§ [Relevant documents: Second Report from the Environmental Audit Committee, on World Trade and Sustainable Development: an Agenda for the Seattle Summit (HC 45); Sixteenth Report from the Environment, Transport and Regional Affairs Committee, Session 1998–99, on Multilateral Environmental Agreements (HC 307-I).]
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Clelland.]
§ Madam Speaker
Before I call the Secretary of State, I have to inform Back Benchers that speeches must be limited to 15 minutes.
§ The Secretary of State for Trade and Industry (Mr. Stephen Byers)
I welcome this timely opportunity to report to the House on the conclusions of the Seattle World Trade Organisation negotiations, and also to debate the way to carry forward the need for trade liberalisation in the 21st century.
However, before I do that, I wish to thank the three right hon. Friends who, with me, made up the United Kingdom delegation to the ministerial conference. They are my right hon. Friends the Secretary of State for International Development, the Minister for Trade and the Minister for the Environment.
§ Mr. Desmond Swayne (New Forest, West)
Does not the Secretary of State agree that the four Ministers in the United Kingdom delegation, however well intentioned they may have been, were effectively observers, as the true negotiating power was in the hands of the European Commissioner? How long can that dismal state of affairs be allowed to endure?
§ Mr. Byers
The hon. Gentleman has revealed his ignorance in record-breaking time. I am conscious of the fact that Back Benchers want to take part in the debate. I want them to do so, which is why there is a time limit on speeches and why I shall cut my initial remarks fairly short. Interventions such as that from the hon. Gentleman do not help very much, as they do not follow the plot at all.
§ Mr. Byers
I will. As members of the General Affairs Council, we played a part in determining the European Union position. More significantly, as members of the Commonwealth, we had many bilateral meetings with Commonwealth countries. We were instrumental in putting in place a broad agreement on trade and labour relations. We also discussed with other countries—especially the least developed—what we could do in terms of opening access to the European market. The non-governmental organisations in attendance at Seattle welcomed the role that our delegation played, as did those of the hon. Gentleman's colleagues who also attended the negotiations.
I want also to thank the non-ministerial members of the delegation—Donald Anderson, representing the Confederation of British Industry; Rodney Bickerstaffe, 1023 representing the Trades Union Congress; and Hilary Colby, representing the voluntary and charitable organisations. Our inclusive approach to the people who formed the delegation broke new ground.
I also want to thank the officials of the various Government Departments who attended the talks. In often difficult and demanding circumstances, they provided necessary support to Ministers and others.
I shall say something about the importance of trade to the United Kingdom, and then go through the events in Seattle and describe how matters can be moved forward.
We should never underestimate the importance of trade to our country. More than a quarter of our gross domestic product stems from exports, and more than half from trade. We are the world's fifth largest exporter of goods, and the second largest exporter of services. Our share of world exports of goods is about 5 per cent. The UK has the highest ratio of inward and outward investment to GDP of any leading economy.
The UK is the second largest recipient of inward investment after the United States, and we are the second largest outward investor after the United States. In short, therefore, trade is vital to the UK's continuing prosperity. We need to secure that for the future, but we also need to create the same opportunities for the rest of the world.
That is why we are disappointed that the terms for a new round of trade negotiations were not agreed in Seattle. Along with most other WTO members, we had hoped to launch a comprehensive and broad-based round of negotiations. That approach reflects our belief that such a round is the best means of delivering substantial trade liberalisation consistent with sustainable development. Such a package would also promote continuing growth in the global economy, helping to offset protectionist tendencies where they exist—as, regrettably, they do.
§ Dr. Lynne Jones (Birmingham, Selly Oak)
The United Kingdom, rightly, has developed a good reputation for taking a progressive stance in these matters. However, with hindsight, was it right to go for a comprehensive round of new negotiations? Would it not have been better to concentrate on making the existing rules more effective, specifically by assisting developing countries by withdrawing tariffs against their exports?
§ Mr. Byers
I agree absolutely that it would have been a great prize if the UK initiative to remove all tariff barriers placed on goods had been agreed. However, that initiative is part not of a narrow agenda but of a broad-based approach. The narrow agenda would have been limited to agriculture and services, and there would have been nothing at all for developing countries or the least developed countries. We wanted a comprehensive round—a development round—for the purposes to which my hon. Friend referred. A narrow round would not have delivered the benefits that we wanted to bring to those developing countries. We needed a broad-based and comprehensive round of trade negotiations, and we bitterly regretted being unable to conclude that at the end of the Seattle negotiations.
§ Dr. Jenny Tonge (Richmond Park)
The Secretary of State says that he wanted a broad round in which to 1024 discuss development. Was he not disturbed that so many developing countries were not present at the talks? I understand that 30 were unable to send delegations, and that many more had very scanty representation. If this was a development round, should we not have paid more attention to that issue?
§ Mr. Byers
There are two points to make. First, the Government have indicated to the director general of the WTO that we will support a fivefold increase in the budget for technical assistance and capacity building for developing countries. Secondly, we helped countries that were present at Seattle but had not had any briefing or support before they got there. A civil servant from my Department briefed delegates from some of the African countries about the mechanism and process of Seattle. Although that should never have had to happen, we were able to play a valuable role in providing time for information to be given to those African countries. They came away from the briefing meeting saying that it was the most valuable hour they had spent in Seattle.
§ Mr. Jeremy Corbyn (Islington, North)
We are obviously pleased that an official was able to assist countries that did not have full delegations; but surely the issue—according to reports that I have read—is that a large number of delegations from southern and third-world countries were denied access to all meetings and discussions. They had to read about the proceedings in the newspapers because the American delegation refused to allow them in.
The Americans also appear to have used incredibly heavy-handed policing tactics against people who were legitimately protesting on behalf of the poorest peoples in the world while their future was being decided behind closed doors by a few very wealthy countries.
§ Mr. Byers
My hon. Friend makes a good case for modernisation and reform. I am pleased that he recognises that one responsibility of Government is to modernise and reform many of our institutions. There is a modernising and reforming agenda for the WTO, which I shall outline shortly. A key objective must be to ensure that all 135 member nations have a part to play in the process. I accept that that is not the case at the moment. The challenge for the United Kingdom is to lead the campaign for reform of the WTO so that all members can play a full part.
The ministerial conference was extremely significant in terms of global politics. Probably for the first time in any such international gathering, the developing countries asserted themselves and said that it was unacceptable for a deal to be carved out between America, the European Union and Japan but not the developing countries themselves. If anything positive has come out of Seattle it is the fact that for the first time on the international stage those developing countries have said no. That is extremely significant for the future. We need to build on that and recognise that all 135 members must be incorporated into the process of the WTO.
I believe that free trade and open commerce are the best way forward. Freeing up trade means lower prices and wider choice for consumers; and it stimulates competition and innovation, promotes economic growth, particularly in developing economies, and generates the resources to promote higher standards of employment and 1025 environmental protection. Ultimately, it helps to underpin political stability throughout the world. That is why we wanted a broad-based approach to the negotiations. It is important to recognise that the trade discussions in Seattle took place against a backdrop of growing concerns about globalisation. Indeed, many of the people who took to the streets of Seattle were concerned about globalisation. We must ask ourselves whether globalisation is, by its very nature, a bad thing. Will it destroy our environment and our traditional livelihood, and increase the gap between rich and poor?
I believe that globalisation is useful and necessary—indeed, it is essential. It is the basis for our prosperity and that of our fellow human beings. We have no alternative to globalisation for achieving those objectives. Globalisation allows economies of scale and the development of economic activities at a much faster and more sustained rate than would otherwise be possible. Economies of scale and growth are necessary to support our growing population. We need the benefits of emerging new industries to allow us to improve the living conditions of all our people.
Opening up markets gives the opportunity to those economies which need to strengthen their development. We saw the tremendous evolution that took place in Asia during the 1980s. Now we can see the successful building of economies emerging from decades of state control in eastern Europe. We have also seen how some, but not all, developing countries have benefited from the Uruguay round.
I also recognise that if we get it wrong, globalisation can be a negative force. It could lead to environmental damage, the destruction of traditional cultures, and the widening, instead of the narrowing, of the gap between rich and poor that exists both between countries and within societies. It is up to us to ensure that we reap the benefits of globalisation and avoid its drawbacks.
We have a choice: we can let globalisation carry us along, and do nothing about it, or we can try and steer it in a way that produces the results that we want. I believe that the WTO is the vehicle for steering globalisation in a direction that will benefit all the countries of the world.
§ Mr. Andrew F. Bennett (Denton and Reddish)
Does my right hon. Friend accept that if world trade is one part of the globalisation process, it is equally important to have multilateral environmental agreements which are, as it were, the controlling part of it? Will he explain the Government's position in ensuring that the World Trade Organisation will not obstruct those important multilateral environmental agreements?
§ Mr. Byers
I have sympathy with my hon. Friend's point, and if he can wait a couple of minutes, I hope to be able to address it specifically.
We would be foolish not to recognise the important role that the WTO can play. As is clear from what has happened in recent years, free trade leads to greater prosperity. That is why we should be concerned that there was no successful outcome in Seattle. It is legitimate to ask what went wrong. First, the work was not done in the lead-up to the ministerial conference. There was not sufficient common ground identified in advance. We went to Seattle with a 36-page draft declaration, most of which was simply not agreed. Secondly, there was a lack of 1026 organisation in Seattle to deliver a declaration at the end of the ministerial conference; and thirdly, there was a growing concern by many developing countries about their lack of involvement in the decision-making process. They rightly considered decisions on the launch of a new round to be of such importance that they demanded inclusion. They needed to take part in the building of a consensus, rather than being presented with a done deal by the big players. One reason why agreement was not reached was that they called a halt to the process.
I believe that Seattle was a missed opportunity. We must learn from the mistakes of Seattle and build a stronger WTO. We know from the history of the general agreement on tariffs and trade, and now the WTO, that there is no alternative to a rules-based system for international trade. Like the Labour Government who launched GATT in 1948, this Government want to ensure that they can reform and strengthen the WTO so that it can meet the demands and challenges of the 21st century. We should not overanalyse what happened at Seattle, or get into a blame game. We must instead ensure changes for the future.
It is crucial that the WTO should be modernised and reformed. The United Kingdom will lead those efforts. We have already contacted the EU Trade Commissioner, Pascal Lamy, and have been in touch with all EU Trade Ministers. We have also contacted like-minded countries that support reform, including Egypt, South Africa and Australia.
As we look towards change of the WTO, we must consider several points. We should make WTO documents publicly available and develop effective mechanisms to consult more widely. There should be far greater transparency over dispute settlement. We should consider establishing a better mechanism to allow non-governmental organisations to express their views. We need to change the WTO decision-making structure, and that will require consideration of better ways to build consensus. With 135 members, each of which can exercise a veto, the WTO is often deadlocked and unable to reach a decision.
We must consider having some form of parliamentary assembly to allow a greater degree of accountability. The WTO also needs a clear programme of technical assistance and capacity building for developing countries. I have written to the director general to say that the UK Government would support a fivefold increase in the WTO budget for that purpose.
§ Mr. David Curry (Skipton and Ripon)
However desirable many of those things are, does the Secretary of State agree that the launch of a new round must not be dependent on the achievement of reforms? The important thing is to get the new round under way, and the reforms can be addressed in parallel with it.
§ Mr. Byers
I do not disagree, but I do not think that the two processes are mutually exclusive. I would not want negotiations on a new round to be held back by lack of completion of WTO reform. If the two things can be done simultaneously, so much the better. There is a question of how much progress can be made next year on negotiations because of politics elsewhere in the world. For reasons of which the right hon. Gentleman will be fully aware, it may be some time after January 2001 before we can engage in the detailed negotiations required.
1027 We can make progress in detailed areas of the negotiations, however. Even though there was no formal agreement on the launch of a new round, a lot can be done in the meantime, without waiting for the reform programme to be put in place. The first area in which we should try to achieve progress as soon as possible is liberalisation in agriculture and services. That would have been the narrow agenda, had we stuck to it. Negotiations should begin as planned in 2000. The UK has strong interests in those areas, and we shall continue to pursue them. At the same time, while we cannot expect to do all that would be achieved in a broad-based round because of the flexibility and building of broader political support that that would imply, we can still make important progress.
Secondly, we can continue to make the case for further comprehensive liberalisation of industrial tariffs as part of the new round. Thirdly, we must push for consensus in the WTO on the need to address growing consumer interests in trade, particularly through more expansive work on labelling, through reform of anti-dumping rules and through an increase in transparency. All that would have to be included in the new round if we were to make substantive progress.
Fourthly, we must do more to build consensus on including trade and environment as issues for the new round, as my hon. Friend the Member for Denton and Reddish (Mr. Bennett) said. Much concern exists in that connection. Some developing countries take the view that bringing the environment into trade negotiations could be used for protectionism. We should be aware of those concerns, but they should not allow us to hold back on the need to recognise that greater trade liberalisation must acknowledge the consequences to the environment of development.
We can have multilateral environmental agreements, but there is some dispute about how they would interact with the rules adopted by the WTO. The UK would argue that as part of a new and comprehensive round we should clarify the WTO rules to make them compatible with important multilateral environmental agreements. Those issues must be included in the new round when it is launched.
We must do all that we can to include investment and competition. From Seattle, we know that concerns exist about those two areas. We have to show that there are benefits from them for all 135 members, and that our ambitions in that respect are modest. Part of the problem is that the talks on the multilateral agreement on investment discredited any real discussion of investment. The MAI was launched under the aegis of the Organisation for Economic Co-operation and Development, and many member nations were not within the loop of involvement. Understandably, therefore, they resisted discussion of investment.
In the WTO—an inclusive body in which all 135 members must agree—there is real potential for putting in place effective rules on investment, and that should be an important part of the agenda for the future. Electronic commerce must also be reflected in trade rules. That is not so at present, and much needs to be done. We must roll forward the duty-free commitment if we are to ensure that we can create the right environment for electronic commerce to continue to develop in future.
1028 We must do more for developing countries. The United Kingdom has called for the EU to advance the initiative on developing and providing duty-free access to products from the least developed countries. When the General Affairs Council of the EU met in private at the end of the Seattle conference, we agreed that we should carry forward the proposal to provide duty-free access on our own initiative. Even if America and Japan do not agree, the EU will act because it is the right thing to do. How can poor countries develop, or even pay their debts, if we refuse to buy their products? The EU will take a unilateral initiative to open up our markets to those goods.
Labour standards and trade were among the most difficult issues on the Seattle agenda. We aim to build on recent progress in the International Labour Organisation to gain wider respect for internationally agreed core labour standards, including the recently agreed ILO convention on child labour. Trade and labour standards policies are not in conflict. Both policy objectives can and should be pursued in parallel. We are firmly opposed to the use of trade sanctions to enforce labour standards. Driving countries into even deeper poverty will not improve their labour standards.
§ Mr. John Gummer (Suffolk, Coastal)
Does the Secretary of State agree that if that position is to be accepted—the Conservatives entirely agree with it—the international community must pay the same respect to labour and environmental standards as it does to the work of the WTO? A disproportion of respect lies at the heart of the concern expressed by many non-governmental organisations and others.
§ Mr. Byers
The right hon. Gentleman makes an important point. It is a question of how the WTO rules are enforced. One reason why many people want to bring matters within the WTO is that it has an extremely effective enforcement mechanism, whereas many other international organisations do not. I believe that that is a case for reforming some of those other organisations to make them more effective, not trying to bring everything within the WTO's remit. However, that is a matter on which there is, we hope, agreement on both sides of the House.
There is one labour standards issue from which we cannot walk away. We have an opportunity to bring together international organisations such as the ILO, the WTO, the United Nations and the World Bank to identify ways in which we can lift countries out of poverty in a positive way, in the belief that by doing so we are more likely to secure improvements in labour standards. That is a far more effective way forward.
§ Mr. Tony Benn (Chesterfield)
Will my right hon. Friend explain why the Government have not embodied in statute in Britain the commitments on trade union rights into which they entered in the International Labour Organisation? Is he aware that the Employment Rights (International Obligations) Bill has been presented, supported by nearly 50 hon. Members and, I think, eight general secretaries? It argues simply that international commitments into which we have entered ought to be embodied in British law so that they are applied in this country.
§ Mr. Byers
That will always be a matter for the House to determine. The Government's view is that we have, 1029 in our own way—through the Employment Relations Act 1999—provided a fair framework for employment legislation. That is the way in which we intend to deal with those matters.
As a result, effectively, of an initiative taken by the UK delegation in Seattle, we believe that there is now a broad-based consensus for an approach that allows the international organisations to reflect on the relationship between poverty, globalisation, labour standards and trade liberalisation. We hope that a consensus can be achieved within the framework that we were able to promote while we were in Seattle, which can ensure that that issue will not be ignored.
Briefly, on China's membership of the WTO, as hon. Members will be aware, just before the Seattle conference began the United States reached an agreement with China about the terms under which the US Administration would agree to Chinese accession.
The European Union has not yet agreed such an arrangement with the Government of China. We expect the EU to begin negotiations some time in the new year with representatives of the Chinese Government. Once we have secured agreement, we can ensure that China can become a member of the WTO. We want that objective to be achieved, but on appropriate terms. Detailed negotiations will have to take place with China to ensure that, as far as the United Kingdom and the European Union are concerned, its membership is on satisfactory terms.
§ Mr. Byers
I think that it would have had difficulty reconciling the two, but that is probably best left to representatives of the American Government. I am not going to try to defend that one.
We believe that if the terms are right, it is appropriate for China to be a member of the WTO. If it becomes a full member, the whole dynamics of the organisation will change dramatically. Some of those countries that stand out against labour standards having anything to do with the WTO at the moment may suddenly find that there are some benefits in such standards being included. However, we must be careful. Many of us listening to the debate in Seattle felt that the motive behind the speeches of those who most strongly promoted the inclusion of core labour standards was not to help the conditions of the workers concerned but to protect the domestic market. Sometimes we need to study carefully the reasoning that is being put forward to support that proposal.
I shall draw my remarks to a conclusion as many Back-Bench Members wish to speak. There are those who say that globalisation and trade liberalisation carry much of the blame for any economic crisis that may occur. They see the trends of globalisation and trade liberalisation as innately harmful, bringing benefits only to a handful of multinational companies, widening the gap between the richest and poorest, threatening the environment and undermining social structures. Such people can be found at all stages of human history, casting doubt on progress and pointing to the ills it allegedly brings, while ignoring the benefits. Today, their modern counterparts reject the 1030 markets and the concept of economic growth. They dismiss profit as greed and see science and technology as a threat rather than as a means of improving people's lives.
There is no doubt that progress pursued blindly and without thought for the consequences carries with it risks and costs. However, by working together we can confound the critics and show that globalisation and trade liberalisation together can be a decisive force for good. In our democratic society, we need to work at convincing our electorate that these changes are to be welcomed rather than to be feared.
§ Mr. Owen Paterson (North Shropshire)
I welcome the Secretary of State's clear belief that the extension of global free trade benefits all. It was hard for those of us who read what was in the press—because of all the smoke, fuss and tear gas—to get a feel for what happened in the meeting. Will the right hon. Gentleman report to the House the consensus in those serious discussions on achieving a worthwhile extension of free trade after the presidential elections in America?
§ Mr. Byers
I referred to January 2001 as, perhaps, a witching moment when real progress could be made. There may be opportunities, post the American presidential elections, that are not there at the moment. We all appreciate that domestic politics are playing a role within the United States. We have to ensure that, come 2001, the structure is in place to drive forward the trade liberalisation agenda. The message has to be clear throughout the world that if we want prosperity, it comes through free trade and open commerce. Our history shows us that.
I was reading in a newspaper the other day an interesting analysis of what happened in China in the 1400s when a caucus of mandarins managed to convince the emperor that free trade was not a good idea. They began by blocking craftsmen from working in the shipyards because they did not want ships to be built to trade. They then made it a criminal offence to build a three-masted schooner because they were worried about the trade implications.
§ Mr. Byers
There we are. It was by Matt Ridley—a good man. In 1551, it became a capital offence to set sail in a multi-masted ship. As a result, there were four centuries of economic decline in China. [Interruption.] My constituency would love to build the ships.
The lesson and the reality is that throughout our history, in whatever country, free trade has been a bringer of prosperity. In the modern day, the issue is how we can harness the benefits of free trade. The WTO is the body that can do it. Globalisation, through the free flow of foreign direct investments, leads to a more equal distribution of capital, greater competition and productivity, and to wealth creation and growth in employment. Potentially, everyone can be a winner.
Nor does globalisation represent the pursuit of irresponsible gain by large business. The decision to invest capital, technology and human skills is not one that is taken lightly. No one should doubt the immense benefit 1031 to the global economy brought by the progressive opening up of markets and international trade in the past 50 years. We also know that, if markets are closed, prosperity and growth will be denied. Protectionism anywhere is a threat to prosperity everywhere. We need more trade liberalisation, not less.
§ Mr. Gordon Prentice (Pendle)
The European Union market is currently closed to US beef that has been treated with hormones. How would the new WTO adjudicate in disputes such as those over genetically modified foods, hormone-treated beef or biotechnology? Those matters are incredibly contentious even within countries.
§ Mr. Byers
I agree that they are contentious. That is why we need a rules-based mechanism that will allow us to achieve our objective. One of the disappointments at the failure to reach a conclusion at Seattle related to issues that could have been part of a broad-based round. They include the whole question of scientific evidence and how the WTO deals with it; consumer choice and labelling, so that people can make genuine choices—this is especially important for the environment; and food safety. That is why we believed that it was important to adopt a comprehensive approach. It is also why a narrow round—as supported by Opposition Members—would not have been successful.
