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World Trade Agreements

Volume 404: debated on Thursday 8 May 2003

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What plans he has to raise world trade agreements at the next meetings of the (a) IMF and (b) World Bank. [111887]

In my capacity as chairman of the international monetary and financial committee—the governing body of the International Monetary Fund—I will seek to ensure that, just as trade was discussed in our April meetings, it will be considered at the annual meetings of the IMF and World Bank in September, and in the sessions on the global economy and the needs of low-income countries.

I am grateful to the Chancellor for his response. It is widely recognised that nobody has done more internationally than him to push the case for the poorest people in the poorest countries, but does he accept that trade is probably the best mechanism that we can offer to those people in order for them to join the world economy? Does he accept that the IMF's historical pursuit of the case for the destruction of protections for infant economies has been disastrous for the poorest people? We need to bring the poor into the world economy, but the way to do so is by recognising the fragility of their economies and the need for real assistance from powerful economies in Europe and north America.

I am grateful to my hon. Friend, who has taken a wide interest in all the issues affecting developing countries. He will agree that the benefits of a successful trade round could be between $250 billion and $400 billion a year for the world economy, a third of which would go to the poorest countries. So that would be a major injection of resources and make possible the development of these countries. He will also agree that, although it is true that structural adjustment policies have, in the past, been very damaging to some of the poorest countries, the IMF has now changed its policy on these issues. We now have country and civil common ownership of poverty reduction strategy programmes, which—in partnership with the World Bank—are the means by which trade issues, health, education and other economic development matters can be considered together. I hope that the whole House will support the IMF and the World Bank working more co-operatively to make those programmes work in order to secure over the next few years and, ultimately, by 2015, the halving of world poverty.

I welcome the Chancellor's statement, but does he share the concern of the Trade Justice Movement that more needs to be done, particularly by the developed countries, which often protect their own industries and farming communities at the expense of the developing countries?

I am grateful to the hon. Gentleman. In thanking people for their work on development issues, I include those in all parties who have taken them up. The hon. Gentleman is right that the Trade Justice Movement, which brought thousands of people to the House of Commons a few months ago and is organising a major event in a few weeks' time, has put on the table a set of issues that the developed world must now address. The European Union initially made an offer to the 49 least developed countries of duty-free and quota-free access for all products except arms. That offer is still to be taken up by some developed countries, which should support it. Equally, I agree with the hon. Gentleman that the EU should also respond to the American offer of the past few months to remove the remaining barriers, especially those of agricultural protectionism.

Earlier this week the European Union held a conference attended by representatives from developing and industrial countries on the future of the textiles and clothing industry after the phasing out of the multi-fibre agreement and the Doha round, which seemed to show that China would be the main winner at the expense of some developing nations and our own industry. In that light, will my right hon. Friend discuss with his colleagues at the Department of Trade and Industry whether any further help could be given to our own industry to remain competitive in world markets, and to invest in new technologies and training? That is necessary to maintain the industry in line with the work of the national industrial strategy drawn up by the industry with the Government.

I know of my hon. Friend's work in her constituency and beyond in putting the case for the textile industry. It is important that the Department of Trade and Industry and other Departments help the textile industry as it moves towards high-quality and high-technology products. We will continue to provide help with investment, regional development grants and training. I hope that the regional development agency in my hon. Friend's area will continue to take seriously the needs of the textile industry. The fact remains that in her constituency and many others, the number of jobs is still rising. As to trade agreements around the world, we have four blockages that affect industries in many of our constituencies. There are continuing problems with agriculture and services, which need to be addressed, and many hon. Members will know of problems relating to pharmaceuticals, with poor countries being denied drugs at prices that they can afford. It is urgent to make progress on that, because lives are being lost unnecessarily as well as damage done to trade.