I move:
That Dáil Éireann recognises the need for an equitable and comprehensive world trade agreement but refuses to accept the agricultural provisions of the emerging Uruguay Round agreement on the grounds that they impose excessively onerous and unbalanced restrictions and obligations on the EC and are inconsistent with the principle of equality of treatment of all partners.
We have put this motion before the Dáil because we fear that the Government, in particular the Minister for Agriculture, Food and Forestry, will let slip the last opportunity that may be available to restore an element of equity and fairness to the agricultural provisions of the GATT. If this opportunity is lost, and we gather that whatever will be done must be done before 15 December, barely a month away, the consequences for our farming community, rural communities in general and our food industry could be devastating.
As GATT negotiations stand, the European Community will have to take on a certain number of obligations. It will be obliged to lower its internal agricultural prices to approximately world price levels; it will be obliged to reduce accordingly the level of export refunds and import levies required to sustain the target price levels within the European Community; it will be obliged to dismantle substantially its price support arrangements; to guarantee expanded access to Community markets for meat, dairy products and for other key products and expanded access for exporters in other GATT partner states, while itself suffering a reduction in its ability to export to those states. It will be obliged to accept that its meat producers will continue to be excluded from the rapidly growing Japanese market for meat, a situation which has prevailed since 1985.
Without going into too much detail, the specifics of this are appalling. Internal support for agriculture would be cut by about 20 per cent over six years with the exception of certain direct income supports which are considered not linked to production or prices. Export refunds in the Community would be reduced over that six year period by 36 per cent in financial terms and the volume of products to be covered by export refunds would be cut by 21 per cent compared to their average levels in the period 1986-90. Import levies in operation in the Community would be converted to tariff equivalents, "tariffied" as they say, and reduced by 36 per cent over six years. That prospect "tariffies" me. There would be a minimum access requirement for GATT partners of 3 per cent of internal EC consumption in the first year and 5 per cent in the final year, that is compared to a base on the period 1986-88. The European Community would be obliged to undertake those obligations.
While the European Community is accepting those reductions in its ability to support farm prices and in its ability to export, what is happening to the other GATT partner countries? They, in particular the United States, Canada, Australia and New Zealand, would benefit from new opportunities to increase their exports. As the European Community producers disappear from markets around the world, those extra export opportunities would be opened up to exporters in the other GATT partner countries, particularly, as I said, the United States, Canada, Australia, and New Zealand. Producers in those countries will not be obliged to accept any discipline or restriction on their production levels. In fact, we can already see that levels of production in dairy products, for example, are expanding in New Zealand and may begin to expand in the United States. Producers in those countries are gearing up to move into the markets out of which the European Community will be progressively frozen. Those countries will not be obliged to give any reciprocal guarantee of access for European Community exporters to their markets.
On any judgment, the provisions of the infamous Blair House Agreement must be regarded as seriously unbalanced. The European Community must suffer restrictions while its partners in the GATT gain extra opportunities for expansion. There is no such imbalance in any other part of the emerging GATT agreement. In no other sector can we see such a clear contrast between what happens to one trading partner and what will happen to all the rest. No other sector in any part of the GATT will lose in the way European Community agriculture will lose, no other country — apart from Ireland — will lose on a scale relative to its GNP from these agricultural provisions. The consequences of these arrangements in rural Ireland will be nothing short of catastrophic.
We propose that is simply not acceptable. It is time for the European Community, and indeed for the Government, to wake up and try to restore equity to an agreement that is one way traffic. We normally look for an element of give and take in international agreements. The only element of give and take in this Blair House Agreement is that the European Community has to give while the other partners do all the taking. That has been signalled ever since that most appalling unilateral cave-in by the then Commissioner for Agriculture, Mr. Ray MacSharry, at Dromoland Castle in August 1991. Since then, the European Community has allowed itself consistently to be out-manoeuvred by the United States negotiators. He went to Dromoland Castle and, perhaps seduced by the beauty of the place, offered unilaterally a 30 per cent cut in the levels of EC internal support. I do not know what game he thought he was playing; perhaps he thought that if he showed willingness, the United States negotiators would say the deal was in the bag. However, at Dromoland Castle Ray MacSharry gave the American negotiators a taste of blood, and they liked it. They realised they had breached the EC's defences and decided they would go back for more. Go back for more they did, with a vengeance, and since then the European Community has been on the run.
