to come. The Minister in reply to a question of mine on Thursday last used this statement:

On the other hand, the Deputy may be aware from statements recently published that some firms are experiencing difficulty in the recruitment of workers.

This may be true in certain sectors where there is a shortage of workers, particularly of young females, but in respect of the two companies which made this statement it was ironical that at the exact time they made the statement about an alleged shortage of labour their own workers were on short time. It is unfair to make statements of this kind and I refute that kind of statement. If I may, Sir, say one word on the matter of the duty-free licences——

The Deputy has half a minute.

The matter of duty-free licences is a national scandal. It seems to us they are handed out merely for the asking. There is no proper screening as we see it and we look with suspicion on the manner in which they are dealt with at present because the amounts being imported here have reached alarming proportions. I believe that reasonable substitutes can be found for them. I appeal to the Minister to take action. If he does not, let the repercussions be on his head.

I noted that the Deputy in his opening remarks apologised for keeping the House here at this late hour but stressed that this was a rather important matter he wanted to have dealt with. Let me say immediately that I accept the fact that the shoe industry in this country is a very important one. I have no objection at all to being here to deal with the case as presented by Deputy Treacy but I take exception to the manner in which he chose to indicate to the Chair that he proposed to raise this matter on the Adjournment. He said, in view of the complacent and unsatisfactory nature of the Minister's reply, he proposed to raise the matter on the Adjournment. I have no objection to the Deputy feeling that my reply was unsatisfactory but I certainly object to him describing me as being complacent in relation to what he describes as a problem in the shoe manufacturing industry.

The Deputy in the 20 minutes available to him covered quite a wide range and I will reply to the best of my ability in the short time at my disposal. I will start by commenting on the action he suggested I should take in relation to what he describes as a serious crisis situation. So far as the boot and shoe industry is concerned the figures available to me indicate that there are in the region of 5,500 people engaged in this industry. The Deputy quoted figures for the July-August period for the importation of boots and shoes and said this had the effect of laying off people in the two towns which are very much involved in this industry.

The Deputy mentioned a figure of 46 or 47 people in the Drogheda area and a figure of 20 in the Dundalk area, that is about 67 people, who would be laid off. He subsequently spoke about almost 100 people being laid off. He indicated that I would be justified in opening up discussions with my counterpart in the British Board of Trade for special action to be taken by me under Article 19 of the Anglo-Irish Free Trade Area Agreement. I agree with the Deputy that I would be justified in going to my counterpart if there was an appreciable increase in unemployment due to falling off in internal demand for shoes in the home market because of increased importation of leather boots and shoes from Britain.

I said on Thursday last, in the course of my unsatisfactory dealing with the case, that the information which I had at my disposal did not justify me in approaching the British Board of Trade at this stage with a view to re-negotiating. I said I should have no hesitation in following that course if I had justification for it. When I say I do not accept the temporary redundancy of just over 60 people out of a total of 5,500 people in the boot and shoe trade would justify me in approaching the British Board of Trade with this claim I do not want the Deputy to come back again and say that I am complacent in connection with it.

May I make a correction? It is not a matter of temporary redundancy. There have been complete lay-offs. There have been closures and there are closures pending, to my knowledge.

I want to deal with those things in the limited time I have. Reference was made to Clonmel. The Deputy made reference to the activities of my predecessor, the officials of my Department and consequently the officials of the Industrial Development Authority and me as Minister. He alleged that we never lifted a hand, that we did absolutely nothing to save the industry for Clonmel or to find an alternative industry. The Deputy knows that is wrong and that he is completely out of order in suggesting that nothing serious was done.

It is true.

The fact that nothing has so far been found to replace it or the fact that the factory has not reopened does not mean that nothing was done in relation to it.

I know nothing was done.

I have studied the situation and looked into what has been done since this threatened development some years ago and I want to put on the record in this House that I cannot accept the Deputy's allegations in this regard. He also referred to the shoe industry in Birr and said it is on the verge of being closed down and sold. I do not accept that that means we are not going to have a continuation of the shoe industry in Birr.

I want to say that at present I am not justified in taking the action which the Deputy suggested I should take under Article 19 of the Anglo-Irish Free Trade Area Agreement. I am surprised at the representative of the Labour Party seriously suggesting that I should follow the example of the South African Government or the American Government in regard to protecting this industry. At present we export more shoes to the UK than we import from them. This is something which should be carefully borne in mind in relation to taking any positive action against imports from that country. The Deputy chose the occasion to say that there were wholesalers and retailers who were buying imported shoes to the exclusion of Irish shoes. He is associated with the Labour Party who claim they are very closely associated with the trade union movement. I appeal to the representatives of all trade unions in the distributive trade, in the retail shoe trade, to try to stir themselves that little bit more in suggesting and recommending quality Irish shoes to the Irish housewife, to the Irish customer. I do not think enough of this is being done. I have promised to myself that I would endeavour to use every occasion I could to stress that, to get across the desirability and the national advantage of buying the quality Irish shoes which we have. The proof that ours are as good as and better than what we get from the United Kingdom is the fact that we export more to the United Kingdom that we import from them.

I am not complacent in connection with this matter. I am constantly receiving representations from the union representing these workers. I am very anxious to maintain that employment and nothing I can do will be left undone to maintain employment in the shoe trade. As I say, I am not being complacent about it and I welcome the opportunity the Deputy has given me to reiterate my interest in maintaining employment in the boot and shoe industry.

The Dáil adjourned at 11 p.m. until 10.30 a.m. on Thursday, 12th November, 1970.

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