The challenge that we now face is how to move forward within the WTO. The events of Seattle are a defining moment for the WTO. A reformed and modernised WTO can deliver for all the world's people. A broad and comprehensive trade round, early in the 21st century, will play an important part in achieving that objective.
§ Mrs. Angela Browning (Tiverton and Honiton)
It has been a joy to observe the Secretary of State for Trade and Industry on his journey along the road to Damascus. Many of us will remember his comments and those of many of his hon. Friends during the previous Parliament, when the Conservatives spoke about competition, free markets and global trade. I genuinely welcome much of what he said this afternoon. I recognise much of the closing part of his speech; it came from the well written speech that he gave recently to Japanese business men—the right hon. Gentleman is nodding. I did not agree with everything in that earlier speech, but I share his view on globalisation, which he has repeated this afternoon.
The Secretary of State told us of his disappointment that the talks had broken down. We share that disappointment, but we regret that it took him four days to come to the Dispatch Box. A fortnight ago, he will remember sending a letter—also signed by three of his hon. Friends—to all hon. Members, to brief them on the forthcoming WTO talks. The letter concluded:Stephen will be making a full statement to the House immediately on our return from Seattle.As there will be many more talks on this subject, in this country and abroad, I hope that the Secretary of State will include the House of Commons in the way forward. We share much common ground, because we all want the talks to proceed as quickly as possible, but with a realistic 1032 agenda that enables us to achieve solid progress for global free trade. Conservative policy is that all tariff barriers should be removed by 2020.
Before me at the Dispatch Box, I am using, as an impromptu lectern, a bundle of papers, detailing about 15,600 tariffs that apply to this country alone—the integrated tariff of the United Kingdom.
§ Mrs. Browning
I promise the House that I shall not read them out this afternoon, but if, during this Parliament, the Secretary of State agrees that his objective of removing tariff barriers is realistic, I will be only too pleased to read out the reduced bundle that will result.
§ Mr. Corbyn
I am pleased to see that the hon. Lady has all 15,600 tariffs in front of her. I realise that there is not time for her to read them all out this afternoon. Could she give us a summary of those to which she objects? There are three hours left for the debate.
§ Mrs. Browning
The hon. Gentleman is most kind. The papers are available to all Members from the Stationery Office—other people have to pay £197 per bundle.
However much we talk about the need for liberalisation, tariff reductions and free trade, we confront a huge task—not just in the UK, but in the EU and in America—in achieving those targets. We need to get rid of all the tariffs, because they hamper free trade. The Secretary of State is committed to removing them and the Conservatives will support him. That is our objective in today's debate.
§ Mr. Bennett
Will the hon. Lady assure us that none of the restrictions in her bundle of papers are supported by individuals or firms in her constituency? Has there been any lobbying to keep restrictions?
§ Mrs. Browning
I have not read every line of each sheet of paper. Both sides of the paper are covered with small-point print. My constituents—like those of all hon. Members—realise that the prosperity of our country and of all those who live and work here will be enhanced by the removal of such tariffs. There seems to be some common ground in the House on that objective.
I encourage the Minister and his colleagues on the Treasury Bench to consider how we might achieve that objective, because the collapse of the Seattle talks was a blow. The Secretary of State spelled out the importance of international and global trade to the UK and to the EU. I am aware that, in the context of the WTO talks, the EU Commissioner spoke for all member states.
There are however some examples of stupid taxes—I am sure that others could be found in bundles similar to the one I have before me. Because of the EU tariff wall, there is a tax of 8.9 per cent. on chocolate from outside the EU, and a 9.7 per cent. tariff on biscuits. As I pointed out, the EU alone has 15,600 tariff duties, but they are also imposed in other states. The United States, which is often regarded as a free trade economy, applies a 25 per cent. tax on ceramics sold from the midlands in this country to the US hotel industry. That is a classic example of the way in which a single tariff affects an important 1033 UK industry. Such tariffs affect our exports to the US. There is a huge opportunity for the EU and the US to take a lead in showing how to remove those unnecessary taxes.
§ Mr. Jim Murphy (Eastwood)
I listened with interest to the points made by the hon. Lady about the 15,600 double-sided, small-point tariffs that she is using as a prop. Will she inform the House of how many of those 15,600 tariffs were agreed during the 18 years of Conservative Government? How many of them did she and the Conservative Government object to?
§ Mrs. Browning
I do not know. This collection has been built up over generations. I just want to see them disappear. It makes sense to get rid of all of them. I am not talking about which tariff was applied where and by whom. We all know that trade will enhance the prosperity of our nation and of nations throughout the world, if we get rid of restrictions.
We need to concentrate on the WTO talks, because the Secretary of State has a prime responsibility, on behalf of the UK Government, to ensure that our nation plays its part in restoring the WTO talks so that we can make progress.
We started out some months ago with high hopes. The Department of Trade and Industry and the Ministry of Agriculture, Fisheries and Food issued consultation documents. The European Parliament produced a document. We had papers from the United States Government. That suggested that things were on course—that there was sufficient commonality of purpose to adopt the agenda that the Secretary of State has described and to progress with talks. Obviously, we must now have another think about that.
Today the right hon. Gentleman has frankly described some of his proposals for taking the matter forward, but taking the matter forward must be our primary intention.
The right hon. Gentleman mentioned that the WTO talks and the talks from which they originate have been subject to criticism. I agree with him. There is now an opportunity to change the way in which the structure of the WTO functions, to make progress possible.
In the list of suggestions that the Secretary of State read out, his suggestion that there be some form of Parliament rang the loudest warning bells in my mind. We would want to see full details of that. I doubt that the creation of another body without democratic accountability will liberalise trade. We want there to be democratic accountability. Indeed, we are uneasy about the way in which the United Kingdom is represented, through the European Union, in the talks. Later I shall discuss what happened in Seattle—the role of the European Union and the way in which events unfolded. I hope that then the Secretary of State will reassure us that he will speak to Commissioner Lamy and others to ensure that our progress is not held up because of differences of opinion in the European Union, or because the views of the British Government as to what is in the British interest are not reflected.
The principles of multilateral trading are designed to help trade to flow as freely as possible. They should incorporate non-discrimination—one country should not offer another country more favoured terms of access to its markets than it does others. Tariff barriers should be removed and trading conditions should be predictable. 1034 Most WTO members' tariffs are bound at ceiling rates, above which they cannot usually be increased, and almost all developed country tariffs are bound at their actual rates. The introduction of quotas or other measures intended to restrict imports is not usually permitted. We need to consider how we can abolish tariffs rather than gerrymander the way in which tariffs and ceilings are imposed.
The Secretary of State used the word transparency. The WTO should undertake to ensure that its trade rules are clear, transparent and public, so that all new rules, as they emerge, are subject to proper scrutiny by all interested parties. Judging by what the Secretary of State has said, I hope that he would actively promote such steps.
§ Dr. Vincent Cable (Twickenham)
While the hon. Lady discusses tariff removal, is she aware that by far the largest bulk of that paper on her desk consists of two items—the tariff structure of the standard international trade classification, items 65 and 80 to 84, which are textiles and clothing? Is she saying—with commendable bravery—that the Conservative party is committed to the prompt and total removal of all tariffs and quotas on textile and garment items?
§ Mrs. Browning
We would like to see them phased out, but that will be part of future negotiations. At the moment, there are not even any negotiations to participate in. There is unfinished business from the Uruguay round, and the textiles issue is part of the unfinished business from a previous trade round which the Secretary of State must tackle.
Later, I shall discuss some serious matters that are unfinished business from the Uruguay round, on which I believe that the Secretary of State should seek to make progress now, instead of waiting for a new round of talks to begin. I hope that we shall hear from him and his colleagues how they intend to go about that.
The Secretary of State asked what went wrong at Seattle. He obviously had the advantage of being present. I have taken briefings from others who were also present at those talks—
§ Mrs. Browning
My right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) was present. I am sure that he will address the House and give his own views.
§ Mrs. Browning
I shall not give way.
The Secretary of State has quoted a speech that he made to Japanese business men but, given the speech that he delivered at Seattle, one does not get the impression that he was aware, while he was there, of the need for him to 1035 take such a leading role in bringing forward changes. I have with me a copy of his speech, in which he addresses fellow trade Ministers and the director-general.
In that rather short speech there was no attempt to retrieve the situation or make an input into the talks. Instead, the speech contained a lot of platitudes and some rather waffly language—certainly nothing as firm as the speech from which the right hon. Gentleman quoted this afternoon. For example, he asked:Can the WTO modernise and reform itself so that it can gain increased credibility and win the support of people and their governments? Can it stop being seen as a servant of multinationals and instead assert itself as a body which will protect and defend the interests of all its members?In that speech, delivered by the Secretary of State on behalf of the United Kingdom Government, he seemed to have more questions than answers.
There are a lot of platitudes:We must not lose sight of the opportunities that have flowed from the new age of globalisation. We have benefited from the integration of the international economy. A shared commitment to open trade and commerce has been a driving force for growth.That is not what we would have expected from a Secretary of State in a world negotiation when things were falling apart around him and when he was in a key position to make a much more substantive contribution—perhaps the type of contribution that he has made in the House this afternoon, with real suggestions about what could be done, instead of platitudes.
§ Ms Joan Walley (Stoke-on-Trent, North)
In view of the platitudes that are supposed to have come from the Government—on which the hon. Lady is totally wrong—I am curious to know what the previous Conservative Government did to remove the tariffs on ceramics supplied from the United Kingdom to hotels everywhere.
§ Mrs. Browning
I do not recall any of the rounds in which the previous Conservative Government were engaged resulting in the Secretary of State coming to the House to wring his hands and tell us that everything had fallen apart in disarray, that something had to be done, but perhaps not for another year, and that there was no immediate solution to the problems. That is not leadership; nor is it Government.
§ Mrs. Browning
I am just answering the question. I raised the matter because at Seattle there were two main players with whom we would have expected our Secretary of State, representing the Government whom he represents, to have had much more influence.
The Government claim to be influential in the European Union, which was a key negotiator. The rhetoric of the Labour party, especially in opposition, was to the effect that when there were difficult negotiations, and when there were difficulties with the European Union, it had a third way. Labour Members claimed that they would use their skills far more effectively than the previous Conservative Government had. And yet in one week we see our eurobond market about to disappear, our art market about to disappear and our beef industry in 1036 disarray—because the Government were unable to negotiate with their European partners, with whom they have always claimed to have a technique superior to that of the previous, Conservative Government.
Each day, week and year that passes, it becomes more obvious that the only things that the Labour Government succeed at as far as the European Union is concerned are matters where their third way—new Labour socialism—is in total accord with the new way socialism of many of the member states in Europe. They just roll over and agree with them when they have issues of new socialism—democratic socialism—to deal with. [Laughter.] I did not want to say just socialism, because I know that when anyone says that word, a frisson descends on the Labour Benches. I was struggling to get the new terminology right. However, Labour Members know what I mean—it is the third way. However, that is the way of failure. The third way of negotiating any matter involving the European Union has been, by definition and as a matter of record, a great failure.
§ Mr. James Gray (North Wiltshire)
May I remind my hon. Friend of an example of what she describes? The Prime Minister said proudly:we are delighted with the decision to lift the beef ban … That has come about because of the hard work of Ministers here"—that may be true—and also because the Government have a constructive … attitude to Europe. That is why we got the beef ban lifted, and it is another example of new Labour working."—[Official Report, 14 July 1999; Vol. 335, c. 402.]Does my hon. Friend recall that?
§ Mrs. Browning
I am grateful to my hon. Friend for giving us the complete text of the Prime Minister's words.
The success of Commissioner Lamy is important to the United Kingdom. He represents us. What he said and did at Seattle was far more significant than the platitudes in the Secretary of State's contribution. It is therefore incumbent on the Government to ensure—especially as things have now fallen apart—that the European Union uses its influence to help restore the World Trade Organisation talks and to enable us to make progress.
§ Mr. Gordon Prentice
The hon. Lady scoffed at my right hon. Friend the Secretary of State when he talked about the need to create a new parliament in the WTO. She must recognise, however, that it is difficult for the WTO to make progress. It can easily become deadlocked simply because each of its 135 countries has a veto.
§ Mrs. Browning
Indeed, but we have heard that—for various reasons including the number of countries involved—what was expected to be the start of something is now in such disarray that we are unable to see a realistic timetable for finding solutions to the problems that impede progress. We shall expect the Government to provide such a timetable when they have had a little more time to reflect and have negotiated not just with the European Union, but with the Americans, whose role I shall consider shortly.
The Secretary of State was quite honest in saying that some initial preparations might not have been carried out in the lead-up to the talks and that that fact had contributed to their failure. However, it is extraordinary 1037 that even during the talks there was a row among the members of the EU. That is just not acceptable. The Government claim to have influence and the superb negotiating skills that avoid rows and conflict with our European partners. They claim that they have the solutions to negotiations, agreements and conciliations within the EU.
In Seattle, we hear that there was a row in the EU over biotechnology. The Commissioner proposed a working group, despite opposition from 12 of the 15 member states. The proposal was sent to other countries, such as the Japanese and the Swiss, without UK Ministers and others seeing it. Earlier, the EU had opposed including biotechnology in the WTO remit. It said that it should be dealt with by the United Nations.
Why were such problems not sorted out before the representatives of the EU went to the talks? We understand that France felt so annoyed that it felt stitched up and threatened to walk out of the talks altogether. That may have influenced its attitude later in the week to other matters. It appears that lack of preparation and lack of communication in a matter in which we could have expected better of the Government have resulted in many unnecessary problems, thereby compounding the failure and the shambles of the talks that the Secretary of State attended.
I wish to refer to one policy area that will be on the agenda when the talks can be resumed. I hope that the Secretary of State will reflect on it when he and his colleagues make representations to the European Union. I am referring to agriculture. We noticed that the Government were reluctant to be strong in their negotiations with Europe about the reform of the common agricultural policy. The Agenda 2000 proposals that came out of earlier talks were watered down, particularly by the Prime Minister when he intervened on the matter. However, the objective of putting agriculture on the global agenda must be compatible with the EU's internal policies for reform of the common agricultural policy. That is essential. It is not acceptable to have one set of objectives internally, with restrictions and support through subsidies, but then to express the wish to get rid of more tariffs on a global basis.
What the Government say and what they do are incompatible. They say one thing, but they do another. Nowhere is that more evident than in the stance that they have taken in the EU on reform of the common agricultural policy and in the literature that sets out their objectives for agricultural reform on the global stage.
The Secretary of State and Labour Members have referred to other matters that have become entwined at the heart of the WTO agenda. They include environmental issues, as well as others dealing with child labour and costs. They are legitimate subjects for debate not only in the Chamber, but elsewhere. Such issues must be considered.
The Minister used a phrase that reflected a commonsense approach. He said that such matters should be dealt with in parallel, and I agree. When we criticise the fact that the talks have become enmeshed, one of the problems is that legitimate subjects have become bound up with the conditions for WTO progress. I would support the Secretary of State if issues such as child labour and the environment were to be developed outside the WTO, 1038 but in parallel with it. That would provide a read-across, but discussion of such issues would not inhibit progress on the reduction and removal of tariffs.
If the EU had the opportunity to make preparations to sort out problems before the talks began, so too might we have expected the Government to use their influence with the President of the United States and the representatives of the Democrats. The role of the Americans in the Seattle talks was significant for many reasons. I do not want to discuss the detail of the policing operation; I have no first-hand knowledge of that, but it sounded horrendous.
Does the Secretary of State think it appropriate that the person who chaired the meeting was the key negotiator for the United States of America? That is not common sense, and such problems could have been resolved before the talks began. As with the EU, we have heard from the Prime Minister about the special relationship and influence that he has with the President of the United States. If the Government have influence, surely they could have used it to sort that problem out. I hope that the Secretary of State will tell us exactly what action he will take in the EU and with the Americans to make sure that problems are sorted out before the talks resume.
I recognise that it is not always easy to second-guess what might happen. I see that the Minister for Trade is grateful for that, but some problems are glaringly obvious. Progress on this matter can be made now; we should not wait for another year. It is incumbent on our Government, who represent us at the talks, not just to leave matters to the EU negotiator and to circumstances outside their control, but to play a leading role.
I must tell the Secretary of State that we will support the Government if they have common-sense policies that will enable us to reduce the bundle of tariffs and help countries around the world, including developing countries, to remove the impediments on them so that they can play a full role in the global marketplace, which the Secretary of State has described very well. That progress will take place only if he makes it his personal responsibility to drive the matter forward.
Conservative Members will not find it acceptable if, after the debate, things are allowed to slip. The Secretary of State should give us a commitment in writing, perhaps in a White Paper, very soon, stating his proposals for action and his timetable, so that we have some hope.
Aside from the big issues of the talks, which have global importance, the Secretary of State will be aware that British companies are caught in the crossfire of unresolved business, particularly between the EU and the USA. I refer to certain categories of companies, of which I shall give examples rather than reading out a comprehensive list. The businesses affected are involved in the production of toiletries, handbags, folding decorative cartons, lithographs, bed linen and lead acid batteries. That is a diverse group, and a few more types of business are affected, but the list gives a flavour of the cross-section of British companies who, today, are having to make difficult decisions.
We have heard from many of those businesses. I raised their problems with the Minister for Trade in the European Scrutiny Committee a couple of weeks ago. They are caught in the banana war and in the hormone-treated beef war between the EU and the USA. Companies are relocating and laying off staff, and until those trade disputes are sorted out and read across into 1039 the progress of the WTO talks, they will continue to inflict real damage on British industry and British jobs. I hope that those companies will be given hope that they will not have to wait at least a year until the WTO talks can be resumed, and that the Secretary of State will make it his personal business to make progress.
Open markets are in the interests of all countries, whether developed or developing. The WTO talks have the potential to open up those marketplaces, remove the barriers and make a bonfire of all the tariffs, including not only our tariffs but those throughout the world. That can only be for the greater good of all citizens.
We shall not be picky or critical if the Secretary of States puts forward a detailed plan and some of it does not work. We shall be critical if he sits on his hands and allows events to unfold. We look to him for leadership. We look to the United Kingdom to show leadership in the European Union as well as in negotiations with the United States of America. I hope that the right hon. Gentleman will come back to the House with better news the next time he speaks on the subject.
§ Mr. Deputy Speaker (Mr. Michael Lord)
Order. Before I call the next speaker, I remind the House that Madam Speaker has placed a 15-minute limit on Back-Bench speeches, and that applies from now on.
§ Mr. Tony Benn (Chesterfield)
This debate was arranged to celebrate another triumph for free trade, and it has turned out to be a long overdue—and, in my case, very welcome—debate about the real nature of global capitalism. It is from that point of view that I want to address the House.
Free trade and global capitalism are accepted almost unanimously among important people in Britain. Multinational companies demand free trade because it gives them freedom. The City needs it to prosper as a financial centre. Speculators depend on it. Most newspaper proprietors and editors are committed to it. The BBC is so devout about free trade that it broadcasts share values and currency values every hour, entirely replacing the daily prayer service. Teachers explain free trade in business study courses, and some trade union leaders believe that free trade is bound to come about.
All Front-Bench Members are utterly committed to global capitalism and free trade. Conservative Members, whether pro or anti the single currency, are utterly committed to capitalism. The Liberals, with their Gladstonian tradition and the Manchester school, are committed to capitalism. I say with the greatest respect that I have never heard a more powerful speech for world capitalism than that just made by my right hon. Friend the Secretary of State for Trade and Industry, who occupies an office that I once held.
Third way philosophers line up to support capitalism and free trade. Modernisers and focus groups yearn for more of it, and business-friendly Ministers think of nothing else. Labour Members had an important letter from four Department of Trade and Industry Ministers on 24 November, and the contents of that letter were reproduced in the Minister's speech.
1040 The truth is that the benefits of capitalism and free trade are not really being seen in the world at all. We are told, for example, that the best way to narrow the gap between rich and poor is to have free trade and world capitalism. Ten years ago, the world had 147 dollar billionaires; five years ago, it had 274 dollar billionaires, and that number increased recently to 447, which is a rise of 25 per cent. Those billionaires have a combined wealth equivalent to the annual income of half of the world's population.
We must consider also what the World Health Organisation says about the health of the world. One fifth of the world's children live in poverty; one third of the world's children are under-nourished, and half of the world's population lack access to essential drugs. Each year, 12 million children under five die, and 95 per cent. of them die from poverty-related illness; more than half a million mothers die in childbirth, and more than 1 million babies die of tetanus. What contribution have globalisation and free trade made to solving those problems? The theory that wealth trickles down and that the richer Bill Gates gets, the richer people in Asia will get, is one of the most ludicrous illusions that could possibly be imagined.
What the Secretary of State did not say is that the one thing that globalisation has done is to make multinational companies more powerful than countries. That is why so many third world countries are worried. Fifty-one of the largest 100 economies in the world are now corporations: Mitsubishi's is bigger than that of Indonesia; General Motors's is bigger than that of Denmark; Ford's is bigger than that of South Africa, and Toyota's is bigger than that of Norway. The sales of the top 200 corporations are greater than one quarter of the world's economic activity.
Multinational corporations want free trade because they are trying to get Governments off their back so that they can exploit the profits that they can make with the minimum of interference. They think that global capitalism and free trade will end redistributive taxation and, although this has not been mentioned so far, gradually turn health and education into market-related activities.
