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World Trade

Volume 406: debated on Thursday 5 June 2003

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What recent discussions she has had with the World Trade Organisation on the impact of international trade liberalisation on the relief of global poverty; and if she will make a statement. [116510]


What action she is taking to promote the interests of developing countries in the world trade round. [116511]

I welcome the reaffirmation by G8 leaders earlier this week of their commitment to a successful conclusion of the Doha development round, which would bring significant benefits in trade to developing countries. That is why we are working so hard to make progress in the WTO talks. In addition to the visits that I have recently made to South Africa, India and Thailand, I have today accepted an invitation from Christian Aid to meet producers and farmers in central America, on our way to the WTO meeting in Cancun in September.

My right hon. Friend the Member for Tyneside, North (Mr. Byers) said that current free trade orthodoxy is wrong in forcing poor countries to open up their markets to competition, and in reducing their Governments' protection of vulnerable industries. Does the Secretary of State agree with her predecessor that the World Trade Organisation rules of international trade are indeed stacked against poorer countries, in favour of fat-cat multinationals? Would not managed trade with a focus on poverty reduction be a better alternative? Why can the scales on ministerial eyes be removed only with a P45?

Since I became Secretary of State I have said that it is essential that market opening in developing countries is phased to take account of their state of development, and that the liberalisation of markets is accompanied by effective regulation. We saw the effects of the lack of such regulation in the financial disasters in some developing countries a few years ago. However, I do not agree that subsidies and long-term protectionism are the way forward for developing countries. It is important that we in the developed world listen to the increasingly urgent pleas of developing country Governments themselves—and their producers—who want access to trade, and in particular to trade on free and fair terms with the developed countries. The developing countries would also benefit from reducing the tariff barriers that they put up against one another.

The WTO is a rules-based organisation, and one of the key ways of helping developing countries is to provide capacity building to empower them to play by those rules. The most significant current issue is the EU agricultural meeting later this month. The fact is that the best thing that the EU could do is to reform the common agricultural policy, in particular by removing export subsidies that effectively prevent developing country farmers from accessing overseas markets. Can my right hon. Friend assure me that she will do all in her power to press the EU on that point?

I completely agree with my hon. Friend, and I have been working closely with my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs to that end. Our Government are the leaders in pressing for radical reform of the common agricultural policy across the European Union. Not only does the CAP cost the average European family of four an extra £475 a year on our food bills, but as my hon. Friend rightly says, it condemns farmers in the poorest countries of the world to absolute poverty. Commissioner Fischler's proposals on CAP reform provide an excellent opportunity to move that agenda forward, above all for the sake of producers in developing countries. I hope that the Agriculture Council will seize the opportunity and agree those proposals next week.

Will the Secretary of State tell us where she will be on Saturday 28 June? Will she be in her constituency, as I will, supporting trade justice day and her constituents who are making a real effort to draw to the Government's attention the failures of the world's developed community in that respect?

Does the Secretary of State not accept that the liberalisation of agriculture is, as we have heard, a potentially double-edged sword for developing countries? The Government of the Philippines, for example, have argued that opening up markets to the large agribusiness conglomerates of the western world could undermine local food production systems in the developing countries.

When I last met the Trade Minister for the Philippines, his main concern was to ensure access to European markets for their canned tuna exports. That was a major issue, as the hon. Gentleman may recall, at the discussions in Doha. The main issue is to ensure that the European Union and the United States stop preaching free trade abroad while practising protectionism at home. The WTO rules already permit "special and differential treatment", to use the jargon, so that developing countries can open their markets in an appropriate fashion. That is the way to proceed and, with the majority of WTO members being developing countries, that is how we can proceed, providing that we in the European Union and the United States face up to our own responsibilities

My right hon. Friend will know that protectionism is regarded nowadays by the international community not as a 13-letter word but as a four-letter word. How can we ensure that the same fate that befell Zambia, Haiti, Mali, Nepal and Peru does not befall other developing nations? What measures will the Government propose to avoid unfettered liberalisation happening too rapidly in those markets?

My hon. Friend raises an important point. The Government have led the way in supporting investment in developing countries for trade-related capacity building, so that they can engage more effectively in the negotiations within the WTO, and also so that they can ensure that they put in place the necessary regulation to help them with a phased opening of their markets.

Of course, it is possible for developing countries to take advantage of greater trade and economic reform only if they also put in place the necessary reforms to their own systems of governance. That is an issue to which we direct much support and attention through our aid and development work.

I could not possibly be as unkind to the Secretary of State as the hon. Member for North-West Leicestershire (David Taylor) was. Given that protection and export subsidies in the agricultural sector of up to £1 billion a day now represent five times the level of international development assistance and are doing grave damage to the poorest and most vulnerable people in the world, does she agree that it is now time—consistent with what she has said—for the developed world to stop being so selfish and to start to recognise that genuine free trade, subject to the normal checks and balances, is the greatest wealth-creating mechanism known to mankind and the best source of help for the most vulnerable people the world over?

I agree with the hon. Gentleman. Our experience in the European Union is a good example of how countries—six of them, initially—came out of the devastation at the end of the second world war, through a process of free and fair trade among them, to the prosperity that we enjoy today. It is simply not acceptable that we in the European Union subsidise our dairy farmers to the tune of $2 a day for every head of cattle in Europe, when more than 1 billion people in the developing world live on less than that amount. Nor is it acceptable that the United States continues to subsidise its cotton farmers by a total sum significantly greater than the economy of several poor African countries. That argument is being made with increasing force in both the developed and the developing world. The issue for the Agriculture Council next week, and for the US Administration, is whether we will produce significant measures that will meet the commitment that we made at Doha to reduce, with the aim of phasing out completely, the trade-distorting subsidies that we put on our agriculture exports.