I do not know exactly what went on in the Commission at that stage, much less what was happening in Government here. At that time it was still a Fianna Fáil-Progressive Democrats Government, the Progressive Democrats have not yet taken French leave. I am not sure what was going on either within the Commission or within the Government here. It seems that within the Commission, Commissioner MacSharry, who was making all these generous offers, was actually being undermined by colleagues of his in the Commission, by Commissioner Andriessen and, one suspects, by the President of the Commission, because it appears they were talking separately to the Americans and saying that there might be a little more available. I do not know what was happening within our Government at that stage, but certainly they were not awake to the implications of what was happening under their very noses. It may have been that because it was the summer period — Fianna Fáil members of the Government seem to follow a general policy of just disappearing for the summer, keeping their heads down and saying nothing in the hope that nobody will notice their absence — they did not make any comment about the serious implications of what Commissioner MacSharry had offered at Dromoland Castle.
This Government and its predecessor failed utterly since then to bring home to the EC Commission just how serious would be the implications of this emerging deal for Ireland. Such protests as were made by the Taoiseach and the Minister for Agriculture — I will revert to those in a few minutes — were feeble and wimpish in the extreme and did not appear to carry any conviction. Certainly, they had no effect on the course of the negotiations between the Commission and the United States.
In a very real sense both the Taoiseach and Minister for Agriculture must bear the responsibility for the dilemma we now face. We should have very little sympathy in this House for the Minister for Agriculture. I see he sent the unfortunate Minister for Tourism and Trade, Deputy McCreevy, into the House this evening, who has hardly had a role in these negotiations. As far as I know, he was brought along to one jumbo Council meeting when Sir Leon Brittan terrified the entire Council of Ministers and got the kind of marching orders he wanted to get to go to Washington without, as far as one can ascertain, one cheep of protest from any of the Ministers. I contend it is the Minister for Agriculture who should be here explaining himself. I do not blame the Minister for Tourism and Trade; I am sure he had other things on his mind, such as promoting tourism. Indeed, we are going to need that tourism, if he can promote it, because it will be the only source of revenue in rural areas if the Minister for Agriculture gets his way and this GATT Agreement is imposed on us.
At this very late stage in the game the very least we are entitled to expect is that the European Union would be deemed to apply the kind of hard ball game the United States negotiators have been playing ever since the MacSharry cave-in. At the very least what we need at this stage are, first of all, reciprocal guarantees of access to markets in other GATT countries, however they are expressed. We cannot go along with a unilateral surrendering of markets by the European Union without obtaining something in return. Second, we need from the other GATT member states, particularly from the United States, Canada, Australia and New Zealand, reciprocal undertakings from those states to control their levels of production of key agricultural products. Without those kinds of reciprocal undertakings and agreements, the GATT Agreement as it is now emerging will constitute a one way ticket to penury for rural Ireland.
I have been campaigning around the country on these issues since the early part of 1991. As a Member of this House concerned with what is happening in rural Ireland, not just in my constituency but in the 41 constituencies nationwide that will be affected by this agreement — even urban constituencies will be affected since our food industry will be very much in question — I have been campaigning throughout the length and breadth of this country over that period on these issues, keeping in touch with them as they emerge, as the problems are brought to the surface.