A restricted paper circulated to World Trade Organisation delegates was brought to my attention by one of the Members of the European Parliament who received it. It asked:How can WTO members ensure that ongoing reforms in national health systems are mutually supportive and whenever relevant market-based?It will not be long before some countries can say to others, "You are discriminating against us because you have a health service and our workers have not, so you must cut back your health service so that you are not taking unfair advantage."
§ The Secretary of State for International Development (Clare Short)
There are many myths about the WTO, partly because the negotiations are so complicated that people can make up anything that they like. There is an agreement on trade in services. Some developing countries need banking and other financial services to get their economies going, but the agreement 1041 says that each country will open whatever sectors it wants to the market, and there is no compulsion for it to open any sector that it does not want to open.
§ Mr. Benn
Well, it said so in the document, and my right hon. Friend must have seen it.
This is a debate marking the end of the millennium, and I do not want to get into a party argument at all; I want to try to understand what is happening. Not long ago, Richard Whelan from the Institute of Economic Affairs said:Africa should be privatised and leases to run individual countries auctioned off".That is serious. In the Financial Times, James Morgan, the BBC economics correspondent, said:If some countries, especially in Africa, were to be run along the lines of commercial enterprises rather than states, investors might find them much more attractive".That is what the multinational companies are thinking about.
When the Secretary of State drew a comparison with the Luddites, he reminded me of the leading article in The Economist on 26 February 1848—a year or two before I entered the House—in which the slave trade was discussed. The article said:If in place of entering into Treaties for the suppression of the Slave Trade, we made conventions to ameliorate the conditions of the existing race of slaves—to establish and regulate on unquestionable principles the free emigration of Africans … we might, with a tenth of the cost, do a great substantial good to the African Race".I can imagine Ofslave being set up, with Chris Woodhead in charge, naming and shaming the captains of slave ships on which the sanitary arrangements for slaves are inadequate. For God's sake, surely we must take some account in this debate of the worry of the enormous number of people in the world who have not got rich through free trade.
Global capitalism empowers companies to move money freely, but it does not allow workers to move freely. If someone owns a factory in London but the wages are so high that he cannot make a profit, he can close it and open it in Malaysia, where wages are lower. If, however, someone from Malaysia tries to come to London where wages are higher, immigration laws would keep him out.
Globalisation has nothing to do with internationalism. At least in the European Union there is a free movement of capital and labour. We are not talking about letting workers move in search of higher wages, but only of companies moving in search of higher profits. Global capitalism allows big business to run the banana republics. It involves risks to the protection of the environment, and we are told that it is inevitable.
We have had free trade in Britain for a long time, but it has not solved the problems of poverty automatically. There was terrible poverty in Dickensian Britain and, even today, the gap between rich and poor is wider, even though Yorkshire cannot impose bans or tariffs on goods from Derbyshire. It is time that we looked at how free trade is a complete illusion.
1042 Let us look at the matter from another point of view that is all the more important. Global capital is eroding political democracy. Power has already been transferred to Eddie George. I do not know which constituency he won at the election; I could not find his name anywhere on the list. None the less, he has more power than the Chancellor of the Exchequer. The European central bank will have more power than either of them.
None of the representatives of the International Monetary Fund, the World Bank and the WTO is elected. Who elects the Secretary-General of NATO and the director-general of the WTO? Nobody. Our political democracy has been decapitated in the interests of worship of money. As Keir Hardie said at the beginning of the century, we must choose between worshipping God or mammon, and there is no doubt on which we decided.
That brings me to another matter. People outside the House know that there is a massive coalition in this Parliament in favour of capitalism, and they are therefore becoming cynical and disillusioned with the political process. One of the reasons why people do not vote is that they think that there is one view inside the House—that all the leaders are huddling together in coalitions and patriotic alliances—and that they are excluded from it. That is of course what happened in Seattle.
The Minister who made that point clear is now the Secretary of State for Northern Ireland. He said in Bonn on 3 March last year:It may be that the era of pure representative democracy is coming slowly to an end".That was a more candid account of what is happening than the praise of trade in this debate.
The Prime Minister, if I may quote him with approval, said when Leader of the Opposition during a debate on the Halifax summit in June 1995:is not the central issue the revolution in the globalisation of the financial and currency markets, which now wield massive speculative power over the Governments of all countries and have the capacity seriously to disrupt economic progress?"—[Official Report, 19 June 1995; Vol. 262, c. 23-4.]That idea inspired many of the people who went to Seattle. The churches were there, many concerned about world poverty, there were environmentalists, animal welfare groups, trade unionists and those who campaign for the cancellation of third world debt. All were immediately denounced as anarchists, extremists, members of the mob, and so on. The police in Seattle put up a pretty good show of organising a Tiananmen square operation without the killings. When I saw the police in their Star Wars outfits and the arrest of 500 people who wanted only justice for their own people, it gave me an indication of what it is all about.
The internet plays a very important part in these matters because, through it, all the groups sent out their messages. They could not get their messages across through Rupert Murdoch, CNN or the BBC, but they could communicate directly. They have no leaders to be demonised by the press; groups turned up with their own faith.
In the next century, people want co-operation and not competition in self-sustaining economies, working with other nations. They want security in their lives—and that does not mean more nuclear weapons. They want to plan for peace as we have always planned for war, with a single-minded determination to meet our needs. They want democratic control over their own destiny. That is the real lesson that this century must teach the next one.
1043 I shall finish with a quote that, in a way, sums up what I feel on this issue.We have lived so long at the mercy of uncontrolled economic forces that we have become sceptical about any plan for human emancipation. Such a rational and deliberate reorganisation of our economic life would enable us, out of the increased wealth production, to establish an irreducible minimum standard which might progressively be raised to one of comfort and security".Those are the words of Harold Macmillan in his book "The Middle Way". I sat in Parliament with that man—the great grandfather of the wets, who was well to the left of the present Government.
If as a democrat, an internationalist and a committed socialist I may endorse that view, I suspect that I would be doing so with the support of most people in the world, who do not benefit from the worship of money that we have been celebrating in this strange religious festival that we call a debate.
§ Mr. John Gummer (Suffolk, Coastal)
It is a great pleasure for the House to hear a voice from the past. From the fascinating speech of the right hon. Member for Chesterfield (Mr. Benn), we understand how far we have moved in trying to face up to the fundamental question to which Harold Macmillan was addressing himself: how, in a global economy, do we implement mechanisms to ensure that the world works for the benefit of all rather than merely for those who are strong enough to impose themselves on it?
The World Trade Organisation ought to be such a mechanism. Indeed, it has been a failure of it that we have not ensured on a global scale the introduction of standards and attitudes that we at home have already sought to introduce. That is very hard to achieve; we cannot expect to achieve it quickly, but it is essential. Globalisation is not something to be proved or disproved; it is to be accepted as a fact. Then, we must decide how we try to turn it to the advantage of all.
I ought to declare an interest. As chairman of the Marine Stewardship Council, I felt it right to ensure that those of us who are concerned with sustainable development and the proper labelling of goods, so that people may make a choice, were heard in the WTO discussions. There was the opportunity to create the mechanism through which such global control could be partly achieved.
I thank the Secretary of State for Trade and Industry not only for what he had to say, but for the courtesy that he and his team of Ministers extended to the non-governmental organisations and others who were in Seattle. We were very well briefed and able at all times to make the points that we wanted to put. That does not mean that I always agree with the right hon. Gentleman. Indeed, on a number of issues, I do not. However, such openness might be contrasted with the WTO itself.
The first thing that we must establish in the WTO is a degree of openness and transparency. For example, it is not acceptable that a world organisation should make decisions affecting people's livelihoods and deal with appeals, without any knowledge of the relevant facts and papers. That is a closed, secret system. It ought to be an open system, so that we all know where we are.
1044 Secondly, it is not acceptable that democratically elected Parliaments should not have a voice in such an organisation. I am sorry that my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) did not welcome, as I hope she will in the future, the proposition that comes not from the Government, but from the Opposition originally, that there should be some means for the Parliaments of the member nations to express their views, as is the case in the Western European Union and other organisations. My hon. Friend said that she would examine the details with care, and I am sure that she will. When she does, she will see how valuable that could be. It is part of the openness that we need.
A world organisation should listen to the views of all the countries that are involved. When I represented the European Union as the chairman of the Agriculture Council at the WTO meeting in the Uruguay round, it became clear to me that decisions were made between two organisations—the United States and the European Union. Thank goodness we are a member of the EU, or we would not have that important role to play. Outside the EU, we would have the same role as all the other countries, which would be much less important than our role as a key constituent of one of the two principal negotiating organisations.
The reason is not that that has been ordained, or that it is considered the best way. It is because the two strongest trading organisations in the world are the European Union and the United States. I do not think much of the fact that the US internal elections are so important to the WTO, but that is a fact of life. Unless we make the EU strong enough to counterbalance the US, or to support the US when that is the right course, no meaningful negotiation will be possible in the WTO.
One of our problems is that we have not been prepared to recognise the only means of achieving the balance necessary to ensure that the most powerful nation in the world should not insist that the chairman of the WTO should also be its chief negotiator. Who could stop that happening? It is a disgrace, but because of that power, such decisions go unquestioned.
It is important for us to recognise that if the WTO is to be legitimate, it must be transparent, and if it is to be transparent, the poorest nations of the world must have their say. We have our say. Sometimes we do not do so as effectively as we should, but we have the opportunity. The poorest nations do not have the money to back up their views with research and the day to day opportunity to lobby that is available in Geneva.
A representative working in a back office with a half-working telephone and an old duplicating machine is in no position to put the same pressure on the WTO as the representatives of the rich countries can. We therefore support the Government's view that we should extend the opportunities given to poorer countries by the WTO. It must enable countries to play a proper part in an organisation that affects their future to such an extent.
It is essential for the WTO to recognise legitimate concerns about the way in which trade is conducted, which do not relate solely to trade. Those concerns are so closely linked to trade that they cannot be separated, but they cannot be summed up simply by demanding free trade. I have always been a supporter of free trade and I continue to fight for it; no hon. Member could suggest otherwise. That does not mean that democratically elected 1045 Governments, and groups of Governments, as in the EU, do not have the right to concern themselves with matters such as hormones in beef and genetically modified foods. Those are real issues, and we must find proper forums in which they can be ventilated.
It was quite inappropriate for the US to demand that the issue of GM foods should be discussed in the WTO. It was the US which, with four, and only four, allies, destroyed the biosafety meeting at Cartagena. Such a use of international muscle was wholly inappropriate. We must insist that those issues are discussed and decided in the forums designed for them, and not hijacked into the WTO.
The WTO must therefore accept that there is a parity of respect—a point that I tried to make to the right hon. Member for Chesterfield—for international decisions made at the biodiversity convention, the biosafety convention, the conference on sustainable development, the issues that we decide following Kyoto or Montreal, and all the development decisions that have been internationally accepted.
We should also respect the decisions of the International Labour Organisation on some of those issues, about which people rightly feel strongly. The attempt to make the WTO the sole arbiter was what brought people out on to the streets. I should tell the right hon. Member for Chesterfield that I witnessed those protests, initially from among those who were protesting and later, when the teargas and so on were used, from a vantage point that enabled me to see everything.
The policing was not wicked; it was totally incomepetent. The police tried to stop the protesters getting into the conference hall, but that is not what the protesters were trying to do. They wanted to stop the delegates getting into the conference hall, so the protesters joined the police on their barricades to make sure that the exclusion was democratically universal, rather than partial. It was bad policing, badly carried out, and did not set a good example to the rest of the world, but it was not malicious.
Those who were on the streets were in large measure trying to make a reasonable point—in the wrong way, but a reasonable point none the less: that they did not believe that free trade is the only good. For most of us, it is a good, but it is not the only good. We all need a market economy, but none of us can be content with a market society. There is more to life than mere free trade, but free trade is the means whereby those who have limited lives can be given richer lives. The WTO must provide the terms for that to be achieved.
We should recognise what an enormous restriction on our sovereignty the WTO is. The right hon. Member for Chesterfield is right about that. I sometimes find it difficult to understand some of my colleagues, who are worried about the restrictions placed on them in the EU, where they can ensure that things are done properly, whereas we have given to the WTO powers that no democratic Government have ever given up in the past—the powers of controlling excise duties and the like, the way in which trade operates and so on—which we do happily because we see the benefit, just as we should see the benefit in the EU.
§ Clare Short
I am grateful to the right hon. Gentleman. Is it not the case that because of the speed with which 1046 capital moves round the world and the technology that goes with it, we cannot manage matters only at the national level? We must pool our sovereignty in international systems in order to exercise any sovereignty. The world is not giving it over to the WTO; without an international system, we could not manage the rules of international trade.
§ Mr. Gummer
The Secretary of State is absolutely right. We gain sovereignty by doing that. If we do not do that, we have no control over world capital flows, the way in which speculators affect currency or multinationals, which are larger and more powerful than many countries. The right hon. Member for Chesterfield proposes that we should give up all control over such matters and let those forces ride roughshod over us. We propose—and there is some synergy across the Chamber—a global society that is capable of drawing up the rules whereby those powerful forces can operate. The European Union does that in a regional way. For example, we acknowledge that we cannot deal with fishing on a national basis because fish do not have flags on their backsides. They swim around and need to be dealt with on a European level. Similarly, we cannot tackle the environment nationally when half our pollution comes from Europe and we export half the pollution that we produce to the rest of Europe.
We support a mechanism whereby we in the EU are sufficiently powerful to provide a counter-balance—and, good Lord, we have seen that that is necessary over the past few months—to our friends and allies in the United States, and to create the conditions for globalisation to become a benefit and not an incubus. The trouble with the argument of the right hon. Member for Chesterfield is that he opts out; everything is so terrible, unacceptable and impossible that he wants it to go on while he simply bemoans it. Luddites through the ages have done that. Their philosophy is, "Let's stop the world, we want to get off."
We need to control the forces that I have described. We will not do that unless we play an active part in the EU and unless it plays a proper part in the WTO.
§ Ms Joan Walley (Stoke-on-Trent, North)
It is a sign of how far this place has progressed that I agree with so many of the remarks of the right hon. Member for Suffolk, Coastal (Mr. Gummer). He mentioned the mechanisms that are needed to make progress. They constitute perhaps one of our greatest challenges as we move towards the millennium.
There is currently a debate in Westminster Hall about modernising government. I was torn between attending that and attending the debate in the Chamber because, unless we can modernise government and create effective participation at every level of civil society and at every parliamentary level—not only ministerial level—on an issue that affects our planet, we shall not make the necessary progress towards making free trade fair trade, which is underpinned by environmental sustainability. If I convey only one lesson in the short time that I have to speak, that one is the most important.
We cannot simply consider what we need to do about free trade; we must link it to environmental sustainability. Our parliamentary institutions and our mechanisms for achieving that are outdated. I am a member of the Select Committee on Environmental Audit, which, like other 1047 Select Committees, has examined some of the issues that were raised in the millennium round in Seattle. From the evidence that we took in the short time available, it was clear that there is not enough transparency and openness. Nobody has worked out a means of linking free trade with multilateral environment agreements. The question is no longer whether, but how we make progress.
I regret that I was not in Seattle and that many people who would have liked to contribute initially to the debate through parliamentary discussion could not do that. We need to re-examine the opportunities for debate on such issues in the Chamber. We were promised a debate before the meeting in Seattle, and I regret that it did not take place. If Select Committees could have had an input into that debate, our constituents, who feel disfranchised and disengaged from events, could at least believe that our parliamentary scrutiny was making a difference to important, highly technical and complex issues. Those issues include considering the means of underpinning matters with the precautionary principle and re-examining labour standards. They are crucial matters to which we do not pay proper attention.
Let us consider transparency. Ministers negotiate on our behalf, but because of the Ponsonby rules, we do not have an opportunity for real participation in drawing up the bottom line of the negotiations. Whatever the outcome of the agenda for modernising the House, we must consider the way in which the Government, through their role in the EU and the global governance of our planet, can examine the crucial new international architecture more closely.
I know that many other hon. Members wish to speak, but I want to conclude by commenting on environmental sustainability and the way in which all the evidence before the Select Committee highlighted the fraught and flawed nature of the relationship between the WTO and the multilateral environment agreements. There is no common basis for ensuring that the precautionary principle is at the root of everything. Like me, my right hon. Friend the Secretary of State believes that it is important for developing countries to participate increasingly in trade. However, there is no point in trade if it means that, in the short term, we destroy biodiversity and the earth's resources and prevent sustained trade. We must work to underpin all trade with environmental sustainability. We do not currently have the means to achieve that, and we need to be radical, innovative and imaginative in the new institutional and architectural framework for the next millennium.
If our short debate can be a means of getting all the necessary partners—national and international—round the table, beginning to work through the complex procedure of simply deciding how we can put what needs to be discussed on the table, and understanding and slowly working through the contradictions, it will have achieved something, and held out some hope for the sort of policies that we support for the next millennium.
§ Dr. Vincent Cable (Twickenham)
The right hon. Member for Chesterfield (Mr. Benn) announced that I would speak in the Gladstonian free trade tradition. I shall try to live up to that. First, I must apologise for having to slip out later to move amendments in Committee. I hope that that is not viewed as a discourtesy.
1048 My points of departure from the right hon. Gentleman in many ways echo the Secretary of State's excellent statement. First, I support an open, liberal trading system, not as an abstract, ideological belief but because history shows that it is crucial to raising ordinary people's living standards, and especially those of people who live in poor countries. At the risk of embarrassing the Secretary of State, I want to praise her work. She has taken a lot of flak from some of the development lobbies, which have adopted a fashionable new protectionism. She has argued courageously that open markets benefit developing countries. She may have lost a few friends on the fringes of non-governmental organisations, but she has probably gained others in the developing world and elsewhere.
I want to emphasise the importance of the WTO, not only as free trading organisation—it is only partly that—but as an organisation that creates rules and upholds the rule of law. That is absolutely central and, within the rule of law, it often offers the weak their only protection from the strong.
Some of the key WTO decisions of the 1990s enraged some people in the United States because, for the first time, it found its unilateral actions being overturned by a judicial framework. Examples are Venezuelan gasoline, Mexican shrimps and the slightly comical case of Costa Rican underpants and in each, whatever the rights and wrongs of the deliberations—I have no way of judging them—the United States was talked down by a legal panel of representatives of many countries in the international community. Surely that is progress.
The key point, which leaves us all hanging in respect of the radical statements made by the right hon. Member for Chesterfield, concerns the alternative. The trouble is that nationalism and unilateral action of the worst possible kind are unleashed when such a system breaks down, and there are many historical precedents for that.
Today, we have been talking about the beef ban and the reactions to it. The two countries involved trade a lot and have a framework for settling disputes politically and legally, but the nationalism aroused in both countries by the ban points to the crucial need for an international framework for resolving such disagreements.
I return to what went wrong in Seattle. There has already been some analysis of that, but a finger has to be pointed at the United States. I am not talking simply about the procedural points and the lack of preparation; the demagogic statements of President Clinton and the idea of telling the developing countries that they will face sanctions for being poor were so damaging. I am sure that he made those statements for totally opportunistic reasons, but they were thoughtless and damaging. There are people in this country—they sit on the Benches alongside me—who argue that we should detach ourselves from the European Union to be closer to the United States, even to the extent of joining the North American Free Trade Agreement, but people often fail to understand that the United States, far from being the paragon of free-trading virtue, contains extreme isolationist and protectionist tendencies, on the left and the right. That is the kind of structure within which we would be moving.
The case for a new round of liberalisation was not properly made and, although we may find scapegoats for what went wrong, we are all to blame in a sense, as are all Governments. There was hardly any discussion of the round in the House, although its opponents were 1049 mobilising through the internet and their organisations, and hardly anybody made any attempt to explain its importance.
Last week, I asked in a parliamentary question whether the Government had made any estimate of the benefit to the average British family of the new round of trade liberalisation. I received the helpful answer that studies had been done and it was estimated that the benefit for the ordinary family could be roughly £4 to £5 a week, mainly from the liberalisation of agriculture. That is far more than such a family is likely to get back from the Chancellor in tax cuts; it would receive a tangible benefit if trade liberalisation could be made to work, but, although I am not pointing fingers, none of us has argued that case effectively.
Another comment has to be made about the Seattle round. Many of the NGOs that I have dealt with over the past few months—some of which have been forceful and articulate in putting their case—played a constructive role, raising valid questions about transparency, the environment and the exclusion of developing countries. Some, however, are deeply hostile to the globalisation concept and they went to Seattle to wreck the round. The people who were dancing in the streets at its end will, I am afraid, harvest a bitter fruit and we can already see some of the consequences of the breakdown of the negotiations. One is that the isolationist tendencies in the United States—which are led by people from evil forces on the far right such as Pat Buchanan, who was in Seattle egging on the demonstrators—will get a lease of life and a new form of legitimacy.
Another result of the protest and the breakdown of the talks is the new respectability that has been given to people who argue about the dangers of cheap labour and the link between trade and labour standards. The Secretary of State dealt with that well and I do not need to go over the arguments again, but we underestimate at our peril the extent of the prejudices associated with that issue—they run deep.
