asked Her Majesty’s Government:

What steps they will take to ensure that the new European Union rules of origin will not prejudice developing countries’ trade.

My Lords, the Government strongly support the simplification and liberalisation of European preferential rules of origin. Developing countries should be freely able to source their inputs from all other developing countries, but current rules are out of date, complex and restrictive. We are commissioning research and consulting developing countries, EU member states and the European Commission to ensure that the new proposals reflect development interests. We expect the Commission’s proposals for revised rules to emerge in March.

My Lords, I thank my noble friend for that positive Answer. However, bearing in mind that the rules of origin are terribly important in enabling developing countries to trade successfully with rich countries and that the European Commission has been hanging about on these for quite some time, can she remind the House what powers EU member states have to block unacceptable proposals by the European Commission, and just clarify rather more what the Government’s objectives are in time?

My Lords, our objectives in time are to ensure that the rules of origin and the other trade-related issues—they are being discussed partly through the WTO Doha round but also in the context of the European Union negotiating economic partnership agreements—ensure that the needs of developing countries are at the heart of those developments. With respect to EU member states blocking unacceptable proposals, my noble friend may be aware that, as this issue is within the competence of the European Commission, any deal would be dealt with using qualified majority voting, so the onus is on us to work constructively with the Commission and to feed our research and views into it at an early stage.

My Lords, given that the Doha development round was always meant to be about development, does the Minister feel that there is a marked lack of urgency and vigour in the way in which the negotiations are being pursued?

My Lords, the noble Baroness will know that we have expressed our concerns on many occasions about the fact that we have been unable to reach a conclusion on this. We have been pressing our European Union partners, the United States and others. We have helped the capacity of developing countries to negotiate through our trade-related capacity-building programmes. I am pleased that Pascal Lamy said at Davos that,

“agreement has been reached to get back to full negotiating mode in Geneva”.

We all very much hope that the kind of conclusion we are looking for from this round will come out of those negotiations.

My Lords, with regard to the possible resumption and completion of the Doha round, does the noble Baroness welcome the recent initiative by President Bush to reduce US farm subsidies by some $18 million over the average spend over the past five years?

My Lords, the United States needs to do a substantial amount on farm subsidies. I would prefer to wait until the US Farm Bill is published and to see its impact before going into any detail about United States’ proposals for agriculture.

My Lords, does the noble Baroness agree that the rules of origin arrangements have often disadvantaged the very poorest of countries that they were designed to help? For example, a country such as Lesotho was unable to take garments through every stage of manufacture because it did not have the plants to do that. Will she ensure that whatever new arrangements are developed, the United Kingdom has its input in trying to ensure that they are genuinely poverty-focused in their effect and that then there is stability so that countries have time to develop new industries and know that they have got a secure market in which to sell their produce?

My Lords, the noble Baroness is absolutely right. The rules of origin need to be revised and liberalised to ensure that they deliver the European Union’s current trade and development policy objectives. However, they also need to take account of global manufacturing and supply chains that now exist for many products. The noble Baroness is right in respect of Lesotho, and that situation is mirrored in many countries where the value-added that countries can bring to products, and which is important in terms of their longer-term trade needs, is penalised through this process.

My Lords, does the noble Baroness believe that the EU negotiating position in the Doha round is in the interests of developing countries? If she does, what is Britain’s input, given that we have only 8 per cent of the votes in the Council of Ministers?

My Lords, the EU negotiating position seeks to balance the views of member states—I have to say to the noble Lord that the views are very different—the needs of developing countries and the commitment that the European Union has made to the development parts of the Doha development round. The United Kingdom has a very clear view on this: it focuses very much on development issues and works in an integrated way across government departments. Our responsibility is to persuade our EU partners and the Commission, as well as other countries including the United States, that development issues need to be at the heart of the round and that the outcome of the round needs to reflect that.