I have to say quite honestly that rarely have I found a level of disquiet such as that I found about what will be the effect of this emerging GATT Agreement on rural Ireland. Everywhere I go I meet it. Even without my saying anything about these issues, people are coming to me — farming people, people in the food industry — expressing their worries and fears when they look at what is about to be visited on us. It is one of those issues on which they began, early in 1991, with a fairly vague, rather unfocused fear of what were the implications, but as time has gone on they have come to understand more and more of just what is involved, more and more fearful of the implications for their businesses, way of life and for their communities.
I have had these fears expressed consistently since then. For example, last Friday evening I was in County Mayo. In two different places I met large numbers of people whose principle concern now is the effect of these reductions in export refunds and so on on their levels of income, their ability to sustain their families and to provide for their families. I find increasingly that, in addition to being concerned for themselves, their families and businesses, people are worrying — and articulating it very clearly — about the effects of all of this on the communities in which they live. They are beginning to fear in a very real sense that many of their communities will simply disappear.
I spent all day yesterday in the constituency of Cork South-West. I spent a good portion of the day talking to people in two of the major milk processing plants there. They are extremely worried. I would have to admit that it is difficult to spend a day in Cork South-West without coming up once or twice against people who support the Minister for Agriculture since it is his home constituency. But I find that even those people are extremely worried at what is facing them. Indeed, they are not all that sure that they are being told what are the full implications of this deal. I suppose I should not be too surprised to find that in some cases they are now giving out a line which I think the Minister for Agriculture must be planting. They are saying that, although all of this will be very difficult, they expect something to be imposed at the last moment that will in some way mitigate the effects of these changes. I have the impression that the Minister for Agriculture is sitting there in desperation, like Mr. Micawber, hoping that something will turn up, hoping for some last minute miracle that will avert the catastrophe which he must surely see as coming, but actually doing very little to bring it about. That something will not just fall out of the sky; it will have to be worked for, and there is very little time left in which to ensure that anything happens.
I have been wondering about just what is the Government's view on these things and what view has been taken by the Minister for Agriculture about what is emerging. I looked back over a small selection of quotations over the past few days that might indicate to us what the Minister and indeed the Taoiseach might have been thinking. For example, in The Irish Times of 2 November 1992 I found a report of statements made by the Minister for Agriculture and Food on the previous evening. We might have expected on that occasion that the Minister would have been endeavouring to put as good a gloss as he could on what was happening. We must remember that 12 months ago we were in the midst of the general election campaign when one might have expected that a Minister for Agriculture would have been endeavouring to present things in a positive light. We find that what the Minister for Agriculture was saying then was irresponsible, verging on the absolutely nonsensical. He was talking about the emerging agreement and was quoted as having said on 1 November 1992:
However, to be acceptable, the agreement will have to be both balanced and global. We have insisted that the compensatory measures associated with CAP reform will be completed safeguarded in the "green box" mechanism, so that they will be permanent and not subject to reduction under GATT rules.
That was where the rot started, because in making that point about safeguarding these compensation mechanisms the Minister exposed the flank. He indicated very clearly that the opposition of the European Community to the trade parts of this agreement possibly could be bought off by internal compensation being allowed to operate within the Community. We have seen the results of that.
Only a month or two ago there was another argument between the European Commission and the United States negotiator now, Mr. Mickey Kantor, when we had the very worrying spectacle of our Tánaiste going off, indicating that if agreement could not be reached on the kinds of things that the European Community wanted changed in the emerging agreement, perhaps the Americans might be good enough to agree that we could have compensation from internal Community resources.
In other words, the Americans would tighten the screw still further on us on the trade side and we would dig around within our own resources to find some way of compensating for that. In that regard the Tánaiste displayed an appalling lack of any familiarity with even the most elementary rules of economics but, more importantly, he was clearly signalling to the United States that we could be bought off by being allowed to compensate ourselves for new difficulties that the United States might visit upon us.