The right hon. Member for Chesterfield is not here, but he knows his political history. At the end of the 17th century, there were riots on the streets of London and workers smashed windows in Whitehall because they feared what was then regarded as coolie labour and early Indian textile products such as calico. Such prejudice has long been present. At the end of the 19th century, the Conservatives had one of their bouts of nationalism and Joseph Chamberlain almost came to power on a platform of protectionism and keeping out cheap labour products. Oswald Mosley adopted such policies in the 1930s. Protectionism is a powerful current in the United States and in France, where it has been taken up by the National Front.
A danger of the breakdown is that a new lease of life has been given to people who believe that importing products from poor countries with lower wages is fundamentally damaging and morally and ethically wrong. A final danger has not been touched on, although we need to watch it carefully. People from the establishment in Europe and the United States will resurrect the concept of the transatlantic partnership and say, "Let's have more trade liberalisation, but we don't want all these troublesome developing countries to be involved. They are getting in the way and creating problems. Let's get 1050 together with the Americans and hammer out a deal on electronic commerce, agriculture and a few tariffs and that will be it." We must be aware of that danger.
How can we turn things round and what positive issues can be taken forward? I welcome what the Secretary of State said about process and I emphasise a point that was touched on by the right hon. Member for Suffolk, Coastal (Mr. Gummer): transparency is partly to do with introducing democratic control. A Parliament for the North Atlantic Treaty Organisation already exists and he mentioned a Parliament for the WTO, which is an important idea. We should not simply introduce non-elected NGOs to the structure; elected people should be scrutinising it. The other process change has to be the recognition of developing countries as a legitimate force in the WTO—they have been shockingly marginalised and excluded—although in some of the proposals we are in danger of re-inventing the wheel.
I have been involved in the preparatory process of the past two rounds of negotiations and it was said on each occasion, "Let's pay much more attention to developing countries." The United Nations conference on trade and development and the Commonwealth Secretariat in particular did a great deal in that regard, but the issue is not simply being polite to lots of ambassadors and encouraging them to sit in meetings. Real political courage is involved in doing what those countries want—cutting tariffs and quotas, often on sensitive items.
I referred to textiles and clothing in an intervention and if people are serious about helping the lowest-income countries such as Bangladesh, we must phase out quotas on garments more rapidly and cut tariffs on footwear and textile products. Although that is politically difficult—it would be foolish to say to our constituents that it should be done overnight—we have to tackle those issues if we are serious about helping developing countries.
The hon. Member for Stoke-on-Trent, North (Ms Walley) touched on the other issue for the future—how we integrate environment issues into trade—and I also want to discuss it. It is easy to use jargon and we can all say that trade rounds should be about sustainability; I am fully paid up to that idea, but what does it mean? The reconciliation of multilateral environment agreements with WTO rules is a practical problem, but it is vital and must be done. What would happen in practice if 40 mainly developed countries signed up for an international treaty—the Montreal protocol, for example, or a future treaty on climate change—and large numbers of developing countries, and China and India in particular, refused to sign? What would happen if sanctions were legitimised under the WTO? What quorum would have to be achieved before a multilateral environment agreement would be enforceable? That is the practical issue that has to be raised in respect of the environment. Another environmental issue is that if environmental pollution is not trans-boundary and it involves a company knocking down its tropical forests in an unsustainable way, who will say that it is right for other countries to impose sanctions against the offending country? It may be that it is the product of profiteering.
§ Clare Short
I agree with much of what the hon. Gentleman says, but surely we need mutual recognition of multilateral agreements and WTO rules. We should not use the WTO to enforce environmental agreements. 1051 We must have stronger enforcement systems within environmental agreements; otherwise we will get into terrible trouble.
§ Dr. Cable
The right hon. Lady is absolutely right. That is the way forward. There must be stronger recognition of multilateral environment agreements. However, there are hard questions to be faced. For example, if there is incompatibility, at what point can trade measures, which exist in the Montreal protocol, legitimately be raised? I raise the matter as a question and I do not have an answer. However, like the right hon. Lady, I recognise that it is a crucial issue. We must return to our constituencies and justify and support the WTO on the basis that it can uphold global and environmental agreements.
I began to touch on the other environmental question, which is what happens if a country is pursuing an environmental process that is unsustainable. That touches on the wider issue of ethics, which several hon. Members have mentioned. We all have ethical standards. Many of our constituents want to buy goods that are made in an environmentally friendly way and feel passionately about that. They want to ensure that ethical standards are applied and that the product does not incorporate genetically modified foods, for example.
We are trying to resolve two principles, and it is difficult to do so. One element is freedom of choice, in which we all believe. The customer must be free to choose what he or she wants to buy. That often involves an ethical dimension. Another element is that we do not want to see protectionism. How will the two principles be reconciled? One approach is labelling and another is that it may be necessary in some cases to introduce trade restrictions. That is a legitimate expression of a society's ethics. The way to deal with the matter is by means of compensation, either in cash or by allowing trade access in other areas, so that in no circumstances can there be an excuse for trade measures.
We are at a dangerous time. There is a real danger that the system will unravel and that all sorts of unhealthy, primeval nationalistic forces could emerge. The one source of encouragement that I derive is that we have been here before. The early 1990s saw a virtual breakdown of the Uruguay round. However, it was patched up. I think that the forces of common sense and internationalism will prevail, but we are at a dangerous time.
§ Ms Diane Abbott (Hackney, North and Stoke Newington)
The recent events in Seattle, although the violence was regrettable, had the virtue of focusing international attention on the activities of the World Trade Organisation.
It is important to understand that the supposed glories and benefits of free trade and the virtues of the WTO are seen in a different light by those who live in one of the third world developing countries which have been on the receiving end of globalisation and free trade.
It is worth reminding the House of the trade developments that we have seen in the past 10 or 20 years. Although we have seen a forward movement towards greater liberalisation and more free trade, the 1052 developments have not been to the benefit of many of the poorest people in the world. Although trade flows have tripled in recent years, the 48 poorest countries have seen their share of exports decline by half. Generally, the tariffs on their products, which they try to export into industrialised countries, remain high. Although we are all in favour of free trade, the process looks rather different in the third world. It looks rather different in the developing countries. The benign influence of the WTO looks very different from our view of it in the eyes of a country that does not have political muscle and cannot afford a flotilla of expensive lawyers and advisers. That is the position of a country that has come out on the bad end of some WTO decisions.
I shall detain the House by speaking for a few minutes about bananas. The interesting feature is that the issue illustrates all that is wrong with the WTO in the eyes of the developing world. We have heard much about globalisation and how the forward march of free trade cannot be opposed. We have heard also about the benign influence of the WTO and how it will make everyone richer. Even my right hon. Friend the Secretary of State for International Development was saying that free trade is to the benefit of third world countries. Tell that to the eastern Caribbean. Tell that to poor rural producers of bananas.
Over the past 12 months, America has taken a case to the WTO to try to dismantle the special protection which ACP bananas, largely Caribbean bananas, get in European markets. The House may ask, what is wrong with that? What is wrong with America demanding a level playing field? I remind the House that America does not grow any bananas. We all know why America took the case to the WTO. It did so because big American multinationals such as Chiquita have made lavish donations to both Democrat and Republican politicians. Fuelled by that campaign money, and paying off political debts, American negotiators took a case to the WTO that was designed to smash the preferential access that Caribbean banana producers are now given by the European Union market.
Caribbean countries and the ACP are being asked to compete in open markets with multinational producers in south America such as Chiquita, which run plantation-type operations. They pay their workers little or nothing. They contribute nothing to the environment of the community. Small, rural and often family-owned banana producers are being asked to compete with such companies. They cannot do so. Their banana production does not have the economies of scale of the south American plantations. Those involved in the family-run smaller units try to pay themselves a living wage. They do not benefit from a system which enables the big south American producers to pay very low wages. They cannot compete in completely open markets. Up to 90 per cent. of the foreign exchange of some Caribbean countries—for example, Dominica and St. Lucia—is dependent on banana production, when their trade collapses as it will do if the Americans and the WTO get their way, what will the producers do?
I have heard some of my Government Front-Bench colleagues say that they should diversify. Much of the discussion until now about the WTO and free trade has been at the level of theory. I am talking about people's lives and what free trade means to those people. What will banana producers in Dominica, St. Lucia and even Jamaica, although it will not be the country worst affected 1053 by a collapse in trade, do? How will they diversify? Will they move into computer programming? Will banana producers in Portland, Jamaica or rural parts of St. Lucia diversify in that direction? No. They will diversify into the only other major agriculture cash crop in the Caribbean and south America, and that is drugs.
When politicians and commentators talk about the merits of free trade, they need to work things through to understand what it means in some peoples lives. Many banana producers in the eastern Caribbean are already being forced out of business. In December 1997 the Select Committee on International Development put these issues to Mr. Eglin, the WTO's director of development, he said:The WTO is there to run a set of rules that essentially open markets.He added:And then the markets do what the markets do.The markets in the eastern Caribbean and in other banana regions are forcing thousands of people into destitution and poverty. These are people who do not want to be dependent on handouts, charity or goodwill. They simply want to grow their bananas, sell them, make a living, send their children to school and lead a genuinely independent life.
§ Ms Abbott
I would not normally stop someone from intervening, but, with respect, I have only a limited amount of time.
The WTO sees itself as operating a neutral system that allows markets to do what markets do. In the specific instance of banana producers in the Caribbean and in many other instances, which I am sure other hon. Members could cite, markets are forcing poor people to ruination.
It does not seem to matter to the WTO that Caribbean countries that are having such a dreadful time because of the threat to their banana industries are, in other respects, examples of the good governance and stable democracy of which we are supposed be in favour. It does not seem to matter that 90 per cent. of their foreign exchange earnings depend on that crop. America has come calling, backed by big multinational money and everything is subservient to that. That is why so many people are angry with the WTO. That is why so many people in the third world are worried about the forward march of globalisation and free trade.
Like a mantra, Ministers, the Opposition and the Liberal Democrat spokesman talk about the glories of free trade. What I want to know is: if free trade is so good, why do not Germany, Japan and America go in for more of it? It is a bit like hard work. One of the mantras of new Labour is that everyone should go out to work. I am an old-fashioned socialist, as the House knows. I always say: if work is so wonderful, why do not rich people do more of it? We cannot for a minute have free trade in exporting rice to Japan. Through all manner of means, the Japanese have protected their rice industry and the communities that depend on it.
As for freely exporting agricultural produce to America and Europe, one of the worst things about the free trade regime that we are asked to applaud this afternoon is that the domestic agricultural industries of small third world 1054 countries are forced into ruin because of competition from some of the most heavily subsidised agricultural industries in the world: those in the European Union and America. How dare American and European politicians lecture the world on free trade when their agriculture is so heavily subsidised?
Of course free trade is important. Of course, the WTO's role of setting the rules and attempting to have a level playing field is important, but let us not forget that the world operates at the level not just of abstraction and theory, but of real people and their lives. If the House could talk to some of the poor rural people in the Caribbean to whom I have talked about how they see the WTO's activities, we would not hear the unthinking praise of free trade that we have.
Something can be gained from the collapse of the Seattle round. All sides should come to the table genuinely to ensure that the WTO empowers poorer and developing countries, to bring transparency to its activities and, above all, to find a way and framework in which the issues of poverty reduction, development and genuine equality in the world order can be brought to bear in the sterile workings of the WTO.
§ Mr. David Curry (Skipton and Ripon)
Those who argue against the virtues of free trade should consider the opposite, which has been tried for a long period and has demonstrably not worked. I happen to be the director of an organisation that seeks to help countries that were within the Soviet orbit and are now democracies to build capacity, democratic institutions, a neutral police force and a neutral civil service. One of the things that they all seek to do is join the World Trade Organisation to establish free trade because they see it as a buttress of the democratic process. The creation of open markets is seen as part and parcel of that process.
Therefore, in talking about free trade, let us not think that we are talking merely about something that represents the self-interest of multinational corporations and that it is remote from the way people lead their lives. There is a close link between being able to choose what we buy and being able to choose whom we vote for. We should keep those two things closely in correlation.
It has been an interesting debate. The right hon. Member for Chesterfield (Mr. Benn) talked about the problems of the global economy and multinationals and then praised the protesters. Of course, the protesters were brought together by the exploitation of the industry that perhaps represents global technology at its most efficient: the internet and e-mail. We should call it the Microsoft soft round if we were to acknowledge the role that Mr. Bill Gates is likely to play in the final outcome. Here is a global industry that has empowered the individual. The individual with a computer and a terminal has never been so powerful, able as he is to participate so effectively in world affairs. Global business is being matched by the global lobby, so the balance is maintained but in a different dimension.
I still think that the argument for free trade is overwhelming because it has been the motor of economic growth since the war. The growth in trade has run ahead of the growth of the economies of all participating members. It is a moral as well as a material argument. Cutting trade barriers is cutting taxes cut for every citizen.
1055 The WTO is obviously the victim of its own success. It is being asked to deal with problems that are not its to deal with; they are the business of other bodies. That is not to say that we should not recognise those other concerns. The argument is not about whether they are legitimate, but about the correct way in which to progress those concerns. What is the mechanism that works without destroying what we have already?
A trade body cannot deal and should not be asked to deal with labour conditions. It should not be asked to deal with the environment. If we are going to tackle those issues—frankly, the WTO neither creates nor solves environmental problems—we need effective international bodies. The WTO should be the model for those bodies, not the model to be demolished.
We have to recognise—as the Secretary of State for International Development and my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) have said—that issues are interrelated. For example, the great Kyoto negotiations took place some years ago. I have a strong suspicion that my right hon. Friend was at those as well. He appears to have a particular entrée to such negotiations. It is a particular predilection, but it is one that he has so I can understand his wishing to pursue it.
The Kyoto agreement has not yet been ratified. It would be absurd to seek an agreement on a new world trade round that made it impossible to implement the Kyoto agreement. That is what we mean by the establishment of relationships between separate processes, but it is important that Government should attribute the same importance to those different processes, so that they are not seen to regard one as mandatory and another as discretionary.
Again, the concerns about labour market conditions and the environment are important, but, as my right hon. Friend the Member for Suffolk, Coastal has said, labelling, which gives the consumer a choice, is one of the ways in which to deal with those concerns. If developing countries are not satisfied with what we have at the moment, they will need a new round as well. If they like what we have at the moment, that is fine. If the exploitation that the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) talked about really is a problem, surely that will indicate the urgency of a new world trade round, not that we should withdraw from the structure that seeks to create a framework of regulation.
Let us remember that Europe has proposed duty-free entry for industrial goods from the least developed countries in the face of hostility from the United States. It has to be repeated: the choice is not between global capitalism and a village economy that is based on three acres and a cow; the choice is between the existence of an international trade framework and the non-existence of such a framework, whereby the richest and most powerful world corporations will be even more powerful than they are now.
It is the job of politicians to try to promote globalisation upwards so that if business is globalising, we develop political frameworks that are capable of operating at the multinational level. We should seek also to push down to people political democratic responsibility so that they are able to deal with their own affairs. Globalisation is one phenomenon of the modern world, but atomization— 1056 pushing down responsibility to, for example, a school board or to a community group, perhaps to administer a regeneration programme—is another, complementary one.
At Seattle, the real crisis was provoked by the inexcusable behaviour of the United States in insisting not only on provisions on labour conditions, but on conditions backed by trade sanctions. It is worth remembering that it was the United States that called for the new round, that designated Seattle and that decided on the high-profile presidential launch. If the United States decided that the interests of protectionist trade unions mattered more than other considerations, it might have been better if it had made that choice earlier. We have been there before, and we know the destructiveness of such demands.
Three years ago, at the previous WTO ministerial meeting, in Singapore, we heard exactly the same row, over exactly the same issue, and it took five days to resolve. It was resolved only because a group of developed and developing countries—including India and Pakistan, with South Africa acting as go-between—managed to construct a compromise that dropped the demand for trade sanctions to back rules on labour market behaviour.
President Clinton has dropped the demand, which itself was another example of destructive high-level bombing with inadequate identification of the target. It is difficult to appreciate the logic in, for example, negotiating with China on WTO entry but saying that sanctions to back labour market regulation are an indispensable United States demand. The statements are incompatible and are simply an invitation to Congress to refuse to ratify Chinese WTO membership. It is a regrettable incoherence in the American position.
My hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) mentioned agriculture. Agriculture is not merely the dog that did not bark in the negotiations; it is the dog that does not need to bark in such negotiations. The future of agricultural reform was prescribed in the Uruguay round of negotiations—not only the direction of agricultural reform but the reform timetable has been prescribed in those negotiations.
The matters that the Government agreed at the most recent round on common agricultural policy reforms were more academic than important. However badly the Prime Minister behaves, the European Union is locked into those negotiations and has no option but to reform. The European Union knows that if it wants to participate in world food markets, the time is limited in which it may do so with the aid of subsidy. Reform is an inescapable part of those negotiations, which have already been signed and sealed, and does not depend on the Seattle process to continue.
In earlier negotiations President Reagan made the same extreme demands, which were dealt with. President Clinton is now repeating the demands, although it is perhaps worth noticing that, for the past few years, he has been hurling money at American farmers in response to some of the crises in American agriculture.
We therefore have the familiar ritual between the Europeans and Americans. To avoid too much focus on agriculture, the European Union tables lots of other demands, which are meritorious in their own right, as a form of electronic interdiction; to avoid those demands, the United States and the Cairns group table offers that the European Union finds attractive and important. 1057 The European Union is tempted by, for example, proposals addressing important issues such as intellectual property. Anti-dumping is another important issue which is used abusively, particularly by the United States.
The demonstrators were often arguing against each other. However much the trade unions ascribed to themselves the right to prescribe what the developing world wanted, they were arguing against the stated interests of the developing world.
There is a real moral choice in the matter. What is the moral response to a situation in which a child in India is making footballs to pay for food for the family or for education? How many people in India, perhaps working in airline ticket processing offices, come from families who owe their start to practices that we should not wish to have in our own country and should like to see ended in India? Addressing those issues will involve a moral choice, and not a simplistic one. As the Secretary of State for International Development said, the danger is that we will push developing countries further into poverty by blocking the one avenue that they have to exploit a resource they have—currently, cheap labour is a resource that they have.
Targeting globalisation seems to be politically easy, but is intellectually and economically misplaced. Globalisation is a much smaller cause of job loss than is technical change, deregulation, competition and changing consumer tastes. The response to globalisation should entail a much greater emphasis on training and education. Labour standards, like birth rates, are largely a function of economic development. Trade sanctions cannot effectively improve labour standards.
I do not think that there are irreconcilable differences. The WTO is now on its ninth round, and there have been crises before. However, the round must be launched as soon as possible. Although, realistically, we shall probably have to wait for the new American President to be in office before the new round commences, reform should not depend on that.
There are various interesting reform proposals, such as opening up the disputes procedure, which was an improvement on previous mechanisms. We now have a system whereby disputes are brought into a forum that provides a sanctioned retaliation process. Previously, the retaliation process was wild.
The disadvantage is that the current system is a prism that tends to focus debates on, for example, bananas—which the hon. Member for Hackney, North and Stoke Newington was talking about—or on beef hormones, which my right hon. Friend the Member for Suffolk, Coastal dealt with. We have at least to ensure that, in those arguments, perhaps non-governmental organisations are able to make representations so that the balance of argument may be weighed more transparently, and perhaps also so that a greater range of arguments is considered in the debate.
I sympathise with the view expressed by my right hon. Friend the Member for Suffolk, Coastal that perhaps a parliamentary scrutiny body could at least enable the WTO to explain and make its case more effectively.
I hope that the Government will do two things, the first of which is to argue the moral case for free trade. The Government often show a marked reluctance to argue their case. Although they say that they are intellectually convinced on an issue, they do not seem to want to 1058 convince anyone else of it. The Secretary of State for International Development is an exception to that. I noticed that the recent problem with the euro was dealt with by having the Minister of State, Foreign and Commonwealth Office, the hon. Member for Leicester, East (Mr. Vaz), trundle around on a train or on a bus, whereas the Chancellor of the Exchequer remained in absolute Trappist silence throughout. There has not always been such silence.
Although the current argument on Anglo-French defence has much merit in it, the running has been made entirely by opponents of joint defence. The Government do not seem to want to get out and argue their case. World trade is more important than either of those issues; the Government must therefore get out and argue their case.
Secondly, the Government must recognise the validity of the concerns that have been expressed, at least when those concerns are not simply protectionism masquerading as altruism. However, they have to pursue the matters in appropriate bodies, with sensibly established relationships and structure. That is where process really is important.
We shall probably have to wait until after the United States elections to have someone with the confidence to be able to take the negotiations forward, free from a political timetable. The issues are enormous, material in their effect, moral in their force and—I persist in believing, despite the representations of some Labour Members—essentially intertwined both with individual empowerment and improving the democratic process on our planet.
§ Joan Ruddock (Lewisham, Deptford)
I thank my right hon. Friends for all the initiatives that they have taken in this matter and that they have conveyed to the House today.
Although I was very much of a sceptic before the Seattle talks began, I accepted and supported the Government's aims of trying to balance free trade with environmental and developmental concerns—in short, trying to make the World Trade Organisation work for the world's poor rather than, in Oxfam's words, being "loaded against the poor". However, when it became clear that Commissioner Lamy had entered into a stitch-up with United States negotiators on genetically modified organisms, I for one was relieved that the talks had failed, since such a deal would have been profoundly unethical, undemocratic and hugely damaging to developing countries.
The World Trade Organisation's attitude to genetically modified organisms goes to the heart of a rules-based system. What should take priority—the rules on free trade or those designed to protect people and the environment? Compromises are often desirable, but they are not always possible. Sometimes an absolute choice has to be made.
