Dáil Éireann debate -
Wednesday, 15 Dec 1954

Vol. 147 No. 11

Supplementary and Additional Estimate, 1954-55. - Imposition of Duties (Confirmation of Orders) (No. 2) Bill, 1954—Second and Subsequent Stages.

Minister for Industry and Commerce (Mr. Norton)

I move that the Bill be now read a Second Time. This is the customary Bill to give effect to the imposition of certain Orders which are made from time to time and which must be confirmed by subsequent legislation. The purpose of the Bill, as set out in the explanatory memorandum which I have circulated to Deputies, is to confirm eight Orders made by the Government under the Emergency Imposition of Duties Act, 1932. One of these Orders, entitled—Emergency Imposition of Duties (Finance Act, 1954) (Consequential Provisions) Order, 1954—provided for amendments in certain customs duties consequent on the termination of other customs duties in the Finance Act, 1954. These amendments did not impose any new duty provisions. They were necessary so as to prevent anomalies arising in duties which were related to the duties terminated in the Finance Act. The commodities covered by the remaining seven Orders are as follows:—drive screws and drive screw nails; metal coffin mountings; disinfectants, antiseptics, insecticides, verminicides, vermicides, fungicides and weed-killers; fireside companion sets; felt hats and caps for men or boys; electric smoothing irons; knitted woolen cardigans, pullovers, jerseys, blouses and similar articles.

The customs duties imposed on drive screws and drive screw nails and on fireside companion sets are new protective duties. The firm engaged in the production of nails and screws extended its production to cover drive screws and applied for and was granted protection for this development. In the case of fireside companion sets the production of these articles was undertaken for the first time and a very wide range of sets at reasonable prices was put on the market by the firm concerned.

In the case of metal coffin mountings the Order extended the scope of the duty already in existence so as to include partly manufactured mountings and component parts of mountings. The object of this Order was to stop the practice which was developing of importing partly manufactured articles to the detriment of an existing firm which was carrying out the complete range of manufacturing operations.

The Order dealing with disinfectants, etc., provided for a customs duty on disinfectants, antiseptics, insecticides, verminicides, vermicides, fungicides and weed-killers. These goods, other than antiseptics and weed-killers, had previously been subject to customs duty, but the duty was suspended in 1942 for supply reasons. Owing to difficulties of definition a number of items not being manufactured here became subject to duty under this Order and, following consultation with the Irish manufacturers and with the Department of Agriculture, arrangements were made for the issue of duty-free licences for articles which the Irish manufacturers are unable to supply or for which suitable substitutes are not available from home sources.

The Order dealing with felt hats and caps for men and boys provided for an increase in the minimum rates of duty already chargeable on these articles, as the existing rate of duty had proved ineffective in protecting the Irish factories against imports of cheap hats.

In the case of electric smoothing irons, the customs duty already in existence covered irons up to 7 lb. in weight. The present Order increased the dutiable weight limit from 7 lb. to 8 lb. The reason for this was that certain importers were evading the duty by bringing in irons weighing slightly over 7 lb.

The Order dealing with knitted woollen cardigans, pullovers, jerseys, blouses and similar articles provided for an increase in the customs duty already chargeable on those articles. The Order was made following a review of the operation of the customs duty and of the quantitative restrictions on the importation of the articles, carried out by the Industrial Development Authority under the terms of the Anglo-Irish Trade Agreement.

Mr. Lemass

The only Order under the Bill with which I should like to deal at this stage is that concerning knitted woollen cardigans and similar garments. This Order, which imposes a customs duty, coincides with another Order in reference to the quantitative restrictions previously imposed on the imports of these goods. There is a considerable amount of opposition from the manufacturers of these goods and many expressions of apprehension as to the effect upon the knitted garments industry in this country. The manufacturers concerned of course should have known that the quota restrictions on the imports of knitted garments were only of a temporary nature having regard to the provisions of the Anglo-Irish Trade Agreement and that its replacement by a tariff was inevitable at some stage. The rate of duty proposed in the Order should be adequate to protect the Irish manufacturer in normal circumstances. Indeed it would be regarded by everybody here as a serious matter if the manufacturers of these garments were yet to avail of the full 40 per cent. protection that they now enjoy. We have here in this country the problem of a small market adjacent to a great industrial area suffering from the possibility of surplus stock being sold off here at less than the protective costs. What might be a very small surplus in the hands of British manufacturers would be a very large amount here.