The most worrying part was that all this seemed to be part of a set up. Looking at it from where I stand it seemed that there was signalling in the background between the Commission and Mr. Mickey Kantor and the Tánaiste. The Tánaiste duly made his statement suggesting that maybe we could compensate ourselves and, right on cue, one day later Mr. Mickey Kantor said: "I have not time to think about all this, I do not want to change anything in the GATT agreement but if the European Community wants to operate internal compensation that is all right with me". That is a picture of a Government that has completely abdicated responsibility to try to get any of the changes we need in this GATT agreement.
I read in The Irish Times of 17 November 1992, the following statement attributed to the Minister for Agriculture, Food and Forestry:
The Minister for Agriculture, Mr. Walsh, yesterday expressed confidence that the Commissioner will return from Washington with a "fair and balanced" agreement within the parameters which had been set for him.
I wonder what the Minister was playing at when he said he was confident that the Commissioner would return from Washington from a negotiation, with a "fair and balanced" agreement within the parameters which had been set for him. Those parameters already included the reform of the Common Agricultural Policy which, in turn, had been driven by the EC Commission's desire, at almost any price, to get a trade agreement with the United States. Our Minister for Agriculture, Food and Forestry, weakly and without any kind of determination, agreed to put us in the hands of a Commissioner who was already bound by this nonsensical Common Agricultural Policy reform that has given us the kind of bureaucracy that farmers have to deal with today and said he would come home from Washington with a "fair and balanced" agreement.
On 21 November 1992 the Minister is again quoted in The Irish Times as saying that “compensation measures would be safeguarded” but, for the first time, he expressed concern about limitations on subsidised exports in the beef and dairy sectors. He said he will need to be clear that these can be accommodated within the Common Agricultural Policy reform arrangement before there would be any question of his acceptance of the agreement in the EC Agriculture Council. Here again the Minister clearly indicated that he was not going to rock the boat. So long as he could be assured that all these changes being visited on us could be accommodated within the Common Agricultural Policy reform which, in turn, was driven by the EC Commission's desire to have a trade agreement with the Americans he would not object too much. That is about as weak as one could possibly find and another indication of how weak the stance of the Irish Government has been on this essential issue.
On about 20 November the first sign of real opposition from the European Community emerged not from the Irish Government but from the French Government. The French Government was the first to react strongly to these talks and at that stage they got no real support from the Irish Government, only these wimpish expressions by the Minister for Agriculture, Food and Forestry that he would like to know that these new impositions on us could be accommodated within the Common Agricultural Policy reform. The Irish Times of 21 November 1992 stated:
The Taoiseach, Mr. Reynolds, said last night he was satisfied that the EC Agriculture Commissioner, Mr. Ray MacSharry, had got the GATT balance right and that Ireland's interests would be protected under the new arrangements.
That was possibly the most damaging statement made at that time because in that short sentence the Taoiseach made the fatal admission that he felt Ray MacSharry had got the balance right, there was no problem with the emerging arrangements and that Ireland's interests would be safeguarded and protected when, in fact, we all know the arrangements do nothing of the kind. The Taoiseach had admitted that he was not going to create any waves or rock the boat. It is no wonder that what has emerged has been so inimical to us when our Minister for Agriculture, Food and Forestry was unable to raise a boo about the arrangements and our Taoiseach said that the Agriculture Commissioner had got the balance right.
Two days later the Minister for Agriculture, Food and Forestry was still worrying about the compensation mechanisms but he was not doing anything about it. How could he in view of the fact that the Taoiseach had already put up the white flag of surrender and said he thought the balance had been got right. An article in The Irish Times of 24 November 1992 quoted this gladiator of a Minister for Agriculture, Food and Forestry saying:
While welcoming the fact that a "most damaging" trade war had been averted by the GATT agreement, the Minister for Agriculture said he was concerned over the limitations on subsidised exports, particularly as they would affect the beef and dairy sectors.