By common consent, the jury is out in Europe on GMOs. We cannot be sure that there are no long-term effects on animals or humans from eating them and we have a host of reasons for believing that they may have adverse effects on our environment. To their great credit, Labour Ministers have adopted the precautionary principle, after the previous Government's reckless leap into the dark. United Kingdom citizens have the right to say no to GMOs and to insist on accurate labelling and separation. In the United States, no such consumer rights 1059 were developed alongside the new technologies. In Seattle it became clear that the United States was determined to use the WTO to threaten the rights of citizens and Governments worldwide to restrict trade in genetically modified organisms.
Earlier this year, as the right hon. Member for Suffolk, Coastal (Mr. Gummer) recalled, the same US intransigence over the hierarchy of rules and their insistence on free trade above all else caused the breakdown of the talks on the biosafety protocol, which is the appropriate forum for a discussion of genetic engineering. GMOs raise health, environmental, social and economic issues that cannot and should not be dealt with in the WTO. The potential risks and impact of GMOs in the UK have been well rehearsed in the House and I do not propose to dwell on them, but the economic consequences for the developing world are less well known.
World trade in biotechnology is not about improving crops for home consumption, but about controlling the production of food for export markets, including from developing countries to rich consuming industrialised countries. Closely allied to the development of genetically modified crops is the business of patenting life forms, covered by the World Trade Organisation trade-related intellectual property agreement—TRIPS for short. Both are profoundly threatening to the three quarters of the developing world's population who live and trade or die on the land.
The development charity ActionAid has documented the threats in a recent report called "Crops and Robbers". Proper concern for safety and the environment has led the Government to limit the introduction of GM crops to farm-scale trials and monitoring for a minimum of three years. Within those three years, the biotech companies expect 550 million hectares—more than half of the GM crops planted worldwide—to be planted in developing countries. The lobbying of those companies, in concert with the United States, led to the collapse of the talks on the biosafety protocol, which was aimed at developing an agreement on the safe transfer, handling and use of GMOs.
The consequences for poor farmers in developing countries are profound. Seed saving is a way of life for 1.4 billion farmers around the developing world. Using GM patented seed means having to buy new every year. It means having to buy the relevant pesticides or herbicides and becoming enslaved to corporate agri-business. I shall share with the House the bizarre but true story of a farmer caught up in such agri-business. He grew his oilseed rape every year for 40 years. He sprayed the edges of his fields with herbicide that killed the weeds and any oilseed rape in the vicinity. Imagine his surprise when last year all the weeds died but the oilseed rape continued to grow. The farmer grew his crops from his own saved seed, but his neighbours were growing GM herbicide-resistant oilseed rape. He quickly realised that his crop had become contaminated with the GM crop.
Hon. Members might believe that the farmer had cause to complain to Monsanto. On the contrary, Monsanto sued him, demanding the return of the seeds or the crop containing the patented genes, plus punitive damages for illegally obtaining the seeds, plus the company's court costs. That is the nature of the biotech company that confronts the world's poorest farmers, yet the story that I 1060 have related is not that of a poor South American or Indian farmer. He is a third generation Canadian farmer with a prairie farm. Percy Schmeiser is now counter-suing Monsanto for defamation and what he calls disregarding the environment. As he said, he did not watch his grandparents clear the land and build a farm to have the profits taken over by a big multinational. The world's poor farmers would share his sentiments, but they have no way of mounting such a legal challenge and defence.
In parallel with the loss of control for nation states and individual farmers over trade in GM crops comes a new threat: the extraction and patenting of individual genes, proteins and gene sequences. The south is the source of 90 per cent. of the world's biological wealth, yet industrialised nations hold 97 per cent. of all patents. Already corporate control extends over the world's staple crops through patents on forms of maize, potato, soya bean and wheat. The higher prices on patented seeds and accompanying royalties are likely to outweigh any possible benefit that genetically modified crops might bring to poorer farmers.
Even more alarming is the potential for substitution of whole crops in the laboratory. The 600,000 cocoa farmers in Ghana provide about 40 per cent. of their country's foreign exchange income. What would happen to the Ghanaian economy if the west no longer wanted cocoa? It could happen. Mars UK has just obtained two patents on the genes for cocoa flavour from west African cocoa and Dupont has a patent for a gene that can produce a substitute for cocoa butter.
I have limited my remarks today to aspects of TRIPS because of its central importance to food security and trade for developing countries. I believe—as do many non-governmental organisations such as ActionAid, Oxfam and the World Development Movement—that TRIPS should be amended to enable countries to exclude from patentability all genetic sources for food and agriculture. While the crucial distinction between invention and discovery should protect such sources at present, the bio-piracy cases, such as basmati rice, prove otherwise.
I urge my right hon. Friends closely to consider the evidence for such amendment because, as other speakers have noted today, these talks are part of the continuing round, not a new round. The collapse of the Seattle talks has given us much-needed breathing space. I very much welcome my right hon. Friend the Secretary of State's commitment to the reform of the WTO. The leading role of the UK Government is especially welcome, given our close links with the many developing countries in the Commonwealth.
Many of the reports from Seattle suggested opposing agendas between NGOs, and between NGOs and developing countries. I was not there, and although I am sure that there is some truth in that, I have met many NGOs in this country—particularly from the development field—and their conclusions on the way forward show a remarkable degree of consensus. I urge my right hon. Friends to continue the dialogue with them.
Ways must be found to make the WTO more transparent and more democratic. The growing voice of the poorest countries must be given due weight, and the review of the processes must include an assessment of the impact of the WTO agreements to date, including the Marrakesh decision, which has never been implemented.
1061 New guiding principles—including sustainable development and poverty reduction—are required. Critically, the relationship between the WTO rules and international conventions and treaties on human rights and the environment—particularly biodiversity—must be clarified.
I warmly welcome the Government's proposals for reform. I say to Ministers that they will have the support of all right hon. and hon. Members if they pursue with the utmost vigour the establishment of a democratic rules-based trading system that has poverty reduction at its heart.
§ Mr. John Horam (Orpington)
I am glad that the hon. Member for Lewisham, Deptford (Joan Ruddock) referred to trade-related intellectual property rights, which are extremely important and can be discussed now, as they are a subject for review. There is also the advice from the sustainable development panel to take into account. Something can be done here and now, irrespective of what happened at Seattle, which is of immense importance to agriculture in the third world.
The approach that my hon. Friends and I who serve on the Select Committee on Environmental Audit have taken to these issues has been through the spectrum of sustainable development. That concept has become very chi-chi and acceptable in recent years, and has strengths and weaknesses, but in this context, it is highly relevant. We are looking not only at economic and trading questions, but particularly at social questions arising from the horrendous poverty in the low-income countries of the world and at the environmental damage that trade can do. It is particularly important to see these issues in that context.
The Government's willingness to take account of environmental as well as developmental considerations has been impressive. I was glad that the Minister for the Environment was present in Seattle as well as the Secretary of State for International Development.
Having praised the Government, I shall now take a little of that praise away. The Select Committee report criticised the Government for one fundamental flaw in their approach to the negotiations, relating to the choice that they had to make between going for a comprehensive round and the built-in agenda from the previous Uruguay round. The Government made a mistake in going for the comprehensive round rather than the built-in agenda, which is limited to agriculture and services.
§ Clare Short
I know that the hon. Gentleman is concerned about the environment, and anyone who wants change must accept the need for mutual recognition of multilateral environmental agreements. We need enough issues on the table for all sides to gain enough, so that they will move to get an agreement. We cannot get an agreement on new and complex issues without a broader round.
§ Mr. Horam
I do not agree with the Secretary of State. She used the word "complex" and these are very complex issues. The problem is that the capacity of many of these countries to deal with complex issues—which are made more complicated if they are expanded—is limited. As we know, the United States has 250 permanent 1062 representatives in Geneva, while 35 countries have none. We need to build capacity if we are to deal with the complex issues.
In addition, it is not just a question of the capacity of the countries of the third world—it is also a question of their suspicions. The hon. Member for Hackney, North and Stoke Newington (Ms Abbott) said, rightly, that we have to look at the matter from their perspective as well as our own. The deal that those countries have got over the past 20 years as a result of successive trade rounds is not very good.
The World Development Movement has stated that 59 of the poorest countries of the world have seen their gross domestic product decline over the past 15 years. We are used to an ever-expanding GDP. We think it is a terrible problem if our GDP does not expand for two quarters in a row, whereas those 59 countries have seen a 15-year decline. When it comes to trade liberalisation, therefore, we have to address questions of trust and suspicion
One reason for the decline is the collapse in commodity prices, which has been a huge factor in depressing the standard of living in many third-world countries, and there are also political reasons. However, some trade liberalisation has contributed to the collapse in the standard of living in some of the poorest countries. It is not only the concept of trade liberalisation being put into practice that has presented them with difficulties, but the fact that it has not been well implemented. Some of the provisions for agriculture and textiles, which would have benefited the poorer countries, have not been implemented, but others, which damage them, have. Those poorer countries regard trade liberalisation with great suspicion and we have to take that into account.
No proper appraisal has been made of the consequences for the world of the previous trade rounds. As we know, the European Union, which is representing the UK in the rounds, has begun a process of appraisal. As it happens, it has been mainly done in this country and Manchester university has taken the lead in the research. However, what has been done so far is purely a scoping exercise and the real appraisal has yet to come. Despite that, we are talking about starting a further round in the next calendar year. We need a properly sequenced appraisal of the consequences of the last round to enable us to learn the lessons from it before starting the next round. It has been pointed out by hon. Members on both sides of the House that the existing discussions have not been open enough. That is not just a question of the relationship with civil society—although that is important, as several hon. Members have said—it relates to what actually happened in Seattle. I was not there, unlike my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), who always seems to be at the big environmental dos. I wish I had his luck. The fact remains that many who were invited to the conference by the director general of the WTO found that they were locked out of the so-called green room, where 30 or so of the leading countries were holding the real negotiations. It is no wonder that the excluded representatives were reduced to thumping the table and behaving in a somewhat unmannerly fashion when they discovered the real situation.
I would plead for a more inclusive approach—and the Environmental Audit Committee would, I believe, take a similar line—which is essential, as well as a more measured approach. People say that we cannot turn back 1063 the clock—that we must carry on. Why? Trade happens every day. Do we need to rush into something that could have serious adverse consequences for participants without thinking more clearly about the effects?
I agree with the hon. Member for Lewisham, Deptford (Joan Ruddock) and others about the advice that is being given to the Government as they move forward. I would like to see the conference on reform of the WTO actually taking place and being taken seriously. Who takes part and how participation takes place are both important. I should like to see the funding of increased capacity to take part in the negotiations being taken seriously and I welcomed the words of the Secretary of State for Trade and Industry about the Government's commitment to that.
The interface of the negotiations with environmental treaties should also be considered, and that can be done separately from the other discussions. For example, the multilateral environmental agreements, of which there are some 230 throughout the world, must be examined closely. The European Union, which is our negotiating arm, must take environmental questions more seriously than it has so far.
I recommend to the House the further report by the Environmental Audit Committee. In addition to the one we produced on the agenda for Seattle, we also produced one on the agenda for Helsinki, which starts this evening. We point out that environmental integration should be a top priority. Whatever other issues the heads of state address, we want to see the importance of the environment being brought into the mainstream of European thinking.
§ 5 pm
§ Mr. Stuart Bell (Middlesbrough)
I am pleased to follow the hon. Member for Orpington (Mr. Horam), with whose analysis of the early situation I entirely agree. In opposition, I was shadow Minister for Trade: I thought then that it was more appropriate to complete the Uruguay round before a new, comprehensive round was embarked on. That was also the view of the United States Government at the time.
However, a conversion on the road to Damascus—or Seattle—changed the US opinion, with the consequences that we all saw. The conference was ill prepared, and different nations had different agendas. For example, Japan and India were concerned about the US stance on anti-dumping, while the UK had an agenda towards the third world; the US had an agenda with regard to the common agricultural policy, and the European nations had an agenda of their own. No country had an agenda for itself, but all countries had agendas for other countries. It was not surprising, therefore, that the talks collapsed early.
The hon. Member for Orpington mentioned the green room discussions that took place towards the end of the conference. I agree with him that many countries did not attend the talks because they could not afford to go. However, until the green room talks, the fact that meetings were split between four groups of countries meant that all countries attending had an opportunity to take part in the discussions. The problem was that all countries had a set agenda from which they were not prepared to move. The conference collapsed because most of the member states attending thought that that was preferable to reaching agreement. That does not augur well for any future round of talks.
1064 The hon. Member for Orpington also made the interesting point that, after all the trade round discussions held over many years, the gross domestic product of 59 countries had fallen. However, as he noted, the collapse of commodity prices demonstrated that other economic forces were at work. Those forces impinge on the development of free trade but are related neither to the conference at Seattle, nor to the World Trade Organisation.
I was highly impressed by my right hon. Friend the Secretary of State for Trade and Industry, not only for his speech today but for his conduct at the discussions and negotiations in Seattle. I continue to follow trade matters, especially in the European context, and many observers from outside our country who were at Seattle have commented on my right hon. Friend's performance.
My right hon. Friend spoke of trade liberalisation into the 21st century. We should be grateful for small mercies—in this case, the fact that he did not talk about trying to lay down a trade policy that would last through the next millennium. Instead, he was content with a policy for the next 100 years.
I am grateful to my right hon. Friend the Member for Chesterfield (Mr. Benn) and to my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) for ensuring that the case of poor countries has been heard today. However, after what happened in Seattle, all nation states, rich and poor alike, will feel the need to move forward on a number of fronts in the face of increasing globalisation.
When we consider Seattle, we need to get the context right. My right hon. Friend the Secretary of State was right to point out the significance and importance of trade for the United Kingdom. We are the fifth largest exporter of goods and services in the world: 25 per cent. of our GDP takes the form of exports, and 5 per cent. of all world trade emanates from the UK. We must not overlook those facts.
The Labour party has always said, in opposition and in government, that it believes in the goal of fair and balanced trade under the auspices of rules-based organisations such as the European Union and the WTO. The rules of the WTO appear to have worked effectively, and its disputes panel has done its job. Although we in the European Union may be unhappy that rulings on banana importations—referred to by my hon. Friend the Member for Hackney, North and Stoke Newington—and on hormone-treated beef have gone against us, it should be noted that the WTO has also found against the United States on behalf of Venezuela, Brazil and Costa Rica.
The hon. Member for Tiverton and Honiton (Mrs. Browning) listed earlier a number of sectors in our country which have been penalised as a consequence of the WTO's decision on banana importations. As a result of a debate in this House and the representations of the Department of Trade and Industry, the cashmere industry was removed from the list. The combined consequence of events in Seattle, the disputes panel and the fact that no overall agreement was reached is likely to be more skirmishing rather than a trade war.
The hon. Member for Twickenham (Dr. Cable) made an impressive and cognisant speech. He clearly knows his subject well—he even knew that the WTO had bowed to Costa Rica. The United States has lost cases before the disputes panel. The right hon. Member for Suffolk, 1065 Coastal (Mr. Gummer) touched on that in his speech, saying that it was surprising how much power we had given away to the World Trade Organisation. The hon. Member for Twickenham also mentioned that.
What do we want? Do we want to deal with a rules-based trade organisation? Do we want to withdraw our ambassador when we have a trade dispute? Do we want to send in a gunboat, as we did in the last century? Or are we willing to submit our disputes to the World Trade Organisation and the disputes panel? We have to live with the fact that the WTO is rules based and has a disputes panel, and we should accept its rulings.
My right hon. Friend the Member for Chesterfield referred to workers' rights. They were, and should be, at the heart of the programmes for the WTO. The essence of the former general agreement on tariffs and trade was that nation states would recognise that the economic endeavours in their trade relationships would be a quest to raise living standards. Trade deals and trade organisations count for nothing if they do not raise the living standards of people throughout the world. The essence of GATT, which has been passed on to the World Trade Organisation, is that an effort should be made not only to raise living standards but to ensure full employment, built upon the development of the world's resources by expanding the production and exchange of goods.
Workers' rights are extremely important. The hon. Member for Tiverton and Honiton spoke about child labour, as did the right hon. Member for Skipton and Ripon (Mr. Curry). We should not be afraid to look at the issue. My right hon. Friend the Secretary of State referred to a conference at INSEAD, just outside Paris, where they discussed bringing in the International Labour Organisation, the World Trade Organisation, the United Nations and the World Bank to examine workers' rights. My right hon. Friend the Secretary of State for International Development said, quite rightly, that they should run in parallel—the ILO should look at workers' rights and the WTO should look at trade matters. If we work along those lines, we should reach a consensus.
My right hon. Friend the Secretary of State for Trade and Industry also mentioned tariff-free reimportations from less developed countries. That proposal has been put to the European Union. I hope that it will be put to the conference on 15 December between the United States and the European Union.
I could have wished for more time in which to speak in this debate, but I want to allow as many of my hon. Friends as possible to speak. After Seattle, there may be a mountain to climb on the terms of a new negotiating round, on the so-called inbuilt agenda, on accessions such as that of China and on the business of applying the rules transparently and consistently to all. It is said that faith can move mountains—that, of course, is not the case. I am grateful to my right hon. Friend the Member for Chesterfield, who twice referred to the deity in his speech.
In fact, it is not faith but the illusion of faith that moves mountains, which will inspire men and women of good will to seek to advance in the areas left in abeyance at Seattle. They will do so not to satisfy narrow commercial interests, or to satisfy profit as greed, or to serve mammon, as my right hon. Friend the Member for Chesterfield said. We want the member states of the WTO to seek development in their countries so that 1066 individuals—men and women—may have opportunities. Those opportunities should apply not only to those living today, but to their children in their lifetimes.
When the dust has settled in Seattle, and when the pepper gas that afflicted even the right hon. Member for Suffolk, Coastal has dispersed, we shall see what the trade agenda is. If we move slowly, we should move positively. We should fully support the proposals advanced today by the Secretary of State for Trade and Industry for both the EU and the WTO.
§ Mr. Deputy Speaker (Mr. Michael J. Martin)
Order. Several hon. Members have asked me when they might be called to speak. I have not been able to assist them until now, but as six more hon. Members wish to speak, if each of them takes 12 minutes, we should be just in time for the wind-up speeches. I am in the hands of the hon. Members concerned; if they speak for longer than 12 minutes, as they are entitled to do, someone will be disappointed.
§ Mr. Jeremy Corbyn (Islington, North)
In a spirit of negotiation, Mr. Deputy Speaker, may I offer you 10 minutes? That will allow others to go on a bit longer as I am sure that they will have much to say.
The World Trade Organisation is portrayed as trying to sort out the problems that face the poorest peoples of the world. However, some figures may depress those who claim that increasing free trade around the world helps the poorest. Since the Uruguay round, world trade has increased by roughly £200 billion. Some 70 per cent. of the benefits have gone to industrialised countries. Transnational corporations control 70 per cent. of world trade and 80 per cent. of all foreign investment. One third of developing country members of the general agreement on tariffs and trade earn most of their foreign exchange from agriculture, and a fifth or more of it from textiles and clothing—the two sectors most prayed against by the richest countries of the world.
Since Uruguay, the reality has been a rapid shift of power and wealth from the poorest countries to the richest. To say that benefit has been fairly spread is to fly in the face of reality. All that my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) said about the plight of small farmers in the eastern Caribbean could be repeated 100 times for countries throughout sub-Saharan Africa in which agricultural production has been damaged by the import of western food, and where manufacturing industry is at a standstill in countries not allowed to sell their goods elsewhere. Yet those countries are told that the most important thing in the world is to pay off their debts and adopt the programmes of good governance ordained by the International Monetary Fund and the World Bank.
As we reach the end of the 20th century, I see a bitterly divided world. The gap between the richest and the poorest has never been bigger, and it is growing fast. The poorest people in the poorest countries face an ever-tightening spiral of worse living standards, worse education and worse public services. They also face greater investment of multinational capital as it exploits the low wages on offer.
The global environment is being seriously damaged. Sustainable agriculture is best performed by small farmers who understand the environments in which they work. 1067 The Jamaican and Caribbean banana producers described by my hon. Friend the Member for Hackney, North and Stoke Newington have practised sustainable agriculture for several hundred years. The prairie-type farming techniques of the big banana producers in central America and Colombia devastate the environment with their high-intensity use of pesticides and herbicides. In the long term, they are also extremely damaging to the ecosystem. They have destroyed rain forests to ensure that sort of production, whereas the small farmers that my hon. Friend described work in sympathy with their environment and have a sustainable form of living. Those issues are very important.
Likewise, the ever-present demand that we should rapidly increase world trade means more travel—more ships and more aircraft. There seems to be something fundamentally wrong when vegetables are air-freighted from the poorest countries, such as Zambia, to European supermarkets to make money for certain companies, but children in Zambia are going without; and when children and others are doing badly in such countries. There is something badly wrong with an economic system that encourages that sort of nonsense.
We need to consider what could be possible and what needs to be done post-Seattle. I have some questions, with which I hope the Minister will be able to deal, if not now then at some other stage.
Why did the Seattle conference become such complete chaos? Why was the American negotiator also the chairman of the conference? Why did that negotiator systematically exclude large numbers of southern and poor countries from any reckoning? A large number of non-governmental organisations were present in Seattle to protest legitimately on behalf of the poorest people of the world—after all, a quarter of the world's population lives below starvation level and has a right to be heard.
