Anglo-Irish Free Trade Agreement of 1965

The Irish attempt to gain entry into the European Economic Committee (EEC) failed in January 1963 with France's veto of its application, but the government led by Seán Lemass was determined to continue to reorganize the Irish economy in preparation for a world of freer trade. In a classic paradox of Irish trade policy, it was the desire to reduce dependence on the British market that led Ireland once again to seek closer ties with Britain. To prepare Ireland for the eventual entry to the EEC to which it aspired, while expanding its markets in Britain, Taoiseach Seán Lemass sought trade talks with the British government in March 1963. Little progress was made until Harold Wilson replaced Harold Macmillan as British prime minister in November 1964. At a summit of the two leaders in July 1965 it was agreed that a free-trade area between the countries was desirable, and the Anglo-Irish Free Trade Agreement was signed on 15 December 1965. Its preamble firmly rooted it within the context of the principles and objectives of the General Agreement on Tariffs and Trade (GATT), the harmonious expansion of world trade through the removal of barriers, and the continuing progress toward European economic cooperation. For industry it was agreed that Britain would abolish all import duties on Irish goods on 1 July 1966. On that same date Ireland would cut import duties on all British goods by 10 percent—and by another 10 percent each successive year until all industrial duties eventually disappeared in 1975. For agriculture the agreement allowed unrestricted, duty-free access to the British market for Irish store cattle, store sheep, and store lambs, while the Irish undertook to export at least 638,000 head of cattle per annum. In respect of other agricultural products it was agreed that access to the British market would be related to international commodity agreements involving all substantial producers.

Reaction to the agreement was generally positive, though far from unanimously so. There was dissent, even within the government, on the grounds that Ireland was exposing itself to a stronger economy with which it could not compete in industrial trade, and that the agricultural openings presented did not compensate for this. On balance it appears that the agreement was of greater benefit to Britain. The reduction in Irish protective tariffs enabled British manufacturers to increase sales in Ireland, but the agreement did not exempt Irish manufactured goods from the emergency import taxes that Britain imposed to protect its currency, and Irish agricultural exports had to contend with price cuts and quotas that were not foreseen when the agreement was signed. On a philosophical level, the removal of tariffs imposed since the 1930s marked the symbolic end of the dream of national self-sufficiency. The agreement lapsed on the entry of both countries to the EEC in 1973.

SEE ALSO Economic Relations between Independent Ireland and Britain; Economies of Ireland, North and South, since 1920

Bibliography

Daly, Mary E. Social and Economic History of Ireland since 1800. 1981.

Kennedy, Kieran A., Thomas Giblin, and Deirdre McHugh. The Economic Development of Ireland in the Twentieth Century. 1988.

Kennedy, Liam. The Modern Industrialisation of Ireland, 1940–88. 1989.

Maher, D. J. The Tortuous Path: The Course of Ireland's Entry into the EEC, 1948–73. 1986.

Rouse, Paul. Ireland's Own Soil: Government and Agriculture in Ireland, 1945–65. 2000.

Paul Rouse