In the one statement he said he was worried about some parts of it but he had accepted that a "most damaging" trade war had been averted. This war had been averted and the Minister had not fought even the most token battle about the features in this agreement which are most damaging to Ireland's interests and to Irish farming.
I said that in my view the CAP reform, which the Minister was so complimentary about, was driven by the Americans and by the EC Commission's desire to get a trade agreement with the GATT. I also said it seems that the then Commissioner MacSharry had been undermined because the President of the Commission and the trade commissioner at the time were running a separate agenda from his and pushing the Americans in the direction where they could get the most concessions from Commissioner MacSharry.
The Taoiseach's statement that the then Commissioner MacSharry had got the balance right is absolutely inexplicable. That was the most damaging admission made during the whole process and the one that has caused the greatest problem ever since. I am tempted to ask if the Taoiseach's admission was just another little anecdote in the process of dehumanising the GATT but it certainly was not calculated to do anything worthwhile to protect the interests of Irish agriculture or the Irish economy generally.
What happened since? Between December 1992 and April 1993 the agriculture Ministers of the EC repeatedly failed to give any new instructions to the Commission about what they wanted in the agricultural part of the GATT agreement. The agriculture Ministers, and the jumbo council that included the trade Ministers, agreed to a bland anodyne set of marching orders for Commissioner Leon Brittan and sent him off to Washington in the hope that he would come back with some clarifications and interpretations that would protect agricultural interests in the Community.
As it happened, a short while after the famous jumbo Council meeting which the Minister for Tourism and Trade attended with the Minister for Agriculture, Food and Forestry, I happened to be in Brussels for another meeting and I dropped into a meeting of the EPP group in the European Parliament that was being addressed by Commissioner Leon Brittan. This was before his trip to Washington to seek these clarifications and interpretations on GATT. I spent an hour and a half listening to him talking about this approach to GATT and I had among my papers the statement issued by the jumbo Council setting out the instructions given to Commissioner Brittan on what he was to look for. It was very clear that he had not the slightest intention of straining himself in the least to try to fulfil even the bland and anodyne instruction given to him by the Ministers. Mr. Brittan was going to Washington for cosmetic reasons so that he could say he had tried. He would come back to another jumbo Council of Ministers meeting and say "I am sorry, gentlemen, Mickie Kantor remains obdurate. There is nothing much we can do, but maybe we can find some way of compensating ourselves internally". He would say that in the sure and confident expectation that the Ministers would all say "Yes, sir; yes, sir; three bags full, sir" and go home and stop rocking the boat. I think that was unpardonable.
Some light began to emerge. The Government began to show some sign that it understood, even dimly, what was about to happen. We then had this grand circus act of the Taoiseach going of last May to meet President Mitterrand. When he came back from the meeting he announced that he had set up a "strategic alliance" with the French to make sure that we got something worth while out of GATT. That was a very interesting episode, not least for the way it showed relations in the Government parties. As it happens, at a meeting of the Select Committee on Enterprise and Economic Strategy of Tuesday, 11 May, GATT came up for discussion. I will now quote from the Official Report of that committee meeting of 11 May, El, No. 1. In column 9 the Minister for Agriculture, Food and Forestry, Deputy Joe Walsh, said:
At international level, the GATT negotiations have not made the degree of progress which some expected late last year. I have to reiterate again that I have considerable difficulty with aspects of Mr. Dunkel's Draft Final Act and with the EC/US Blair House Agreement. I am continuing to press for improvements,...
He goes on to expose the flank again. This "Chocolate Soldier" does not seem to have any concept of how to conduct a battle. Further on he stated:
I also have to recognise that there will be, over the medium term, a move towards freer trade in agriculture and food products. So we have to prepare for this by increasing the competitiveness of our industry.