However, in the home of Microsoft and Boeing, the Seattle police, with riot gear and all the rest, destroyed any rights of democratic protest. The protesters were then described as undemocratic people who were trying to disrupt the conference; the undemocratic people were in the conference, excluding the poorest in the world. The representatives of the poorest in the world and, interestingly, of many American trade unions, were on the streets of Seattle seeking justice. We should ask serious questions about why all that came about.
Many people have written a great deal about the north-south divide and how it is to be dealt with. A recent edition of "Third World Resurgence" contained a splendid article by Martin Khor from Malaysia, who described exactly what it means to the poorest countries when the WTO lectures them on competition. It is not interested in competition in those countries; it is interested only in the rights of the biggest global corporations to behave as they wish in the poorest countries. That is what the multi-national agreement on investment—that ill fated agreement, which sadly, is no more—was trying to achieve. I detect that the Seattle round was an attempt to bring back that same agenda for the poorest people.
After the failure of Seattle, Friends of the Earth sent round a memo, which I am sure many hon. Members have. It sets out a series of questions and issues with which it wants the Government to deal. First, it wants a 1068 review of United Nations conference on trade and development and WTO procedures, to find out whether they genuinely represent the needs of the people of the world.
On corporate control, it seems that, post-cold war, the United Nations has largely abdicated any responsibility for controlling what global corporations do, and most national Governments have abdicated their responsibility for trying to control such corporations. In fact, countries are in competition to offer the biggest tax incentive, the longest tax holiday and the largest amount of free land, with the least labour regulation, the least environmental control and the least child protection, to entice these greedy global corporations in, one after the other.
§ The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes)
Does my hon. Friend agree that that is why we need some multinational agreement?
§ Mr. Corbyn
I am not against multinational agreements; I am against an agreement that is designed by, and to benefit, the biggest businesses. That is why I am repeating for the record the issues that Friends of the Earth raised after the Seattle summit.
Friends of the Earth wants to keep investment out of the WTO. It mentions the serious problem of the reform of agricultural procedures, makes a crucial point about intellectual property rights and genetic modification technology and refers to a multilateral environment agreement. The latter is particularly important.
The Rio summit on the environment was seen as a turning point—it was seminal, in that all countries were represented there. They agreed that there were finite limits to the amount that could be taken out of the earth and to the amount of pollution that the atmosphere could take, given its long-term effects. Unfortunately, following the Rio summit, the UN office on multinational corporations was closed. Almost automatically, all economic thinking, ideas and controls were transferred from the limited democracy of the UN system to the World Bank and the International Monetary Fund—both organisations are accountable only to the richest groups in the world.
I am glad that the Secretary of State for Trade and Industry suggested that there would be some support for the increase of capacity-building in the world's poorest countries, so that they can negotiate effectively with companies and other countries, and that there would be some more WTO money for that. We must ensure that the poorest people in the world have a voice in those negotiations. We need to control the world's economy; we should not merely make the world fit for big businesses to operate in. There should be a moratorium on WTO disputes. The US attitude towards the banana conflict—and many similar matters—suggests the uses to which WTO power is put.
My final remarks relate to labour standards and employment throughout the world. The International Labour Organisation was set up after the first world war. It was a triumph for international trade unionism—the principle of basic labour standards all around the world had been achieved. However, many of the ILO conventions—limited though they are—are ignored. Many of the people who work—often at arm's length—for the world's big businesses enjoy no trade union rights 1069 or job security. They have none of the rights that we would expect as a norm in western Europe. If we do not do something about that, employment practices in the industrial countries will also be under threat, as big business moves its interest back to those areas.
I point out to those who say that we should do nothing that it is wrong to sell at high prices in Oxford street all the accoutrements of modern life—rugby balls, footballs, sports shoes at £60 or £70 a pair—when they are made by children in third-world countries who earn £1 or $1 a week. It is right to take sanctions against those countries which exploit children throughout the world. We cannot shrug off that responsibility; we must get involved. We should also pay attention to the practice in many countries of establishing tax-free economic zones for big business, while operating a no-go area for trade unions.
Finally, I draw the House's attention to an excellent article in yesterday's Guardian by Vandana Shiva—a brilliant writer. She stated:We want a new millennium based on economic democracy, not economic totalitarianism. The future is possible for humans and other species only if the principles of competition, organised greed, commodification of all life, monocultures, monopolies and centralised global corporate control of our daily lives enshrined in the WTO are replaced by the principles of protection of people and nature, the obligation of giving and sharing diversity, and the decentralisation and self-organisation enshrined in our diverse cultures and national constitutions.We have an opportunity to do something to make the world a better place. Seattle did not achieve that. We have an obligation to try again in a much more democratic and open framework than was presented at Seattle.
§ Mr. Neil Gerrard (Walthamstow)
Everyone who has spoken in the debate accepts that we need rules. We cannot have a trade system with no rules. The argument is about what the rules should be and how they should be developed—that second point has frequently been raised. It is obvious that, as we could not even agree the agenda for Seattle—never mind debate what the rules should be—there is a long way to go. We should not expect, or try to achieve, a quick fix.
One of the lessons of Seattle is that, if the WTO is to continue, which it obviously will, an enormous amount has to be done to build trust in the organisation. The WTO will need radical reform to achieve that. One of the key demands in Seattle from the representatives of developing countries was a willingness for the WTO to look back—to review what happened in previous rounds and to reform before moving on to wider and new matters.
We need to consider the fundamental reasons for the WTO's existence. This afternoon we have heard a great deal about the merits of free trade. I am not sure why, but something in me always gets suspicious when those on the Government and Opposition Front Benches are in absolute agreement on something. Everyone tells us that free trade is all that is needed—but there are some fundamental contradictions. It is contradictory to say that free trade is all that is needed and then to say that we need a rules-based system. What will those rules be? If those rules impose no restrictions and the only rule that anyone is interested in is that there should be no tariffs, we can forget about who decides what happens to the environment or to labour conditions.
1070 My right hon. Friend the Secretary of State held up eastern Europe as an example, which caused me some surprise because I should not have thought that what is currently happening in some of the economies there is a good advertisement for liberalisation.
The least developed countries' share of world trade has been decreasing. We should not just be arguing about how we achieve a level playing field; the question should be, how do we achieve a playing field that slopes in favour of those poorest people in the world? Their standard of living needs to be lifted. I doubt that a level playing field will ever achieve that.
Trade growth matters less than the nature of the trade—whether that trade is sustainable and whether it is trade that the developing countries want. One of the key questions that we should be addressing is what type of trade do developing countries want?
The hon. Member for Orpington (Mr. Horam) mentioned the fall in commodity prices in the past 20 years. That has had a dramatic effect on some of the least developed countries, and the WTO and international trade rules have no mechanism for addressing that. When a country largely depends on a single commodity, such a fall in prices can be enormously damaging. The example of the banana trade shows that dependence on a single commodity or product leaves a country tremendously vulnerable to sudden movements in price or sudden changes in trade rules. We must somehow shift the agenda to one about the nature of trade and how we can develop trade systems that address poverty and inequality, because unquestionably the present system has signally failed to do so.
I was glad to hear what the Secretary of State said about some of the issues for institutional reform within the WTO. He spoke about the need for capacity-building in the developing countries, which needs to be internal as well as external, so that it is possible to monitor what is happening, whether rules are being applied and what their effects are. He spoke about the need to be willing to listen. He said that we need a more transparent organisation, and that non-governmental organisations should participate. I welcome those comments.
My right hon. Friend said that there should be more participation by parliamentarians in the WTO. Notably, we are holding the debate after the collapse of the talks in Seattle instead of before them, when it might have been possible for Members' views to have had some influence on the Government's agenda at those talks. We are doing things in the wrong order. Future debates should be timed to take place before, not after, such talks.
My hon. Friend the Member for Lewisham, Deptford (Joan Ruddock) made some important arguments on TRIPS. There is a big question about what the TRIPS agreement is designed to do. Is it designed to promote the public interest in the widest sense of ensuring that people, especially those in poorer countries, have access to advances in technology, agriculture, medicine and health care, or is it intended to protect commercial interests?
It is clear in which direction TRIPS is aimed. Let us consider what has happened in the past few years. Since 1985, why have nearly 11,000 patents for plants been registered in the United States? Patent applications at the World Intellectual Property Organisation have increased from 3,000 in 1979 to 67,000 in 1997. India now has a backlog of 30,000 patents waiting to be processed; the number is increasing at 13,000 a year.
1071 Why does a company want to patent basmati rice, to take the example mentioned by my hon. Friend the Member for Deptford? However, a company in Texas now has a patent in the United States for basmati rice. What is the point of that?
I was somewhat disturbed that my right hon. Friend the Secretary of State for International Development said yesterday at Question Time:New inventions are the only intellectual property that can be registered. Under the WTO, there is no threat at all to any traditional knowledge or biodiversity … that is a myth."—[Official Report, 8 December 1999; Vol. 340, c. 811.]I suggest that many people are familiar with the patenting of plants that have been naturally developed by farmers through many years of effort and cross-breeding. Patenting such plants is bio-piracy; it is stealing the work that has been carried out over generations.
Everyone is opposed to any attempts to patent human genes, and the Prime Minister and the President of the United States have made clear their opposition to that. However, why should we be opposed to the patenting of human genes, but not be opposed to patenting plant genes or animal genes? What is the essential difference? We must question why large companies are interested in such patents.
It is surprising what one finds when one considers the areas on which the WTO has an effect. It has impacts on health. One of the articles in GATT gives Governments the right to enforce or adopt measures to protect human, animal and plant life. They are public health measures, but the problem is that the nature of them is not defined. Therefore, we face the difficult problems of beef that has been treated with hormones, genetically modified food and how we resolve disputes over such matters. We must consider how far we should apply precautionary principles.
In May this year, the World Health Assembly, which is made up of representatives from many Governments, adopted a resolution that calls upon member statesto explore and review their options under relevant international agreements",including trade agreements on health—for example, on access to essential drugs. The World Health Organisation has a list of essential drugs and, interestingly, that list is not purely based on the drugs' effects. It takes into account economic considerations and, specifically, the price of the products.
Earlier this year, we saw the potential for dispute. For some time under TRIPS, patent protections on drugs must be available for 20 years. Sometimes developing countries have refused to grant such patents. Instead, they prefer to imitate a patented product and to develop a generic copy. TRIPS would forbid that, although there are get-out clauses that allow, for example, compulsory licensing of drugs.
Compulsory licensing involves a licence within a country to work a patent without permission from the original patentee, while the original patent holds in other countries. Compulsory licensing has been used by many countries for, among other things, defence-related products. It has been used in only a limited number of developing countries because not many of them have a big enough market to develop generic drugs. That is another area that we ought to review.
1072 Seattle has given us an opportunity to step back a little, and to take a fundamental look at the WTO and some of the major areas for review before we move on to new areas.
§ Mr. Jim Murphy (Eastwood)
Like my hon. Friends, I am delighted to participate in this important debate. We can speak only for about 12 minutes each if we are to leave enough time for every hon. Member who wants to speak. Unless one of my hon. Friends wants to volunteer any of his or her time, in which case I would happily speak for longer, I shall try to stick to my 12-minute limit. Perhaps my Front-Bench colleagues would like to give up some of their time.
I shall deal with the criticisms and concerns about the World Trade Organisation that have been expressed in the House and throughout the world. Before I do so, I point out that I do not share Conservative Front-Bench Members' unbridled enthusiasm for freeing the world of all tariffs. That, to me, would be an absolute and unfettered free market, and it would not achieve the level playing field that my hon. Friends want or even an imbalance in favour of the developing nations and those with less strong economies.
I would not sign up to that idea of free trade, and I was surprised by the comments of the hon. Member for Tiverton and Honiton (Mrs. Browning). She is not here, so it may be unfair of me to mention her, but her colleague, the hon. Member for South-West Devon (Mr. Streeter), may respond to that issue in his wind-up. I do not understand how the Conservative party, which was in power for the 18 years during which many of the tariffs were implemented, can now demand the abolition of the majority of those tariffs. I would welcome a response to that from the hon. Gentleman.
I shall comment on three areas: the lack of openness and accountability in the WTO; the need to address the concerns of poorer nations; and the need for the WTO to co-operate with other international organisations and agencies if it is to achieve its objective.
Everyone has mentioned the lack of openness and democracy in the WTO. It is well recognised that reform is needed. We need to change the system of secrecy and the practice of basing newspaper reports on unattributable briefings from people who are alleged to be close to negotiations rather than the participants themselves. We need to involve civic society, including representatives from trade unions and other organisations, and give them full observer status in negotiations.
We need a more effective and quicker negotiation process. Many of the countries that were hoping for some benefit from Seattle will have to wait a considerable time for that benefit while their economy suffers and their people survive for years in levels of poverty that we would not tolerate for one day.
I hope that we can find a way to make sure that those who oversee the disputes use open and democratic procedures to ensure that there is no conflict of interest among them and that they have no vested interest.
On the need for support for developing countries, much mention has been made of the globalisation of the marketplace. I hope that we can concentrate not only on that but on the globalisation of prosperity. We could then 1073 spread prosperity not only in the developed nations but in those with less developed economies. We can no longer be a silent witness to the abject poverty in which perhaps up to 50 per cent. of the world's population lives.
Although there have been interesting and thought-provoking contributions from Conservative Members, I regret that those Members may be in the minority on the Opposition Benches. I stand to be corrected, but I find no echo in Conservative thinking of the many recent achievements and suggestions made by the British Government, who are at the cutting edge of effort in European Union discussions that are aimed at progressive outcomes.
I am not aware that the Conservative Government were in any way aiming at the creation of a civic society or trade union involvement in the International Labour Organisation and the general agreement on tariffs and trade. Notwithstanding the excellent speeches of some Conservative Members, their criticism of the Labour Front Bench has been shallow and not based on anything that they sought to achieve in government.
The idea of globalisation of prosperity must be considered in the context of the point made on the scale of equality throughout the world in a very interesting speech by my right hon. Friend the Member for Chesterfield (Mr. Benn). Although I did not agree with much of what he said, we cannot live in a society—socialist or otherwise—in which the combined incomes of 225 of the richest people in the world is equal to that of 47 per cent. of the world's population. That cannot be allowed to survive, grow and become endemic over generations.
The World Trade Organisation appears to have made some headway in such matters—certainly from the material released by the Department for International Development. It is suggested that economic growth in developing nations has been quicker in the past few years than in developed nations' economies. However, developing nations are starting from a very low base, so we must ensure that such development is not marginally better and faster, but markedly so.
Since 1973, developing economies have increased their share of the world market in exports from 19 to 23 per cent. That is a welcome 4 per cent. improvement, but at that rate, two centuries will pass before they achieve parity with developed nations. That is an intolerable and also impossible situation. The rate of improvement cannot be maintained without reform. I have no idea of—and would not want to guess at—the ceiling of improvement in the economies of developing nations without reform of global markets and the WTO, but parity will certainly not be achieved today, tomorrow or in two centuries' time unless there is such reform.
The secretary-general of the WTO, Michael Moore, publicly said:I will judge my term in office by how we can improve the conditions and opportunities for the most vulnerable economies.That is a very important statement. I do not know how it compares with his predecessors, but our Government and other Governments who believe in a social agenda should try to ensure that his words become as close to reality in as short a time as possible.
Around the time of the Seattle conference, President Clinton seemed to share such concerns. He made some very welcome announcements on sharing prosperity 1074 throughout the world, although it is of course hard to differentiate between those intended for domestic politics and those intended generally. He suggested some important reforms on the sale of drugs and the removing of tariffs, especially on AZT and, perhaps, other drugs, which I welcome. I have no idea how successful such moves would be in challenging AIDS in the developing world, but I welcome it none the less.
There is also the matter of lifting all tariffs on 48 of the less developed economies, which, after all, contribute only 0.4 per cent. of world trade. There is therefore no danger in that, as some believe. That goal has been identified not only by President Clinton but by my right hon. Friend the Secretary of State for Trade and Industry, who said earlier that the European Union will be taking such action unilaterally and hopes to persuade partners in the WTO to follow suit.
Much has been said about sanctions. My hon. Friend the Member for Islington, North (Mr. Corbyn) spoke about trade sanctions against countries that do not adhere to our perceptions and our understandable demands for environmental protection and an end to child labour. My hon. Friend and I agree on the need for the protection of human rights, freedom from child labour and the long-term protection of the indigenous environment in all senses, but I am not convinced that trade sanctions will deliver the necessary support and free those children and their families from poverty.
The argument will no doubt continue, but I believe that instead of sanctions, we should provide alternative means of support so that the kids can go to school and the parents have jobs.
§ Mr. Corbyn
I am interested in the point that my hon. Friend is making. He may not have heard clearly what I said. I said that there should be sanctions against the companies that exploit children and live off the benefits of child labour in third world countries.
§ Mr. Murphy
I thank my hon. Friend. I accept that we should impose economic sanctions against the companies involved, but there is also an argument about economic sanctions against the countries, which I do not support.
Time is limited, and I want to cover other topics. The WTO does not exist in isolation. My right hon. Friend the Secretary of State said earlier that ways of reforming the organisation were being discussed, and that a WTO parliament, council or assembly may be one possibility. I hope that other aspects will be discussed.
The WTO works with other organisations, including the United Nations, and takes account of the difficulties that some poor and perhaps less poor countries face. I think particularly of post-apartheid South Africa, war-torn Angola, and Mozambique, which is trying to recover from a civil war. Regardless of their relative economic position, consideration must be given to the efforts of those countries to free themselves from the legacy of apartheid, which dominated not only South Africa, but much of southern Africa.
The WTO should also take account of international debt. I welcome the Government's support for aspects of the Jubilee 2000 campaign, and their proposals for freedom of opportunity and literacy for 2015. If we are to achieve that globally, the WTO must recognise that many of the countries are highly indebted. Mozambique and 1075 Uganda pay back £100 million a year in international debt, and are both members of the WTO. Regional conflicts, debt levels and the unique challenges that some countries face should all be taken into account.
§ Mr. Alan Simpson (Nottingham, South)
I congratulate all those who were in Seattle as Ministers, observers and protesters, on helping to turn it into the debacle that it was. Nothing has cheered me up like that in ages. Unlike the Conservatives, I have no qualms about our having four Ministers there. The notion that the United Kingdom had four horsemen at the metropolis of free trade is an interesting one. It allows us to be clear about what we need to do in the chaotic space that Seattle created for us.
The agenda was clear. It was a wonderful opportunity to see greed and arrogance overreaching themselves. No doubt America and the corporations that were part of its delegation would say that it was not about that at all. They would argue that it was even-handed—they simply wanted the right to dump GM crops and growth-hormone beef into western markets, at the same time as dumping US grain surpluses into struggling southern markets. They wanted the right to acquire corporate ownership of services in the north and primary production in the south. That provided a corporate sense of balance.
Although the corporations talked about free trade, my hon. Friend the Member for Eastwood (Mr. Murphy) was right to question their belief in the removal of all subsidies. The corporate world is phenomenally good at claiming that it cannot produce anywhere unless it is paid to do so. It wants subsidies, inducements and tax sheltering to produce in our economies and it wants Governments to pick up the cost of infrastructure development. It does not want to accept the attendant obligations. The corporate world does not believe in the absence of subsidies; it simply believes in corporate welfare. Our own debates must take place with that knowledge.
We should be brave enough to define something different to put in the space that now exists. I want to make one or two moderate suggestions that are not out of line with the Labour manifesto—they are simply in line early, with the next manifesto. If we examine the lessons of Seattle, perhaps we should first consider scrapping the WTO. It would be disastrous if we all believed that we had a remit to save it. The United Nations is an international body that already has a remit to consider environmental and human rights agendas. We should consider refounding the United Nations, rather than undermining it in the interests of corporate rather than civic society.
Let us consider where such a refounding would lead. The notion that trade has meant emancipation for all and been synonymous with progress is a monstrous distortion of our recent past. Hon. Members have cited examples of market liberalisation in Europe. I invite them to read the United Nations Environment Programme's report on eastern Europe. It describes eastern Europe as an environmental catastrophe, in which civic society has almost been stripped to its basics; where democratic processes have been torn apart and economics have been reduced to gangsterism. That is the result of market liberalisation in eastern Europe.
1076 Hon. Members also cited examples of the phenomenal early successes in parts of south-east Asia. It has been illustrative to contact colleagues and campaigners in the southern hemisphere through the internet in the past year. They say that this came from their ability to get huge subsidies from the United States, and its agencies in the World Bank, because of their terror of the spread of communism. The United States threw money at such countries in the southern hemisphere, which were able to invest in their domestic productive capacity behind protective markets. They were allowed to do that, and they did jolly well. However, in Seattle, only countries such as India said that the idea of free trade in agriculture would run through the planet like a plague of locusts and that the developing world needed a different approach to subsidies.
The world needs to subsidise the environmental goods while restricting and taxing the environmental bads. India presented a proposal for allowing developing nations to subsidise or protect their domestic industries to the point of food security and sufficiency. They should be able to define the terms for their own development. It should not be conditional on transferring the ownership of their primary producing resources, but by retaining them and not allowing resources to migrate around the planet in pursuit of the most exploitative rates of return and interest.
Those who advise us to go down other paths should bear some of the huge consequences in mind. People claim that it will be great when Poland joins the European Union, but they fail to mention that the radical reforms Poland must accept mean pushing 2 million people off the land. Those who welcome China to the WTO manage to avoid mentioning the fact that its entry presupposes that 100 million people will be pushed off the land or banished from existing employment. This will force human migration on a scale that we have never even begun to countenance, and the consequences in terms of social destabilisation will be massive.
