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Seanad Éireann díospóireacht -
Thursday, 11 May 1933

Vol. 16 No. 18

Trade Agreement with South Africa. - Motion of Approval.

I move:—

That the Seanad approves of the Trade Agreement between the Irish Free State and the Union of South Africa signed at Ottawa on the 20th day of August, 1932, the text of which is contained in the Report of the Imperial Economic Conference held at Ottawa, 1932 (Supplementary Volume), laid on the Table of the Seanad on the 30th day of November, 1932, and recommends the Executive Council to take the necessary steps to ratify the said Agreement.

An Agreement has been made between the Irish Free State and the Union of South Africa involving some customs arrangements, and I ask the sanction of the Seanad now for that Agreement, as I think it is necessary. The matter is very simple and will not require much discussion. The facts in connection with it are as follows:—The two Governments concerned in this Treaty agree to allow to each other tariff preferences specified in the Schedule to the Agreement. The Union of South Africa agrees to give the following preferences:—Hosiery of all sorts five per cent.; tractors and parts, ten per cent.; stout, 6d. per Imperial gallon. The Irish Free State on the other hand agrees to give the following preferences:—Currants, one sixth of the full rate; raisins and other dried fruits, one sixth of the full rate; canned fruit, one sixth of the full rate; wine not exceeding 30 per cent. of proof spirit, 40 per cent. of the full rate; wine exceeding 30 per cent., but not exceeding 42 per cent. proof spirit, 33? of the full rate. In addition to that there are certain other allowances:—Sparkling wine, in bottle, 30 per cent. of full rate; still wine, in bottle, 50 per cent. of full rate; maize meal, 100 per cent. of full rate.

I conclude that means no charge at all, but, however, the Minister will explain that. Preferences granted under the Treaty by the Irish Free State to South African goods involve no change in existing tariff arrangements except in the case of maize meal. There is, at present, on maize meal a full duty of 9/- and a preference of 6/- per cwt. This duty is imposed under the Emergency Imposition of Duties Act. Under the Cereals Bill, when it becomes law, the importation of maize meal will be prohibited except under licence. When that legislation comes into force it is understood to be the intention of the Department of Agriculture that the Emergency Imposition of Duties Order, imposing a duty on maize meal, will be revoked, and that reliance will be placed, so far as maize meal is concerned, on the prohibition contained in the Cereals Bill. Arrangements will, presumably, be made by which no barrier will be placed in the way of the import of South African maize meal under licence in order to give full effect to the spirit and letter of the Treaty.

I beg to second the motion.

What are the conditions applying in regard to the article with which I am connected? Is that to get any concession?

Cathaoirleach

No concession is given on whiskey.

I would like to hear something as to whether we are to get the same concession in regard to imports into South Africa that the British are getting. We have been for some six months pressing this question with regard to New Zealand, where there is a 3/6 import duty on Irish whiskey which does not exist in regard to Scotch whiskey. So far we have failed to get any satisfaction whatever in regard to that. Apparently now, in regard to this Treaty before us, the manufacturers of whiskey are to get nothing at all. I should like some information from the Minister as to what the duties are at present, and whether the concession that is given by South Africa to Scotch whiskey is going to be extended to Irish whiskey. I am inclined to believe that a special arrangement has been made by the British with South Africa by which Scotch whiskey is allowed in under special conditions, and I would like some information on that point. I know one positive case where we are disqualified, and I know of no particular agreement made by our Government except with Canada, where we are allowed the same terms as the British. I want to know what has been done here in safeguarding our interests in this matter?

Much on the same lines I would ask the Minister how we stand with regard to the other Dominions in regard to the articles mentioned here. I think on the last occasion he told us that at Ottawa there were no fully accredited delegates of the other Dominions and that, while efforts were made to reach agreement, and while he hoped agreement would be reached, they had to be referred direct to the respective Governments. I do not want him to make a statement if it is not opportune to make it, and I do not want to press him to do so, but I know that whiskey is not the only thing we export. There are other trades that are affected in the case of New Zealand in which we are definitely interested. I should also like to know the reasons why the procedure in the case of South Africa, which one would have hoped would have been very definitely friendly to us, was different from that which we made with Canada. The Canadian Treaty was extremely simple, and, while it did not give us anything that our neighbours across the water do not get, it did protect us definitely against Canadian favouritism towards British produce.

