Minutes of British-Irish trade talks
(Secret)

Discussions between United Kingdom and Éire Ministers

The first meeting between United Kingdom and Éire Ministers to discuss trade relations between the two countries was held in the Dominions Office at 4.30 p.m. on the 30th April 1940.¹

MR. EDEN in opening the meeting expressed the pleasure felt by the United Kingdom representatives at the opportunity which these discussions gave them of welcoming the Éire Ministers and officials to London.

The meeting had arisen out of a suggestion from Éire that the detailed discussions of particular aspects of United Kingdom-Éire trade, which had so far been carried out on a basis of individual commodity, might now with profit to both countries be considered as a whole. The United Kingdom Government fully appreciated this view, and were equally anxious to explore the position in the hope of securing mutually satisfactory arrangements.

MR. EDEN suggested that as regards procedure the meeting then in progress should be devoted to a general exposition of the attitude of both Governments, and that various detailed subjects should then be further discussed at separate meetings between the Minister or Ministers directly concerned on both sides. As a result of such meetings, it should be possible to ascertain the points of agreement and the points, if any, on which differences of opinion still existed. A further general meeting could then be held to survey once again the whole field, in the light of these small discussions and, if possible, to secure a satisfactory general understanding.

On Mr. Eden's suggestion, it was agreed that the two secretaries who had been appointed, one from each side, should collaborate to produce an agreed minute of the meeting which would represent the substance of the discussion.

MR. EDEN then referred to the Anglo-Éire Trade Agreement of 1938,² which was the foundation of present-day trade relations between the two countries and which afforded a sure basis for the continuance of the development of their mutual complementary trading interests. The impact of the war had, however, had inevitable repercussions on these trading arrangements. In particular, the necessity which the United Kingdom Government had found of taking into their own hands the purchasing of all, or practically all, the main commodities which Éire could supply to the United Kingdom had brought about a situation in which further discussions between the two Governments could usefully be undertaken.

The main items of imports from Éire to the United Kingdom were agricultural produce, particularly foodstuffs. The United Kingdom welcomed Éire as a source of supply of part of their essential requirements of foodstuffs. There were, however, certain general considerations governing the United Kingdom Government's purchasing policy which he would summarise.

(a) It was part of the United Kingdom Government's policy to encourage the development of agricultural production in the United Kingdom. This encouragement was directed to certain aspects of production not requiring the importation in excessive quantities of feeding stuffs and other material, since the provision of shipping and foreign exchange for such a purpose presented serious difficulty. It would, therefore, be impossible for the United Kingdom Government to take steps which could be represented as encouraging agricultural production in Éire in directions in which they were deliberately refraining from encouraging it in the United Kingdom.

(b) The price paid to the United Kingdom producer included a substantial sum paid by way of subsidy to encourage production, and this factor would have to be borne in mind in considering the price to be paid for Éire produce.

Apart from foodstuffs, the United Kingdom Government also welcomed Éire as a source of supply for other raw materials, both agricultural products and such materials as metallic scrap.

As regards the supplies required by Éire, the United Kingdom Government were willing to undertake, so far as reasonably practicable, to ensure the supply to Éire of the materials which she required to import from overseas. If these supplies were purchased through the United Kingdom, Éire would obtain the benefit of the reduction in price resulting from combining her requirements with the much greater requirements of the United Kingdom. She would also enjoy similar advantages resulting from the joint use of the shipping which can be secured by the United Kingdom. In return for the imports which Éire obtained from this co-operative buying and chartering, the United Kingdom felt that she should undertake to do all her buying and shipping of bulk commodities through the United Kingdom. In order to make the best and most economical use of the shipping facilities, it was clearly essential that programmes for imports should be worked out well in advance in consultation between the United Kingdom and Éire authorities.

As regards foreign exchange, the currency of Éire was linked to sterling, and Éire's requirements of foreign exchange, therefore, had a direct bearing upon the exchange position as between sterling and other currencies.

In conclusion, MR. EDEN stated that the United Kingdom Government regarded the present war as one being fought by them not only in their interests and those of their Allies, but in the interests of all those in the world to whom freedom and democracy were precious. They recognised, and indeed on their own principles were bound to recognise, that the attitude of the Government of Éire towards the war was a matter for the decision of the Government and people of Éire. They were anxious to maintain and promote good relations with Éire and the benefits of mutual trade between the two countries, but they must always bear in mind the paramount purpose of winning the war and of so arranging their policy as to consider always the interests both of themselves and of their Allies.

MR. LEMASS thanked Mr. Eden most cordially for the welcome extended to his colleagues and himself, and expressed the pleasure which the Éire Delegation in their turn felt at the fact that these discussions were talking place. MR. LEMASS also expressed the thanks of the Éire Government for the help and co-operation which had been extended to Éire in so many spheres by the United Kingdom authorities since the outbreak of the present war. Nevertheless, certain difficulties in the trade relations between the two countries had occurred, and it was with a view to clearing away these difficulties that the present talks had been suggested.

In the first place, Éire was anxious to determine what should be her policy in regard to agricultural production in the conditions created by the outbreak of war. The United Kingdom was the only possible outlet for Éire's exports of agricultural produce, and it was, therefore, of vital importance to Éire to know beforehand the quantities which it was possible for the United Kingdom to purchase of the various kinds of agricultural produce which Éire could export. It was also essential for Éire to know for the same purpose what quantities of feeding stuffs and fertilisers she could obtain to maintain her agricultural production.