Martin Khor, who was mentioned earlier, was one of those who at Seattle said to the west, "You have got to start to question whether trade has brought us prosperity. It hasn't. It has transferred corporate ownership without democratic accountability into the hands of the most powerful on the planet. We see that as a pillaging process, both in the context of the industrial world and the developing world." I had occasion earlier in the day to mention another aspect of globalisation, which has appeared in my constituency.
This is the last day of mass production for Raleigh as a cycle frame manufacturer in the UK. Tomorrow, it is selling off its equipment, which is the most up-to-date in the world, under the auctioneer's hammer. The equipment was installed only three years ago and will most probably be sold to competitor companies from China and Taiwan; companies which do not have to adhere to any labour standards, recognise any objection that they employ and exploit children, or conform to environmental obligations. Raleigh will say, "How can we meet the environmental obligations that you rightly expect us to meet as producers in the industrial world when you also ask us to compete in a price-only market, which is a beggar-your-neighbour race to the bottom of the barrel?"
In Seattle, trade union marchers—industrial workers and steelworkers from throughout the United States—found themselves walking hand in hand with the non-governmental organisations and lobby organizations 1077 from the south. A new dialogue opened up between workers without jobs in the north and workers without rights in the south. They are saying, "Here is a game that strips rights, entitlements and secure prospects from us all.
The WTO is not an accountable body and it cannot address human rights issues. Nor does it want to. In July, Richard McCormick, the vice-chair of the International Chamber of Commerce—one of the main organisations lobbying the WTO—addressed a meeting of world leaders and said that the globalisation project may be terribly fragile. He added thatits link with labour, its link with environment, could cause disaster in the trading system".Yet that trading system is the disaster that protesters at Seattle were trying to draw to our attention. It strips us of anything sustainable in terms of human or environmental dignity and security. Asking a body that is so committed to excluding environmental and human rights considerations to take them on board would be like asking Jeffrey Archer to be responsible for truth—it simply is not in the nature of the beast to deliver such a commitment.
We have to return responsibilities to the United Nations. The third world is demanding that we look at how we target subsidies—in our own context, perhaps in favour of organic rather than chemically intensive production. We must also look at subsidies in terms of the developing world itself and its access to limited markets in which it can address food security—in the same way as we must—and build in binding obligations as well as producer responsibilities and liabilities. These must not be in parallel with other discussions, but must be part of the legally binding obligations that will define security for the next century.
A debate is already taking place outside the corridors of government and it involves not only the representation of the rights of the poor in the next century, but place new constraints on corporate activities. No representation without taxation will be the first demand—no influence without obligation. After Seattle, that agenda, whether we like it or not, is already under way.
§ Mr. Tony Colman (Putney)
I declare an interest as the UK member of the drafting committee at the Inter-Parliamentary Union conference of October 1999 on the global financial and economic model, which was unanimously adopted by the 137 Parliaments. I am also an alternate member of the IPU sustainable development committee. I was a non-governmental organisation delegate to Seattle last week.
I want to correct the impression given by the only other IPU parliamentarian present—the right hon. Member for Suffolk, Coastal (Mr. Gummer). Mayor Paul Schell of Seattle wanted peaceful demonstrations and did all he could to ensure that people could sit down and prevent the conference from going ahead. What the right hon. Gentleman described as incompetent policing was, in a sense, deliberate help and encouragement for demonstrations.
Late in the afternoon a number of anarchists dressed in black with black neckerchiefs around their faces decided to smash up Seattle. I saw it happen. We then had the other side of the picture, with the police having to come in to arrest the anarchists. They had spread themselves 1078 among peaceful demonstrations and subsequently threw firecrackers into the demonstrators to get them to disperse. I managed to get into my hotel and I viewed what took place for the following two hours. I assure the House that the aggression of the anarchists was considerable. I admire the restraint of the Seattle police. There are always two sides to these matters. What was dangerous in Seattle was the hobo spider, which is endemic to the state of Washington, and by which I was bitten twice.
I pay tribute to the people of Seattle for the welcome that they gave us. I pay tribute particularly to the people of the First United Methodist Church of Seattle, the senior pastor, Rev. Kathlyn James and the chaplain, Rev. Fred Hutchinson, who hosted most of the non-governmental organisation work that went on in the city. A radio station and a television station beamed out, and it was extremely important to see the Methodist Church taking such a strong role in that. A member of the congregation told me that he did not necessarily agree with everything that was said, but thought that it was extremely important that there was a pulpit in which to say it.
The attitude of many of the NGOs in Seattle was one that I found sad. As I have mentioned the IPU conference, I shall mention the Commonwealth conference in Durban and Johannesburg. The NGO forum there and the work that came out of the Commonwealth Heads of Government meeting were very significant. I pay tribute to the work that was done by my right hon. Friend the Minister for Trade and my hon. Friend the Under-Secretary of State for International Development. There was very much an agreement within the CHOGM that we should go forward with a development round. I remind the House that 48 of the 54 countries in the Commonwealth are developing nations. There was an extraordinary situation in which it was being said among the NGO community at Seattle that developing countries did not want to go forward with a development round. That was not true. It was important that the United Kingdom convinced the European Union to take a stance similar to ours.
It was clear from what came out of the negotiations that core labour standards and environmental standards should be dealt with in parallel with WTO but not within it. If they were taken within the WTO, there would be a veto from the developing countries.
Extraordinary things went on. I attended the Jubilee 2000 rally along with about 3,000 or 4,000 others. It was very much a rally to write off third-world debt. Then it became a rally in favour of protectionism and protecting jobs in the United States. It was taken over by the American Federation of Labor/Congress of Industrial Organisations. It may be said that that is a natural way to go forward in an environment in which there is about to be a very large march by labour the following day. However, in a sense it was sad that the Jubilee 2000 movement became mixed with a push for protectionism, which was the major element of last week.
The position in the United States was clear. It was known that a veto would come from the developing countries, but things went forward and there was a statement from Clinton in which he said that core labour rights had to be taken within the WTO.
I mention as a slight aside that having run a clothing and textile company in my past, I recognise that it is important as Marks and Spencer prepares to move many jobs out of the UK into developing countries that it listens 1079 to the GMB and William Baird. It is possible to retain a significant element of those jobs in design and in short-term lead times within the UK. Everyone must talk to one another rather than saying that the situation is black and white, because it certainly is not.
Before I leave the subject of developing countries, I endorse, as other Members have, the view that we need a form of investment agreement. The proposals tabled by the European Commission were extremely modest but need to be taken forward, even on the basis of the Singapore agenda. Other hon. Members have spoken about the need not to race to the bottom. It is important to recognise that, by having good investment rules, we can ensure that there is no race to the bottom. I ask the House to endorse that way forward.
The major thing that came out of Seattle, leaving aside many NGOs almost ignoring developing countries' views, was the need for a new process. Several hon. Members have talked about that. Having attended United Nations summits as part of UK delegations, I find it extraordinary how little negotiation and preparation were done for the meeting.
Some hon. Members have mentioned what happened on the Tuesday evening with the tabling of the EU position by the Trade Commissioner, Pascal Lamy, and the fact that he did not consult a single European country in doing so. It was an extraordinary document. I believe that it is available in the public arena. There were good things, however. MEAs—multilateral environmental agents—had precedence. The precautionary principle was taken account of, but the view that was put forward on behalf of the EU—not by the United States—was that the biotech regulatory regime should come within the WTO. All 15 EU countries objected to that.
It is important that, in future WTO negotiations, we revert to what happens in UN summits, where the lead country—the country with the presidency—brings together proposals, and Commissioners simply give advice rather than table positions on behalf of the EU. It was an extraordinary situation. It put negotiations back for a full two days.
My right hon. Friend the Secretary of State for Trade and Industry mentioned his support for a parliamentary assembly. There is an extraordinary alliance between the hon. Member for Tiverton and Honiton (Mrs. Browning) and my right hon. Friend the Member for Chesterfield (Mr. Benn), both of whom think that that is not the way forward. I wholeheartedly support democratising the WTO by having a parliamentary assembly. I hope that the matter can be tabled in time for the next meeting.
As for our own way of working, I ask the Procedure Committee to examine how we can have joined-up Parliament alongside joined-up government. Two papers have been circulated for the debate, one from the Select Committee on the Environment, Transport and Regional Affairs and one from the Select Committee on Environmental Audit. Interestingly, there is not one from the Select Committee on Trade and Industry. We may need a new system of Select Committees that brings together all the interested parties ahead of major summits, so that Parliament is able, through those Committees and debates in the House, to come to a view. I am not trying to reinvent the wheel. There is already the NATO 1080 parliamentary assembly, the Organisation for Security and Co-operation in Europe and the Council of Europe. We should press ahead with that at great speed.
I have no criticism of the UK delegation. I strongly endorse what others have said about the way it involved all the NGOs present. I pay particular tribute to my right hon. Friend the Minister for the Environment, who put himself about all over Seattle. There was hardly an NGO meeting at which he was not present. I exaggerate slightly, but he really made efforts to ensure that views on the environment and the views of the UK Government were made known.
I felt strongly that, because there had been a lack of preparation, those on our delegation were left somewhat twiddling their thumbs until the Thursday evening. It was all waiting until the last minute. That cannot be the way forward. As I said at the beginning of my small offering, the Commonwealth, the European Union and our relationship with the United States through the Security Council mean that the UK is in a unique position.
What are the lessons to be learned? First, next time we should prioritise the developing countries and perhaps explain to the NGOs what those countries have said to us through the Commonwealth, particularly with regard to what they would like us to do. Secondly—it is a heartfelt plea—can we please avoid United States presidential election years?
Thirdly, we must have transparency of process, including, as I said, in Governments and Parliaments. I suggest that we should build on the Charter 99 proposals for a United Nations millennium assembly so that we might develop the concept of parliamentary assemblies, not only in the WTO but in the various United Nations protocols and institutions.
Finally, we should proceed as fast as we are able. In today's Financial Times, Mike Moore, director general of the World Trade Organisation, was quoted as saying thatgaps were narrowed considerably"—at Seattle—in a number of important areas … A package of results is within reach",but:The longer we delay launching the negotiations, the more the poorest among us lose." Amen to that.
§ Mr. Desmond Browne (Kilmarnock and Loudoun)
I am grateful to my right. hon. and hon. Friends for paring their speeches to enable me to speak in this important debate.
In the time available before the replies, I should like to talk about one discrete but very important issue that is part of the in-built World Trade Organisation agenda—the agreement on trade-related aspects of intellectual property rights, and particularly the WTO agreement and trade rules on patents and poor people's access to drugs. Although my hon. Friends the Members for Lewisham, Deptford (Joan Ruddock), for Walthamstow (Mr. Gerrard) and for Eastwood (Mr. Murphy) mentioned and made important points about TRIPS, I am interested in that one aspect of it.
The production and trading of Pharmaceuticals is conducted according to TRIPS, which provides that the holder of product patents—usually the major international 1081 drug companies—are allowed to set the product price in each country in which a patent is held, or to licence others to produce or market the product on an agreed basis.
The House will know—but it bears repeating—that as we approach the end of the 20th century, almost 34 million people world wide face human immune deficiency virus and an uncertain future in the shadow of acquired immune deficiency syndrome. The fact is that 95 per cent, of those people live in the developing world and that percentage is likely to increase.
In some countries, one in four adults are HIV positive. In the five years between 2005 and 2010, life expectancy in the most severely affected countries, in southern Africa, is projected to drop by 14 years, from 59 to 45. Many countries in Asia are experiencing an explosive escalation in the numbers of people becoming infected with HIV. With half of all people who acquire HIV being children and young people under 25, AIDS strikes down some of the most productive members of those societies.
At a recent international conference in Malaysia, a senior World Bank economist warned that AIDS threatens to wipe out the last 20 years of economic gains. Yet the Nobel peace prize-winning organisation Medecins Sans Frontieres says that doctors in Kenya advise AIDS patients to save up for their funeral rather than for drugs which they will not be able to afford.
The current lack of access to HIV-AIDS care and treatment in developing countries is substantially a consequence of those countries' poverty, but it is also a consequence of the cost of medicines—which in turn is a consequence of the intellectual property rights attaching to those medicines.
International trade agreements and policies can and do affect access to goods and services that are crucial to HIV prevention, care and impact mitigation. In May 1999, the World Health Assembly unanimously passed a resolution calling on member states toexplore and review their options under international agreements, including trade agreements, to safeguard access to essential drugs".By manufacturing drugs within the developing world, it is possible to provide them to local people at much more affordable rates than if those people are forced to pay the global price set by western producers who hold the patent. If the drugs are not provided cheaply from local production, they are certain to be out of the price range of local people. Generic drugs made locally are about 70 to 90 per cent. cheaper, according to Medecins Sans Frontieres; in some cases, they can be 200 to 300 per cent. cheaper than branded equivalents available in the west.
The examples are stark. Flucanozole—a drug that manages cryptococcal meningitis, which is an infection that affects one AIDS sufferer in five in Thailand—was supplied exclusively by the US company Pfizer until 1998. Since local alternatives became available, the cost of the daily dosage has fallen by 95 per cent. That represents a saving of £3 million to the Thai Government each year. The 75 cents daily cost in Thailand compares with $30 a day for patients in Kenya, where the number of children orphaned by AIDS has increased by nearly 200 per cent. over the past three years.
The TRIPS agreement allows for local production of patented medicines through compulsory licensing in cases of public health emergencies or unfair pricing. However, pharmaceutical companies in industrialised nations have 1082 recently put considerable pressure on Governments not to allow compulsory licensing. In 1997, South Africa passed a medicines Act designed to enable poor people, particularly HIV sufferers, to gain access to affordable generic drugs. The law permits compulsory licensing and parallel imports, as well as encouraging generic substitution, but the US pharmaceutical industry and the US Government responded immediately, twisting the arm of the South African Government to change the law despite its compliance with the TRIPS agreement. They threatened South Africa with a case before the adjudication panel. Only in response to public protest in the US and the strong resistance of the South African Government did the US Government fortunately back down.
The European Union working paper circulated at the WTO contained the following statement of the law:The TRIPS Agreement, and in particular Article 31, shall be understood to permit developing countries to issue, in accordance with the provisions laid down in this article and other relevant articles, compulsory licenses for drugs appearing on the list of essential drugs of the World Health Organisation.Despite that, there was pressure within the EU delegation from sources that represented the pharmaceutical industry to have that paragraph removed from the document.
This may sound lame but, to conclude my micro-point, I should like my right hon. Friends to do everything they can to support the EU in enforcing the inflexible interpretation of TRIPS to enable access to cheap drugs.
On a more macro level, I want to make a plea for an intellectual property rights regime that reinforces and does not act against the development goals that we set in other international commitments. The United Nations international conference on population and development in Cairo, Egypt in September 1994 agreed the following objective:To increase the accessibility, availability, acceptability and affordability of health care services and facilities to all people in accordance with national commitments to provide access to basic health care for all.It also agreed the following action:Through technology transfer, developing countries should be assisted in building their capacity to produce generic drugs for the domestic market and to ensure the wide availability and accessibility of such drugs.Paragraph 35 of section C of the declaration of the UN world summit for social development in Copenhagen in 1995 says:Governments in partnership with all other development actors in particular organisations of and for people living in poverty should co-operate to meet the basic human needs of all, including people living in poverty and vulnerable groups by:Ensuring universal access to basic social services".Paragraph 37 goes on to say:Access to social services for people living in poverty and vulnerable groups should be improved through:Ensuring that low income communities have access to health service outlets staffed by health workers who can provide primary care, essential drugs and information.The UN convention on the rights of the child sets out requirements and articles for preventable or treatable diseases and goes on to say that children faced with diseases and the spectre of HIV and AIDS ought to have access to the essential drugs. The Organisation for Economic Co-operation and Development's international 1083 development targets were set out in the wonderful White Paper that the Department for International Development published within a month of Labour coming to office.
My argument is that the EU and its member states have signed up to all of these goals, and the current OECD development targets are all derived from them. We are in a position where these targets are aspirational. However, the WTO agreements are legally binding and subject to sanctions for non-co-operation. It is essential that we redraw trade rules so that they do not take precedence over the more fundamental commitments that we as a sovereign nation enter into.
§ Mr. Gary Streeter (South-West Devon)
Human beings have never been good at looking ahead and understanding our future. Almost every prediction of future trends or of how we will live tomorrow has been proved wrong by unforeseen events and unthought-of inventions and discoveries. This remains as true today— despite our science and technology—as it was in yesteryear.
As we peer around the corner to the 21st century, can anyone doubt that we are all in for a period of massive change? There will be change on a global scale, which will rival, and probably outstrip, the turmoil and upheaval of the industrial revolution of the 19th century and the technological advances of the twentieth.
Globalisation is changing everything. New technologies are changing everything. The knowledge and information revolution is changing everything. It is producing change at a pace and on a scale that has never happened in human experience before. The challenge for the politicians of the 21st century will be to understand and manage the implications for all of us—our constituents, national sovereignty and global political structures—of all the changes.
That is the global backdrop against which we come to this important and interesting debate on the world trade talks in Seattle. Most people who have spoken in the debate support free trade. The debate on the benefits of free trade—as on liberal capitalism—is largely behind us. The Secretary of State made a strong speech in Seattle in support of free trade—a speech which, perhaps, she could not have made a year or two ago. I may be wrong on that.
It was interesting to hear some Labour Members giving speeches which appeared not to support free trade, and which harked back to a bygone era. They were wishing the ends without willing the means in their passionate advocacy of protectionism. It was interesting to hear old Labour's revenge in the debate. The speeches were interesting, but did not address the real world in which we live.
No one is saying that free trade of itself will bring about all the changes that we wish to see, both here and in the developing world. We should not forget that the Secretary of State spends most of her time focusing on things such as good governance, civil society, support for entrepreneurs in the developing world, promotion of democracy and many other ways of producing economic growth, stimulating businesses and helping the developing world. The process is not just about free trade, but free trade is a vital backdrop to our discussions about how best to help people who live in abject poverty.
1084 We were looking to the Seattle round to make significant advances in the cause of free trade, so the failure of the Seattle talks represents a major setback. It has emerged in the debate that there is much cross-party support in our approach to the World Trade Organisation and where it should go from here. The failure of the talks demonstrated above all else that while the global economy is becoming truly internationalised, the political structures for introducing rules to govern that global economy still lag some way behind.
The right hon. Member for Chesterfield (Mr. Benn) made a powerful and important point about that issue, which has huge implications for us all, now and in the future. In this new era of globalisation, it is clear that we need to find new decision-making mechanisms for the several multinational global installations that we need to oversee these important global events.
§ Mr. Tony Benn
Free trade is a creature of the 19th century, before democracy. I see the whole debate— on which Front Benchers on both sides are united—as a throwback to the 19th century. The problem is that the system will not meet the needs of people in the next century, when they realise that until they can control their economic as well as their political destiny, they are simply slaves of the new corporations that have replaced the kings and tyrants of the past.
§ Mr. Streeter
I respect the right hon. Gentleman's view, but free trade is not a throwback to the past. It is a clear look into the future. No one claims that free trade will bring all the benefits and advantages that we wish to see—nor does it negate the importance of sound local governance in every nation state. The issue with which we have to grapple concerns the right way to make those global institutions democratically accountable. How can we plug them into the people, who may be thinking globally but still living locally? Is it not right to say that an organisation of 135 members, with more about to join—we heard about China this afternoon—cannot hope to make decisions by consensus and unanimity? Several right hon. and hon. Members referred to the need to reform the decision-making processes of the WTO, and that must be a priority.
I admired the speech by the Secretary of State for Trade and Industry—especially the fact that he acted as though he were announcing a great negotiating triumph from Seattle when in fact it was not a negotiating triumph but a failure. The right hon. Gentleman told us that he intends to give leadership in the matter, and that is to be welcomed. We support this Government taking forward an agenda that has emerged from our debate today. With British membership of the Security Council of the United Nations, the EU, the Commonwealth, G7 and NATO, we are well placed to give a lead in the debate.
We want to hear the Government's proposals to reform the WTO. Will it be done according to the IMF model, itself subject to criticisms of unaccountability? Will it be set up as an equivalent to the Security Council? If so, who will decide who will sit on the inner council? Will the Government propose majority voting for the WTO? I hope that they will set out their plans fully. My hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) requested the Government to set a timetable for those important reforms, to be encapsulated in a consultation document or White Paper on the issue, so that the House may debate it.
1085 What should happen next? We need better diplomacy and the exercise of more influence than was displayed in Seattle. It would be wrong of me to seek to pin the blame for the failure of the talks in Seattle on our Government, and I do not for a second seek to do so. It was clearly the United States Government who brought the talks to an abrupt and unwelcome end. However, the Government called for a comprehensive round in Seattle and told the world that they wanted the talks to provide clear and decisive momentum towards global free trade. The Government have also boasted so often in the past about the influence the British Prime Minister has with President Clinton and they sent no fewer than four Ministers to the talks. So what conclusions are we supposed to draw when the talks collapse and the cause of global free trade is set back so seriously? Can we draw any other conclusion than that our Government's policy and strategy failed in Seattle? [HON. MEMBERS: "Oh!"] Do Labour Members claim that the Government's strategy was a success? The talks collapsed and the Government's strategy did not work. We need not dwell on the issue, but the point needs to be made. The Government should learn the lessons and move on.