Whether we like it or not, most of our exports here are really competing with Great Britain. There is comparatively little competition with any other country, and, therefore, taking it all round, the most satisfactory thing that we can get in the way of protection for our exports at the moment is to be sure that we will get nothing which will give a preference to British goods against ours. That was achieved in the case of Canada and was, to my mind, as satisfactory as we could possibly have expected. It was too much to expect Canada to give us preference over Britain. I, frankly, am disappointed that we did not get the same at least from South Africa, and it does seem that, while we have made certain concessions, and fairly good concessions, in spite of the fact that, according to Senator Colonel Moore, there is a definite snag in some of them, we do not seem to have got very much. The concessions we got deal mostly with things we are sending to South Africa, but there are other products which we export and which we might very well send to South Africa, if we had some preference.

It does seem to me that this agreement leaves the British Government in a position to use pressure in South Africa to give special concessions to British goods, and we, not being in a position to use the same kind of pressure, will not get the benefit, whereas, in the case of Canada, any pressure that is brought to bear need not worry us, because we know that for a number of years we are protected, we must get any preference given to Great Britain.

Senator Parkinson remarked here once or twice that the bloodstock going into South Africa have to pay a tariff of £100 per head. I want to ask the Minister if that fact was adverted to when the arrangements were made, and if any efforts were made by him to get a preference in that respect? A tariff of £100 on a thoroughbred horse or mare is a tremendous tax, and, as we are making a trade agreement, we ought, if possible, to remove a tariff of that sort in order to give these breeders an opportunity of extending their markets. There was, at one time, a considerable market in South Africa.

I wonder if the Minister could tell us what are the South African tariffs on the commodities in respect of which we get preference? I notice that we get five per cent. on hosiery, ten per cent. on tractors, and so on, but, if there is a very high tariff, say 40 or 50 per cent., on these, it seems almost a negligible preference. I should like also to know—I have not the figures before me—what are the trade relationships between South Africa and the Saorstát. What are the relative amounts of our exports to South Africa and our imports from them? Do they favour us or otherwise? The maize meal conundrum wants some explanation. It is extraordinarily complicated as attempted to be explained by Senator Colonel Moore, and I think the Minister might explain it to the House.

It is not possible to give any definite figures with regard to the trade between the Saorstát and South Africa. The figures available in our trade and shipping statistics relate only to goods which are consigned direct to us from South African ports but it is reasonable to assume, and, in fact, we know it definitely to be the case, that the bulk of the goods which come to us from South Africa come via Great Britain, just as the bulk of the goods we export to South Africa go through Great Britain. In relation to that trade, we have no figures at all. Various estimates have been prepared and they show that the trade, heretofore, has, generally speaking, been in favour of South Africa although in particular years that might not have been the case. There have been considerable fluctuations in trade as between one and another particularly with regard to maize—I refer to whole maize and not maize meal. The Treaty which it is proposed to ratify is one that was prepared in circumstances which did not permit of as full a review as might have been possible of the various matters in which the trade between the two countries could be facilitated. Although attention was given to a number of possibilities, the time available and other difficulties prevented the inquiries being made amongst interested parties in each country as to the effect of the various alterations in duties which were proposed by one side or the other, and, consequently, it became necessary to conclude an agreement which referred only to a limited number of articles but in the expectation that the existence of that agreement would furnish us with a basis on which to build at later periods.

Our experience has been that the Government of the Union of South Africa are very willing and anxious to extend trade relations with the Saorstát and, on another occasion, I am sure it will be possible for us to secure other arrangements which will enable trade to be improved in other articles between the two countries. I may say that the definite matter of the export of horses from the Saorstát to South Africa was fully discussed, but the representatives of the Union of South Africa were not in a position to offer any tariff concession in that regard. Heretofore, the position has been that we got no preference whatever from South Africa. As I think I explained in the Seanad before, none of the States members of the Commonwealth was willing to agree to a general preference system between all members. South Africa, particularly, heretofore, gave no preference except to Great Britain or in consequence of definite agreements entered into which secured for South Africa concessions in return for concessions given. Following the implementation of this Treaty, we will get a tariff concession from South Africa for the first time and the practice here will also have to be changed but will be changed in the opposite direction.