It would be a very large proportion of our total requirements, and the production of manufacturers here could be upset for a very long period by the importation of substantial quantities of cut price goods sold under normal trade conditions in Britain and representing a very small part of the production of the manufacturers there. There is a feeling among the manufacturers here that 40 per cent. might not be a sufficient protection against dumping of that kind and that their production from time to time might be upset by reason of those exports. The Minister should be able to see that if there were abnormal imports of these goods, if there was a claim that the rate of duty was not sufficient to allow manufacturers here to compete against these abnormal imports, he would avail of the clause which would enable him to re-apply quantitative restrictions. There may be some possible ambiguity about the application of the clause in different circumstances, but there has been a withdrawal of quantitative restrictions and any rate of duty must be regarded as being less effective equivalent than a quantitative restriction Order. There is also a cause for apprehension among these manufacturers about the possibility of goods being delivered here at very low prices from Far Eastern countries. Some of them have said to me that they were most apprehensive of the possible effects of the withdrawal of the quota restrictions in regard to Far Eastern countries; that they were more apprehensive about it than they were about its effect on imports from Great Britain. I think it would allay a great deal of apprehension if the Minister would say that in the event of trade statistics revealing the importation of abnormal supplies of these goods he would impose quantitative restrictions.

Many of the apprehensions expressed by the manufacturers concerned seem to me to be exaggerated. But these two matters to which I have pointed should be carefully considered. There is the danger of abnormal imports from Great Britain of surplus production at small cost which could upset manufacturing conditions here for quite a long time. As far as the trade agreement is concerned, I cannot see why quantitative restrictions cannot be imposed if only for a short time. There is then the second danger from imports of these goods from countries other than Great Britain. There is nothing at all to prevent the operation of quantitative restrictions as far as they are concerned.

Mr. Cunningham

In East Donegal, where knitting is carried on extensively, and where during a good number of years valuable employment has been given, there is serious danger from imported materials. I want to bring to the Minister's attention the very serious situation that has developed as a result of the change-over from quantitative restrictions to a higher rate of duty. The higher rate of duty has not had the same debarring effect as the quantitative restrictions had, with the result that unemployment is cropping up among the people engaged in the industry throughout the county. Deputy Lemass has pointed out what might be one of the reasons for that—that outside goods can be imported from places where there may be overproduction. These people can afford to dump that overproduction into this State and may be able to suffer the effects of a higher rate of duty. If the quantitative restrictions had been in operation they would not be able to do that. We have in Donegal for the first time in a good number of years a slump in the trade. Many of the knitting firms who give out knitting to individuals in their homes have stocks on hand which they cannot clear. There may be another factor entering into this situation other than this one but it is certainly one of the factors which is causing a glut in the knitting industry in Donegal.

I think the Minister had representations made from the Federation of Irish Manufacturers or some other body interested in this matter and if he had those representations made to him and if he has considered them would he say what is his opinion? Anyhow my own opinion is that it would be very wise for a further period to re-introduce quantitative restrictions.

Mr. A. Barry

I think the Minister ought to be very careful in this matter. I have never worn anything but Irish made clothing since I was a boy, but if I felt that people could not work inside a 40 per cent. tariff wall, it would be a matter for uneasiness. The tariff is very high at 40 per cent. and restoring the quota system would mean that there would not even be that 40 per cent. compulsion on Irish manufacturers to meet the foreign article plus 40 per cent. and prices would become too high for many of our people who have too little.

Mr. Norton

There is a background on this question of duty on these particular commodities. The position briefly is that in 1952 the manufacturers of these commodities represented to the Minister, or, I think to the acting Minister at the time, that they were in danger of being submerged by abnormal imports and they represented at the time that the position of the industry threatened to become really precarious. As a result of the representations then made to the Minister steps were taken to impose quantitative restrictions. These quantitative restrictions were imposed in 1952 but, as Deputy Lemass has rightly said, it was known to the trade that that was only a temporary measure and that once those quantitative restrictions were imposed in what might be said to be a rather unusual way at the time, it was only a matter of time until the British authorities would ask for a review of the quantitative restrictions, and in fact as was then believed would happen, the British authorities did ask for the review of the quantitative restrictions. In January, 1953, they were informed that so far as the Minister was concerned he was prepared to remove the restrictions if the British authorities would agree to an increase in the rates of duty. The British said: "Well, whatever review in that respect is to take place should take place as is provided for under the agreement"—the Anglo-Irish Trade Agreements of 1938 and 1948—and the review took place. The review was carried out by the Industrial Development Authority. That was the body which heard the case from the point of view of Irish manufacturers and heard the opposition to that case from the British interests concerned. It was as a result of that review and as a result of a recommendation made by the Industrial Development Authority that the present scale of duties was imposed.