Translated into the way it would be read in the Commission and in Washington, that would read: Deputy J. Walsh says "I surrender. We know this is going to happen and I am not going to cause you any more problems." I objected to that at the committee meeting and I will not bore the House by reading from the record; but, interestingly, that great wise man of the Labour Party, Deputy Kemmy, took issue with me. In case you did not know it, Sir, Deputy Kemmy has become an apostle of free trade. In column No. 46 of that same report Deputy Kemmy took me to task for objecting to what was going on in the GATT negotiations:
A trade war with America, as advocated by Deputy Dukes, would be suicidal for a small country like Ireland.
That is the genius, this homespun philosopher, the mighty mouse from Limerick who accuses me of wanting to start a trade war with America which would be dreadfully damaging for this country. What happens? After the Taoiseach returns and announces his strategic alliance with President Mitterrand, who is the first out of the traps to congratulate him? None other than Deputy Kemmy. The man who accused me of wanting to foment a trade war by objecting says now that the grand alliance between the Taoiseach and the French President is a great thing, although, mind you, it was supposed to have the objective of slowing down the gathering rush towards giving in to the Americans. I have seen sycophancy in my time but Deputy Kemmy must take the prize, the Nobel Prize in sycophancy.
It would be tedious to go over again the consequences that we can forsee for Ireland in particular and for the European Community in general. What it means is that we will have to decrease the volume of our production of beef, pigmeat, cereals and all the major dairy products and possibly also of sheepmeat in order to accommodate the agreement that has been made with these other countries. The reductions we can foresee in dairy products, for example would be the equivalent of about a further 2 per cent cut in milk quota across the county. The consequences of that are huge. We can see the difficulties that farmers already have from the Minister's failure to get back any of the 4.5 per cent most recent cut in the milk quota, but we will have to deal with a further cut that is half that again. That will put milk producers, particularly small milk producers, into a very difficult position.
What is going on? There are negotiations about what are called "clarifications and intepretations" of these various cuts in export refunds and in the volume of production. That sounds grand. The Minister for Agriculture, Food and Forestry is trying to fool us into believing that this actually means something. What it actually means is that instead of having to bear a big proportion of all the cuts in the first couple of years of the process, the burden will be pushed back to the later years. Instead of being hanged quickly, Irish agriculture will be throttled slowly. That is the only difference. After six years of the measures in this agreement the end result will be the same. It might happen more quickly if there is no clarification and interpretation and a little more slowly and painfully if there is clarification and interpretation. If that is all we have, the situation facing Irish agriculture, our rural communities and our food industry is very difficult.
The Government and its predecessor was always great as saying how much extra employment would be generated by the expansion of our food industry. They were just fooling themselves. There are some Deputies in the Labour benches who know what I am talking about. I spent a part of yesterday morning in a very impressive cheese plant in south west Cork. It employs between 25-30 people on a three shift basis. Ten years ago a plant of this size would have employed between 40-50 people but in four or five years' time the same plant will probably be run by four or five people. While there may be possibilities in expanding our food industry in terms of the volume of production, I would not bet that there is any great possibility of increasing employment. If we have the cuts in the volume of production that are being imposed on us by the GATT Agreement there will be absolutely no chance of increasing employment in the food industries.
The GATT agreement is objectionable for other reasons. It will make farm income more and more dependent on what is known as the cheque in the post. That will make farmers' income more and more vulnerable to the kind of lunacy that was being urged on us earlier this year by the Minister of State in the Department of Finance, Deputy Eithne Fitzgerald. We averted that for this year, but there will be a problem in the future.
This agreement does nothing for the less developed countries. I hope some people on the Government side will see that. Let nobody on the Government side try to blind this House with the proposition that this GATT agreement is the application of free trade principles. At the insistence of the US it excludes sea transport and air transport. The Government made a big enough mess of the whole Shannon issue recently. It also excludes telecommunications and financial services. It is not in any sense a comprehensive free trade agreement and these totally unbalanced provisions on agriculture must be taken out or it will be the worst nonsense ever visited on the European Community and on agriculture in particular.