Heretofore, the Saorstát has given substantial preferences on all duties to goods which were produced in Commonwealth countries irrespective of whether we got anything in return for the giving of those preferences. Because of the situation that has developed as a result of the Ottawa Conference and the very definite indication of policy given by the different Governments represented there, it will be necessary for us to revise our attitude and to take the position that we will give concessions only where we enter into definite agreements to give them in return for definite concessions granted to us. The position regarding the three articles in respect of which a preference is given is this: the South African duty on hosiery, socks, stockings, underwear, and the like is 15 per cent., and on pullovers and jerseys 20 per cent., while the preference given is five per cent. At the present time, there is no preferential duty applicable to tractors entering the Union of South Africa and the effect of the Treaty is to secure for us a preference of ten per cent. for the first time. The duty on stout in South Africa is 2/3 per gallon and the effect of the Treaty is to reduce the duty on Saorstát stout to 1/9 per gallon. On the other hand, the various items in which we are concerned do not necessitate any change in the tariff schedules here. The preferences which are given have been given in the past and we merely contract to continue them for the duration of this Treaty.

As regards maize meal, the position is much as described by Senator Colonel Moore. The 100 per cent. preference can be taken to mean that no Customs barrier will be imposed to the importation of maize meal from South Africa. Another interpretation is possible but that is the interpretation to which we can adhere. Of course, any maize meal which is imported from South Africa will have to be sold in accordance with the law prevailing here at the time, and, in so far as that law places a certain restriction on the sale of maize meal as such, South African maize meal will be subject to this restriction the same as home-produced maize meal. The existing duty will, of course, be repealed in the near future in consequence of the passage of the Cereals Bill, which defines the conditions under which maize meal may be imported in any event, but the Act will be administered in accordance with the spirit of this Treaty, that is, to give a very definite preference to maize meal, if any, consigned to this country from South Africa.

With regard to the other points raised, I am not in a position to state what is the duty on spirits consigned from Great Britain to South Africa. The Treaty which was concluded between Great Britain and the Union of South Africa at Ottawa makes no reference to spirits and, presumably, no change in the pre-existing position has been effected since. At the present time, we are taking up with the Government of South Africa the question of the duty which has been collected by the South African Government and which was imposed in March last as an exchange compensation tax. We are maintaining that, because the Government of South Africa has since departed from the gold standard. The retention of that tax is no longer justifiable and should not, in future, apply to Irish spirits. Discussions on that matter are in progress at the moment but what the outcome is likely to be I cannot say. I do not know whether it would be in order to discuss the position vis-á-vis New Zealand or other States, but no change has taken place since I spoke here on the Canadian Treaty. I, perhaps, did not quite appreciate, when at Ottawa, and when we agreed there to carry discussions to a certain stage and then postpone them for resumption after the conclusion of the Conference, the difficulties that arise when one tries to conduct negotiations of that order with Governments situate on opposite sides of the globe.

The distance constitutes a difficulty, but there is no reason to believe that the tentative agreement which we reached, I think, in every case at Ottawa, will not be ultimately embodied in a trade agreement of the same kind as those concluded with Canada and South Africa. In the meantime I do not anticipate that any substantial change to our detriment will take place. The particular matter to which Senator Jameson referred concerning a differential duty against Saorstát whiskey in the Dominion of New Zealand is being examined, and certain discussions with representatives of the New Zealand Government are in progress. Whether we will be able to secure definite concessions in that regard will, I think, depend on the value of the concessions we can give in return. I have no doubt whatever that the concessions we are at present giving to the products of New Zealand here are of sufficient importance to them to justify an effort on their part to retain, by giving us certain concessions in return. This Treaty with South Africa can be regarded not so much as a final document fixing trade relations between the two countries for all time, or for five years, but as a beginning of the establishment of those relations in treaty form which can be elaborated on, and which, I have no doubt, will be elaborated upon, when occasion and opportunity offer for the bringing on of new commodities subject to these terms, one way or another.