Again as Deputy Lemass has rightly said, the Irish manufacturer is getting a protection of 40 per cent. in this field. None of them has attempted to show that 40 per cent. is not adequate in normal circumstances. I think anybody who has examined the situation realises it is adequate; in fact they are not using the 40 per cent. tariff and I would be disturbed, and I am sure the Opposition Benches would be likewise disturbed, if after having established these industries so long ago they could only be kept alive to-day by utilising to the full a 40 per cent. tariff. In fact they are not utilising that 40 per cent. tariff. That is in their favour and is of advantage to the people. It is only by cutting back on the necessity to use tariffs that we can ever get the industry geared up to a level of efficiency.

I do not think, therefore, anybody need worry at all about the industry from the point of view of its ability to operate under the present scale of duty. What is a matter of concern is a possibility that if there was a slump in Britain, or if there was any pressure on a large number of manufacturers in Britain for financial or other reasons to get rid of their stock, they might decide to unload that stock here because it is a convenient market. A menace might arise from that source from the standpoint of the Irish manufacturers, and I think we must frankly meet that if it does not arise. We cannot allow articles dumped by British manufacturers in this market to imperil the existence of Irish industry or to put Irish workers out of employment. I have caused the Department to tell the manufacturers concerned who were recently in the Department that so far as I was concerned I would deal with that situation if it ever arose. I do not think we are helpless if we were faced with the problem of dumping from British sources here, and anybody who tries to dump goods into this market at prices substantially below those at which they are sold in the British market must I think be told clearly without equivocation that if they do so, and the effect is to threaten the existence of an Irish industry or threaten to put workers out of employment, we will take immediate and effective steps to protect Irish industry against that type of unfair competition. I think that assurance to the manufacturers should put the matter beyond any doubt.

On the question of imports to this country from the Far East a complaint was recently made about imported gloves from Hong Kong. In fact the gloves may never have been made in Hong Kong at all. They may have been made somewhere in the Far East and just stamped with the Hong Kong stamp which has the advantage of getting those goods a special method of entry to the British market and to other markets to which certain preferences are given for goods made in certain countries. The moment that was brought to our attention we decided to take effective action in the matter and the position of safeguarding Irish industries from that cheap type of Eastern manufacture is being actively discussed at the moment with the organisation which represents those who produce a similar type of goods in this country.

I agree with Deputy Lemass that whatever impediments there may be to the imposition of quota restrictions under the 1948 agreement in respect of British goods I do not think there are any which prevent us operating restrictive quotas in respect of goods produced elsewhere, except perhaps the tendency of the recommendations made by O.E.E.C. which urges that there should not be particular discrimination against the products of particular countries, and that there should be a uniform code of legislation which treats all except those getting the most favoured nation treatment on the same basis.

Mr. Lemass

O.E.E.C. is still only European.

Mr. Norton

That is true, but some European countries have Eastern associations and you might discover the same gloves bearing a stamp and that had been manufactured nearer home than Hong Kong. However, I think that point is really only academic because we have the power to deal effectively with any of those menacing imports from the Far East, and I think the assurance I have given in respect of dumped goods from Great Britain ought to satisfy the manufacturers concerned.

Question put and agreed to.

Agreed to take Committee and Final Stages now.

Bill passed through Committee and reported without amendment.

Question—"That the Bill be received for final consideration"—agreed to.

Question proposed: "That the Bill do now pass".

Mr. Lemass

One of the points made by the manufacturers is that they are at present paying higher prices for knitted garments than manufacturers in Great Britain. I think that is so. So far as I recollect the arrangements made with the yarn manufacturers that can only be due to the high cost of woollen tops. I think the Minister should give that some attention. I do not think it should cost more to produce wool tions in this country than in Britain. It is a considerable disadvantage to the Irish manufacturers if they have to pay more than the British manufacturers have to pay for wool tops. If the Minister goes into that, he would perhaps find the causes and these could be remedied. That would enable the articles to be made available here at prices comparable with the British prices.

Mr. Norton

I shall have that considered.

Question put and agreed to.