If the Government are to take a lead on the issue, as we think they should and as they are well placed to do, it clear that they have to raise their game and start hitting their policy objectives. The fact that the Government have our support in that should be enough to encourage them to do even better.
Several excellent contributions have been made to this debate. I do not have time to mention them all, but I am keen to respond to some of the points made.
My right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) talked about the possibility of establishing a parliament for the WTO. I hope that the Government will set out their thinking on a matter that we should like to examine in more detail. How would members of such a parliament be elected? Would it take representatives from our own Parliament? I look forward to hearing more from the Government on that.
My right hon. Friend also said that the chairman of the WTO should not be the American chief negotiator, and I profoundly agree with that. He called for some of the issues confronting the organisation—such as labour and biodiversity—to be taken forward in parallel, and for the WTO to resist the temptation to try and do everything. I strongly concur with those suggestions as well.
The hon. Member for Hackney, North and Stoke Newington (Ms Abbott) displayed some expertise when she talked about environmental issues, but she also made the very important point that the House would have benefited from a debate on this topic before the Seattle talks. Today's debate has shown that the House has things to say on these matters, and the Government delegation at Seattle would have been better equipped if it had had the wisdom with which a debate in the House of Commons would have furnished it. I hope that the Government will report back more fully to the House on such matters in the future.
The hon. Member for Twickenham (Dr. Cable) made a very good speech, in which he described the dangers of isolationism and the strength of feeling around the world when cheap goods flood domestic markets. He spoke of the risk that the whole trade structure could unravel, and that what he called the primeval forces of nationalism and 1086 isolationism could be released. The hon. Gentleman was right to raise that spectre in the debate. I can tell him that Conservative Members strongly support the movement to global free trade, as we have for many years. I reiterate that our target date for achieving that is 2020.
The hon. Member for Hackney, North and Stoke Newington talked knowledgeably and at some length about bananas. That is an important subject, but she did not take into account the existence of the Lomé convention, which the United Kingdom continues to support. She also omitted to mention that our policy of achieving global free trade by 2020 does not involve the eradication of all subsidies and supports overnight.
The hon. Lady asked what industry Caribbean islands could diversify into. All hon. Members know the very real dangers of the drug trade, which no one could support for one second, but tourism in that part of the world is an attractive alternative for many business people.
§ Mr. Gummer
Has my hon. Friend noticed that the hon. Member for Hackney, North and Stoke Newington (Ms Abbott), who would not give way when she was making her speech, is not present for the winding-up speeches? I was among those who wrote the banana regime and am therefore interested in the subject. The battle is not only between America and the Caribbean, but also between the developing country of Ecuador and the Caribbean. One of the difficulties is to find an answer that will satisfy all sides. Does not my hon. Friend share my hope that we will succeed in finding an answer that will allow people in Caribbean to continue with the only product that they are able to grow?
§ Mr. Streeter
My right hon. Friend speaks with great knowledge, and of course I accept the point that he makes.
My right hon. Friend the Member for Skipton and Ripon (Mr. Curry) made a powerful speech, in which he said that free trade was part of the buttress of the democratic process, and that cutting trade barriers amounted to a tax cut for every citizen. He added that, because business is globalising, the political process must do the same, and he spoke of movement in both the upwards and downwards directions. He used the interesting word "atomisation" and stated that decisions should be made as near as possible to the people involved.
To those hon. Members who oppose what is going on in the world today I say that what is going on cannot be stopped and that we therefore must try and shape it. The hon. Member for Eastwood (Mr. Murphy) challenged us to explain how, after 18 years in government, we could oppose the 15,600 tariffs that my hon. Friend the Member for Tiverton and Honiton described. I have three things to say in response. First, the general agreement on tariffs and trade rounds, under our stewardship, were very successful in reducing tariffs, for this country and for many others. Secondly, many of the tariffs have been in place for generations. Thirdly, the WTO—which has been in existence for only five years—was set up with the support of Conservative Members.
A number of lessons need to be learned from the Seattle fiasco. It is not clear that enough preparation was done in the run-up to the talks to lay the ground rules and do the spade work to resolve the big political stumbling blocks. Does the Secretary of State for International Development think that it would be helpful or unhelpful for the United 1087 States and European Union negotiators to meet outside the WTO process to deal with the vexed issue of agricultural subsidies? Is it possible, and desirable, for the big players to try and resolve the major political issues before the WTO attempts to meet in plenary session again? Does the right hon. Lady agree that for the developing countries to be invited to the talks only to find that on many occasions they were locked out of the room where the big players were talking, and did not have a clue what was going on, added insult to injury. My hon. Friend the Member for Orpington (Mr. Horam) spoke about that with some feeling. Many emerging countries have been humiliated by such treatment, and it will be some time before those scars heal.
I want to record my support for the Department for International Development initiative in seeking to build the capacity of some of the developing countries. Their capacity to negotiate, implement and take advantage of the rules, particularly under the disputes procedure, is fundamental. I welcome the announcement of the Secretary of State for Trade and Industry about greater WTO spend on capacity building, and I strongly support the work that the Department for International Development has done on it in the past.
A situation in which the United States has 250 negotiators and Bangladesh has one is clearly unsustainable. For 30 members of the WTO to be unable to afford to send representatives to Seattle is unhelpful, if the aim is to take everyone to the same place at the same time. I know that this is the first time that many developing nations have been involved, but being involved and being locked out are two different matters. I support the Secretary of State's action in seeking to build the legal capacity of developing nations to enable them to take a full part in the proceedings.
§ Mr. Alan Simpson
I welcome the hon. Gentleman's reference to equity and accountability in the negotiation process, wherever it is. Would he apply that also to the position of the European Union delegation? The elected members who went there as part of Europe's delegation were out-manoeuvred by the Commissioner, who was not elected by anyone. It is like a bizarre game of football in which the team that has won 15–0 is told by the referee that it has lost because he has put a bet on the other side. Does the hon. Gentleman agree that strengthening the lines of accountability should apply to the elected representatives of the United Kingdom Parliament as well?
§ Mr. Streeter
I have a lot of sympathy with the hon. Gentleman's point—I think that he is right. I understand that Mr. Lamy behaved in a way that was not entirely helpful, and we need to look at that.
Does the Secretary of State agree that building the capacity of developing nations and reforming the procedures of the WTO are the two most urgent tasks? If she has any specific proposals, I should be glad to hear them. Does the right hon. Lady share my concerns about the article in the Financial Times to which the hon. Member for Putney (Mr. Colman) referred? Mike Moore, the director general, is calling for a new round of talks "as soon as possible". Does she agree that although it is vital that nothing should stand in the way of further talks, 1088 we should, at the same time, focus on capacity building and reforming the WTO. Does she also agree that the United States presidential election should not hold up the process of capacity building and reform of the WTO?
The benefit of hindsight is admittedly helpful, but will the right hon. Lady reflect on the wisdom of calling for such a comprehensive round? Was not a large part of the failure the fact that there were too many objectives at Seattle? Was it not too ambitious a project? Did we reach too far and fall over? Is there not a case for having more limited, realistic objectives and making steady progress, rather than trying to do everything and achieving nothing? I am talking not about a narrow round, but about a realistic round.
The hon. Member for Middlesbrough (Mr. Bell) and others have discussed whether the ILO might be the right forum in which to deal with labour issues. We all support free trade—at least, on second thoughts, as I look across the Chamber, most of us do. The benefits to everyone of free trade are clear, but the events of the past few days have been a bitter blow to the cause. The Government should pursue a clear agenda, pushing for rapid and radical reform of the WTO. They must do all they can to build capacity in the developing world, to exercise their alleged influence over the Clinton White House and to champion the unilateral dropping of European tariffs for the poorest. They must set a clear timetable for progress, and report back to the House. After the debacle in Seattle, the need is urgent. Britain is well placed to take a lead, and it is time that the Government seized their opportunity.
§ The Secretary of State for International Development (Clare Short)
If anything good came of the mess at Seattle, it was the wake-up call to people in politics to discuss more openly what globalisation is, what it means and how we should manage it. There has been a lag in the political debate. I agree with the hon. Member for South-West Devon (Mr. Streeter) that we face massive historical change that requires change in our political institutions. Much of our sovereignty can no longer be exercised at home alone. We must be willing to pool sovereignty in international agreements so that we may regulate and manage the wealth that comes from globalisation. Globalisation could be used to benefit people, or could prove destructive to the world.
Globalisation is real. It is part of history, just as industrialisation was. Blake wrote poems saying that industrialisation was a bad idea, and we all still sing his hymn. In reality, however, it happened, and it generated wealth. We simply had to manage it. The very origins of the political tradition from which I come and which I represent lay in the wealth generated by industrialisation. The squalor and inequality of our cities meant that we had to organise and to use democracy and the state locally and nationally to ensure that the wealth generated by industrialisation could be shared to uplift all the people. The same challenge faces us today over the wealth being generated by globalisation. The difference is that the challenge is world wide.
Massive new wealth is being generated, but one in five humans live in abject poverty. The challenge before our generation is to ensure that wealth is used to lift up that fifth of humanity by establishing basic, decent standards for all. The wealth gives us an opportunity.
1089 To those of my hon. Friends who doubt that, I must say that I understand their worry about the rapid change that is taking place, but I plead with them to look at reality. The fastest reduction of poverty for the largest number of people in the whole of human history has resulted from rapid economic growth in east Asia over the past 30 years. That happened because inward investment was attracted from multinational capital, which brings with it knowledge and technology. That is how we must harness those things: by attracting investment to create opportunities to export and trade that will grow economies rapidly. That lifts up poor people as well as providing for investment in the education of the people.
There were some deficiencies in how that happened— corruption among them—which led to the east Asian collapse. There are defects in the model, but properly organised trade and investment are major instruments for massively reducing poverty in the world. Our role is to shape them to achieve our objective. For my hon. Friends on the left, I must add that history also shows what happened when the world last went in for protectionism. In trying to protect economies from change, the world threw itself into a terrible recession and depression that created fascism and world war.
The general agreement on tariffs and trade was born out of that experience as we tried to link the world together, opening trade to build a better future. My right hon. Friend the Secretary of State for Trade and Industry tells me that the first of the nine rounds of talks— organised, of course, by a Labour Government—was the Torquay round.
§ Mr. Harry Barnes (North-East Derbyshire)
Should not a distinction be made on where free trade should take place? Countries such as those in Africa obviously need free trade into the western world, and the developments in the European Union of which we have heard are very welcome. But such countries sometimes need to protect themselves against trade coming from western countries that would destroy their economies without allowing them to build up. They need buffer agreements so that they can work together on the sale of cocoa and coffee—the equivalent of the operations of the Organisation of Petroleum Exporting Countries. That way, they could sell their products better within the western world. It is not a matter of being against free trade; the argument is about where it is appropriate, and about protection for the third world.
§ Clare Short
History says that my hon. Friend's thesis, which is reasonable in itself, is not right. Many African countries tried to develop behind protectionist barriers. They had very inefficient, expensive and highly subsidised local industries and they paid lousy prices for local crops to the very poor people in their rural areas. Their economies did not grow, but their population grew and poverty grew invincibly. Those who point to that sort of failure and say that it is a result of free trade are misreading economics and history.
Member countries need to discuss these issues more and to take our publics with us, because many people have become genuinely confused. We need to go back over our history to see what it teaches us.
The failure in Seattle was partly due to the success of the World Trade Organisation, which is only five years old. Ironically, that was the first time that trade talks have 1090 been attacked. The WTO is the most democratic body that ever met to try to reach agreement on trade in the world. The general agreement on tariffs and trade was always dominated by the big, rich countries; the WTO is a rules-based membership organisation.
To those of my hon. Friends who say that the WTO is against the interests of the third world, I say, "Please do not be so arrogant as to tell the third world what is in its interests when country by country has chosen to join." Those countries obviously have decided that it is in their interests. Surely we should respect and honour their opinion and their judgment about their own interests.
We went from a sophisticated, rich-country dominated GATT to the WTO with 135 members and 31 more waiting to join. The procedures did not cope. There was a terrible delay in the appointment of the new director-general, which meant that he did not have time to prepare for the round particularly well. There are major lessons to be learned about the procedures. We must open the organisation up and think about how it can work. It must work by consensus. All the international environmental agreements and so forth must be reached by consensus. We have to get all the countries in the world to agree to move forward, or we cannot do so. We do not have a parliament of the world, which says that we can do all this by majority vote. Therefore it is difficult.
We can have better procedures that help to include people. We can make the process more transparent and debate more thoroughly the preparatory processes in each country, so that Governments arrive at the talks with a more advanced and developed agenda. We need massively more capacity-building for developing countries. However, we have to proceed by consensus— that is the only way.
To those of my hon. Friends who talk as though we are going backwards, I point out that 30 years ago one in four children in the world died before the age of five, but now it is one in 10—even that is disgraceful and we need to make more progress, but it is not true to say that we are going backwards. Thirty years ago, average life expectancy in developing countries was less than 40 and it is now in the 60s.
We need more. We are getting more wealth and we could share it more rapidly. We could have a period of great uplift for the poor of the world. It is not true to say that we have been going backwards; it is a false account of what has been happening.
Because we agree on some of the fundamentals on trade, the hon. Members for Tiverton and Honiton (Mrs. Browning) and for South-West Devon ended up saying that Britain should have fixed it all. We are a pretty good Government and we got a lot of respect in Seattle. We were all there talking to developing countries, talking about the environment and talking to our own nongovernmental organisations—I can assure the House that no one was having fun in Seattle and we did not go there for a freebie—but even we cannot make all 135 countries in the WTO, including the United States of America just before an election, do our bidding just like that. We are honoured by the deep respect that those on the Opposition Front Bench obviously have for us, but even we are not capable of quite as much as they appear to think.
Everyone agrees with my right hon. Friend the Member for Chesterfield (Mr. Benn) that the people of the world want co-operation and security. We have to use 1091 democracy world wide—we have more democracy than humanity has ever had—to manage globalisation and not to turn out backs on it. My right hon. Friend, however, is turning his back on globalisation. If we do that, we shall not be able to manage it—it will manage us. It will rip through the world, creating more inequality and injustice—troubles that will lead to even more war, conflict and environmental degradation.
§ Clare Short
I apologise to my right hon. Friend, but if I give way I shall run out of time and I want to respond to as many contributions as possible.
My hon. Friend the Member for Stoke-on-Trent, North (Ms Walley) spoke about the environment. Too many people want the WTO to make environmental agreements. That is wrong. The organisation does not have the expertise; it is not the place to make such agreements. We need complete mutual recognition. All the countries in the world have reached environmental agreements; they believe in them and want them to be honoured. The adjudication and disputes settlement procedures of the WTO must never be able to call those agreements into question. That was one of our objectives at Seattle—I think that it is achievable.
My hon. Friend referred to the precautionary principle. Many people argue that, because there is agreement on the use of science-based controls and the use of precautionary science, the principle is already incorporated in the WTO rules. However, we want to clarify that matter. Another aspect is voluntary labelling. It is funny that all the anarchists suddenly want the state to control what everyone can consume. If we are worried about genetic modification or hormones in beef, labelling allows consumers to be in charge. Although it is clear that WTO rules allow voluntary labelling, the matter needs further clarification. We wanted to include that on the agenda for the meeting.
The hon. Member for Twickenham (Dr. Cable) made an extremely important point. If the WTO fails, the big economies will settle things on their own, and the developing countries will be squeezed out. Do all those who celebrate a weakening of the WTO really want less democratically accountable rules on the organisation of world trade in all the countries of the world—including the poorest ones? That is a real danger.
My hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) talked about the problem of banana production in the eastern Caribbean. We all share her concern for that region, but its Governments joined the WTO because they decided that it was in their interest to do so. The settlement of the dispute on bananas did not state that special arrangements could not be made. Particular arrangements were called into question, but we hope to reach an agreement that provides protection for the Caribbean growers while giving them time to diversity.
The Caribbean is a very beautiful region whose people could concentrate on eco-tourism—I agree with the hon. Member for South-West Devon—because Caribbean bananas are massively more expensive than those on the world market. That industry is an extremely fragile one 1092 on which to build the area's economy for ever. We need to protect those people and help them to diversify so that their economies can progress.
I agree with the right hon. Member for Skipton and Ripon (Mr. Curry). Labour standards are of crucial importance, but why are the demonstrations not held outside the World Bank? That is the world's development organisation. Why cannot the World Bank work alongside the International Labour Organisation, with a systematic policy in every country to ensure that every child goes to school and that their parents' incomes are high enough to obviate the need for child labour? Why should the matter involve only the WTO? Is it because people want to use trade sanctions only? That would punish countries for their poverty and would trap their children in endless poverty.
I point out to my hon. Friend the Member for Islington, North (Mr. Corbyn) that only 5 per cent. of child labour goes on in trade; the rest is in the agriculture, mining and domestic sectors, which trade sanctions could not touch. If we really care about child labour and respect for core labour standards, we should use all the instruments of the international system. To focus only on the WTO is to concentrate on sanctions—that is the wrong way to deal with the problem.
My hon. Friend the Member for Lewisham, Deptford (Joan Ruddock) is worried about genetically modified organisms and bio-safety. Commissioner Lamy suggested that the WTO should discuss GMOs. The General Affairs Council of the EU and the EU politicians at Seattle met continuously to tell him what he was allowed to do. We discussed how we could achieve flexibility in the negotiations. It is not true that there was no accountability to politicians; we told him firmly that he was not allowed to discuss GMOs, and he withdrew that suggestion.
On GMOs, voluntary labelling is the immediate way forward. We have it in this country. It has not been challenged under the WTO procedures. Unfortunately, I do not have time to answer all the important arguments that have been made, but I wish to expose the myth about the patenting of genes. On patenting, the WTO rules are simply that each country should put in place a patenting system according to some basic rules of its own. There is no mutual recognition of patents, and it is only possible to patent new knowledge. It is a myth that all the indigenous culture and crops of the people of the world have been ripped away from them by the World Trade Organisation. I am sorry that I cannot do justice to the complexity of the issue in the time available.
My hon. Friend the Member for Kilmarnock and Loudoun (Mr. Browne) spoke about drugs and AIDS. The very expensive anti-retroviral drugs that cost about £80 a month, and that slow down death once one has the HIV infection, are relevant only to the elite of Africa. In Africa, there are people dying of AIDS who do not have soap, water or enough to eat. We must do much more, in Africa and elsewhere, to prevent the spread of the infection. Uganda has shown that that is achievable. We need more help with the opportunistic infections that infect people with AIDS, and drugs are needed for that. As my hon. Friend said, under the WTO rules there is room to ensure that those drugs are made available. We must ensure that that is done.
1093 I strongly agree with my hon. Friend the Member for Eastwood (Mr. Murphy) that the opportunity of globalisation is an opportunity to globalise prosperity. That is the task, and this is a real opportunity. We could waste it, but if we focus on that objective and ensure that all the new wealth that is being generated is used in a way that lifts up the one in five of humanity who live in abject poverty, that would be an enormous advance for humanity. It is a possibility, and that is the challenge.
Where do we go from here? In the new year, work will continue in Geneva on the World Trade Organisation's built-in agenda, set during the Uruguay round, and a work programme decided at the Singapore and Geneva ministerial meetings in 1996 and 1998. That includes the start of negotiations on agriculture, and as the right hon. Member for Skipton and Ripon said, that is permitted and bound; but even more significantly, the peace clause on not challenging agricultural subsidies under WTO rules falls in 2003, so there must be major progress, and it will come. It will bring benefits to some developing countries, but only to a small number. Services are also bound. It is also agreed that there will be reviews of agreements on trade in intellectual property, trade-related investment measures and disputes settlement.
My right hon. Friend the Secretary of State will lead a strong effort to reform the procedures of, and to open up and make transparent, the World Trade Organisation. He is very strongly committed to that. We hope and intend that we shall move on from that. Let us hope that, when we get past the election in one of our friendly countries, we can get on with another round.
I repeat to many of my hon. Friends that South Africa very much favours a broad round because it sees the benefits that can come to Africa from advances of the type that we have been advocating. I do not agree with the hon. Member for South-West Devon that we are being too ambitious to be broad. It is necessary to be broad enough to get the trade-offs so that everyone gets something and agreement is reached. Of course, ambitions usually exceed results, but those who are too narrow will get no trade-offs, so there will be no agreement.
South Africa suggested that negotiations might be conducted in two stages. We could go forward on the built-in agenda and implementation of the Uruguay round, which has been very difficult for many developing countries in need of more help. Then we could have a period of capacity-building and return to investment, competition and some of the other issues in a second stage of the next round. That is a very useful suggestion.
I am grateful for the opportunity to discuss these issues. It worries me greatly that some very good young people throughout the world, who think that they care about poverty and injustice, are advocating policies that would damage the interests of the poorest people of the world. We must all stand firm by managing trade in a way that improves people's lives. It is achievable, as I have said, and we can respect labour standards, environmental standards and all the other things that we hold key—but not by destroying the World Trade Organisation. We can do so by making it work in a more sophisticated way and strengthening the implementation of our other international agreements.
1094 I shall return to the some of the points that I failed to answer. I was asked whether we should use the International Monetary Fund model. The answer is no. That is a dollar a vote; we need a country a vote. The same applies to the role of the Security Council. We must have consensus in all countries with a need for growth— It being Seven o'clock, the motion for the Adjournment of the House lapsed without Question put.