May I take it from the last statement of the Minister that any exporters here who feel that they can benefit by concessions of the kind in any of the Dominions can make representations to him?

I would be very glad if they would. As a matter of fact we have received from time to time representations from exporting firms, and also from importing firms, in South Africa and in other countries, who are willing to assist in extending the market for Irish goods in these countries, and occasionally we have been able to do a certain amount of good by putting the parties into touch with one another. Any firm interested in the export trade in any of these countries, or in fact in any country, should maintain contact with my Department, because from time to time we will be able to have valuable assistance and certain information concerning Customs duties and other difficulties.

I did not quite understand what the Minister said about horses. He mentioned that no concessions could be given for horses.

I have some experience of that matter. I happened to be in South Africa in 1922 and I found that practically all the horses there were foreign horses. For some reason or other racehorses are not bred in South Africa. At that time most of these horses were Irish horses. Although I was there for a different object I was asked on my return to Ireland to buy racehorses and to send them out. I explained that I was not a horse merchant and that the buying of racehorses was an extremely difficult job. That shows that some trade in horses should exist in South Africa. It certainly seems extraordinary, if it is correct, that there should be a duty of £100 per head on horses, considering my experience there. Perhaps the Minister would be able to give some explanation.

I can give no explanation. The South African Government has a duty on horses. They stated that they would maintain it and that it would not be possible for them, because of domestic policy, to modify the duty.

Is there a duty on horses from any country?

From any country. It is not a duty on horses from the Saorstát alone.

It applied mostly to racehorses, and they are nearly all Irish horses.

Irish racehorses are still going there. I was looking at the Trade Statistics, and while the numbers are not large the values were not inconsiderable, having regard to the total trade. Trade statistics have to be taken with due caution because of the considerations to which I have referred, but they show that racehorses constitute the largest single item and the largest export to South Africa from the Saorstát, despite the duty.

As the duty is uniform of course it differs, but this country supplies the best horses.

I suggest to the Minister that it would be of the greatest benefit if we knew the people in countries like South Africa who negotiate these trade agreements. We have representatives there but apparently there is no one on the spot that they have been able to get in touch with who would put the case, as local men can put it, to the Government. We have tried to get in touch with such people in New Zealand and we have not succeeded. A cousin of my own represents our firm there, and he has written asking to be told who was putting up the case for the Free State with the New Zealand Government. I have never succeeded in hearing who was doing so.

The only direct contact we have is through the High Commissioner in London. There is no resident representative of the Saorstát in South Africa or New Zealand. The discussions are conducted through the High Commissioner in London.

We can take it that we have no local touch at all except through the Department in London.

I am sorry to say much will not be got so.

I may say that as far as the Department of Industry and Commerce are concerned they would welcome very much the appointment of local representatives in New Zealand, South Africa and other countries, but the Department of Finance have a lot to say to that. We have not succeeded in getting their consent yet.

I believe in trade representatives and I say they would be useful. We know what Consuls do. The Free State Government should pick out someone on the spot to whom in cases like this people could go to find out information. It would not cost much. Nearly every country has Consuls here, and if we had someone in the Dominions representing us it would undoubtedly help, because local people could get in touch with the Governments of other countries and that would be of great assistance.

I understand that the Department of External Affairs, for reasons of their own, have a pronounced objection to the appointment of honorary Consuls in such places, such as other Governments have. Some of these objections are obvious. It is a matter which might definitely be considered in relation to the general position concerning the representation of the Saorstát abroad. The matter is under consideration at the moment, because our experience has been that trade follows representation to a large extent, and that the development of these markets must be preceded by the creation of representatives of some kind. I can assure the Senator that the matter has not been overlooked.

Are we to understand from the Minister that all negotiations between other Dominions and the Free State are conducted through the High Commissioner in London with the Commissioners for other Dominions in the same place?

No; discussions in relation to the Treaty matters initiated in Ottawa were conducted in London.

Other negotiations are conducted direct with the Dominions?

Question put and agreed to.
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