The Éire Government fully recognised the advantages which resulted from the elimination of competition through the system of combined purchasing of commodities and joint chartering of shipping with United Kingdom Government Departments. Nevertheless, these arrangements had led to certain difficulties principally connected with the desire of the United Kingdom authorities in some cases to limit the quantities of material which Éire imported. Éire was prepared to accept certain limitations on her imports, but she felt it was necessary to reach an understanding as to the nature and degree of such limitations. She did not feel, for instance, that the same limitations on imports as was imposed in the United Kingdom should necessarily be applied to Éire, where conditions might be different. Similar considerations also applied to the chartering of shipping and the provision of industrial raw materials, all of which he hoped would be the subject of discussion.

DR. RYAN emphasised the difficulty of planning Éire's agricultural economy unless she knew beforehand what quantities of her production she could sell to the United Kingdom. He pointed out that agricultural production could not be expanded and contracted in a short space of time to the order of a rapidly varying market. Éire was, therefore, particularly anxious to know what market the United Kingdom could offer to the Éire farmer in present conditions, and then Éire would be able to estimate her requirements of imported feeding stuffs and fertilisers. It was only if the United Kingdom was able to supply the information desired that Éire farmers could receive proper advice from their Government as to the production policy which they should adopt.

Besides the question of the quantity of agricultural production which the United Kingdom could buy from Éire, there was the equally important question of the price which the United Kingdom would pay for it. The Éire farmer desired some long-term assurance on this point, particularly as since September, 1939, prices paid had frequently been unremunerative, to a large extent as a result of increasing costs of production in Éire and the increased cost of freight, especially on such things as feeding stuffs and fertilisers. Éire could not afford to increase subsidies to her farmers, and she must, therefore, look for a remunerative price in the United Kingdom market. Finally, Dr. Ryan mentioned that a reduction in the value of exports from Éire to the United Kingdom would, of course, mean a corresponding reduction in the value of Éire's imports from the United Kingdom.

MR. BURGIN stated that the United Kingdom already bought a great deal of Éire's production, but he and his officials at the Ministry of Supply would welcome further discussions on the quantities and prices of those commodities produced in Éire in which they were principally interested viz: hides, sheep and lambskins, wool, flax, iron and steel scrap and waste, non-ferrous scrap and waste, and timber. He felt that, provided the prices asked by Éire were reasonable, a mutually satisfactory agreement could be reached as regards these commodities. MR. BURGIN said that he would also welcome discussions as regards those commodities dealt with by the Ministry of Supply of which Éire was an importer, particularly phosphate rock and pyrites.

LORD WOOLTON said that he, like Mr. Burgin, was also a willing buyer from Éire, provided that the commodities concerned were offered at a reasonable price. He expected that there might be some difficulty over the question of price, and in this connexion he would like to emphasise that the United Kingdom authorities had to take into account not only the interests of the United Kingdom consumer, but also the difficulties of the United Kingdom farmer, which were very similar to those described by Dr. Ryan.

SIR REGINALD DORMAN-SMITH³ supported Lord Woolton in his last point. He stated that, owing to the shortage of shipping, the United Kingdom Government had launched a ploughing up campaign with the object of making United Kingdom agriculture less dependent than had hitherto been the case on imported feeding stuffs and fertilisers. With the same object in view, the United Kingdom authorities were urging farmers to concentrate on cattle, as against pigs and poultry. He pointed out that it would, therefore, be impossible for the United Kingdom authorities to make an agreement with the Éire Government which would have the effect of encouraging in Éire, to a greater extent than in the United Kingdom, the kind of production which depended upon imported feeding stuffs and fertilisers. It would, therefore, be necessary to ask that the Éire authorities should in this matter accept equality of treatment with United Kingdom farmers.

SIR REGINALD DORMAN-SMITH also referred to the mutual interest of the United Kingdom and Éire in the supply of store cattle from Éire.

MR. HUDSON mentioned the desire of the Ministry of Shipping that Éire should continue to charter her ships through the United Kingdom, and that the two countries should co-ordinate their import programmes. He also stated that the Ministry of Shipping would like to discuss with Éire Ministers the possibility of making arrangements, in the event of an emergency, for transhipping commodities from ocean liners to coasting vessels in Éire ports;⁴ other subjects which might profitably be discussed were the provision of storage for food and other commodities at Éire ports, and the repairing of merchant ships in Éire.

MR. McEWEN⁵ stated that the interest of Scotland, like that of the Ministry of Agriculture, was to maintain the trade in store cattle between the two countries, and to see that the principle of equal hardship in the distribution of feeding stuffs and fertilisers was maintained as between farmers in Scotland and in Éire.

MR. LEMASS raised the question of the meaning of the phrase 'principle of equal hardship', to which reference had been made by several United Kingdom Ministers. He claimed that in some respects the hardships which had been inflicted on Éire by the present war were even greater than those which had been inflicted on the United Kingdom, and mentioned in this connection the unemployment situation in Éire. He considered, therefore, that it would not be fair to insist upon the application of equal hardship in every detail to Éire. Moreover, it had to be remembered that the Éire primary producer at the time of the outbreak of war was at a lower level of prosperity than the United Kingdom farmer, and allowances must be made to redress this position.

It was agreed that discussions between Mr. Lemass and Dr. Ryan and appropriate United Kingdom Ministers on detailed subjects should proceed without delay, and that a further general meeting should be arranged for the afternoon of Friday, the 3rd May, at 4.30 p.m.