HC Deb 20 June 2002 vol 387 cc395-8
3. Judy Mallaber (Amber Valley)

If he will make a statement on his recent action to encourage international trade with a view to reducing poverty in the world's poorest countries. [60338]

5. Mr. Andrew Love (Edmonton)

If he will make a statement on his recent action to encourage international trade with a view to reduction of poverty in the poorest countries. [60340]

The Chancellor of the Exchequer (Mr. Gordon Brown)

Our policy for a successful resolution of the World Trade Organisation development trade round includes negotiated reductions in agricultural export subsidies, with a view to phasing them out, and the granting of duty-free and quota-free access to the least developed countries for all exports except arms, and it will require finance to build the capacity of developing countries so that they can participate fully and effectively in the forthcoming negotiations. In order to discuss those issues after yesterday's justice for trade lobby at Westminster, the Secretaries of State for International Development and for Trade and Industry and I will meet representatives from Churches and NGOs on 25 July.

Judy Mallaber

I thank my right hon. Friend for that answer. In particular, I welcome the proposals to help those countries to increase their capacity and to engage in the multilateral talks. What is his estimate of the progress that has been made in convincing, the international community of the need to make the international trading rules fairer to poorer countries, in the light of the comments made by yesterday's magnificent lobby?

On a different but connected note, will my right hon. Friend also discuss with his colleagues in the Department of Trade and Industry what further help is needed by our textiles and clothing industry, which has suffered massive job losses in the past 20 years as a result of changes in international trading patterns, so that it can reposition itself in the market by developing new high value-added products and areas of work?

Mr. Brown

My hon. Friend will know of the textile and clothing industry forum—a partnership that is considering supply chain relationships in the industry to improve its efficiency and competitiveness. The project is worth £3.8 million and is led by the British Clothing Industry Association. On the problems faced in relation to textiles as a result of the openness of international markets, we as a Government will do what we can to work with British textile producers to see what can be done. She is absolutely right that we also need evidence that there will be progress in meeting the ambitious aims set down at Doha. Thirty years ago. the 49 poorest countries in the world had 3 per cent. of world trade. They now have 0.5 per cent., so there is an enormous challenge to be met. One of the things that we will do is help financially developing countries to play their full part by having the capacity effectively to negotiate in the trade round.

Mr. Love

International trade is growing and I believe that the European Union has a role to play in ensuring that the poorest countries benefit from that. International trade should be happening for poor countries and not to them. In that regard, what action is my right hon. Friend taking to speed up the removal of all the tariff barriers that impede the trade of poor countries?

Mr. Brown

My hon. Friend is absolutely right. That issue confronts an existing policy of the European Union—the common agricultural policy. As was said earlier, the talks held this weekend in Seville will be followed by publication by the European Union of a paper on the common agricultural policy. I believe that we can make progress on cereals, direct payments and the modulation changes that have been recommended before. It is very important that we recognise that an agricultural budget that takes up 50 per cent. of European Union resources, keeps prices artificially high in our countries, and makes it difficult for the poorest countries to enter the markets is unfair to everybody and must be reformed. These proposals—and in their more radical form—will be supported by this country in the negotiations.

Mr. George Osborne (Tatton)

Further to that answer. can the Chancellor offer us a personal prediction of when the trade barriers imposed by the EU will finally disappear? As he said in giving his figures on world trade. they have held the developing world in poverty for many years. Does he have any idea when those barriers will disappear?

Mr. Brown

We have many targets, but for me to set a target for what 15 member states of the European Union can agree in a very short time is very difficult indeed. The hon. Gentleman must reflect on the fact that, in 18 years of Conservative government, the amount spent on agricultural subsidies increased dramatically, rather than being reduced. It is in all our interests that we push the matter forward. There must be progress before enlargement and because the Doha talks resume next March. He should be encouraged by the fact that not only the Canadians, who were chairing the G7 meeting, but the French and others who were present, signed up again to the liberalisation of these markets. That is very important indeed.

Dr. Jenny Tonge (Richmond Park)

Is the Chancellor confident that he can convince his fellow Ministers at the forthcoming G8 meeting that the World Trade Organisation should sign up to the international development targets that are already agreed to by the United Nations and other multilateral agencies?

Mr. Brown

Every international organisation of substance—the IMF, the OECD, the UN and the World Bank—have already signed up to the development goals. That is implicit in the work that is being done to prepare for the next stage of the world trade round.

I think that the hon. Lady knows that unlike many other international organisations, the WTO is in a sense a one member, one vote organisation. The role of developing countries in setting the terms of negotiation and the final outcome can be extremely important. I do not think, therefore, that it will be difficult to persuade members of the WTO that the world development goals are important and should be signed up to. I think that the hon. Lady knows also of the challenges to persuade these countries to take the action that is necessary and—I put this to all right hon. and hon. Members—and to provide the necessary resources.

Mr. John McFall (Dumbarton)

My right hon. Friend may be aware that Horst Köhler, the managing director of the IMF, has kindly agreed to appear before the Treasury Committee in the next two weeks. In advance of that appearance, will my right hon. Friend support the proposals of Mr. Köhler's deputy, Ann Kruger, for a bankruptcy court for defaulting countries, so that they do not slide further into poverty and ruin their international trade? Is that not the proper approach for crisis prevention rather than merely crisis resolution?

Mr. Brown

I hope that Mr. Köhler will enjoy his appearances before the Treasury Committee as much as I do. I look forward to hearing what he has to say. It may interest the House to know that there was agreement at the G7 meeting in Halifax, Canada last weekend—for the first time in all the meetings I have attended—on the measures that must be taken for crisis prevention and crisis resolution. That will include international bankruptcy proceedings.

These things are far more relevant to emerging market economies than they are to developing countries. However, a far greater role is included for surveillance, so that we are aware of what the problems are in individual countries before crises hit us. There is a far greater role for publicising what is really happening so that we do not get Argentina-type crises hitting us without prior warning, and for prior work to avoid them. There will be a far better resolution of crises once this happens. By improving crises prevention mechanisms, we will help not only emerging market countries such as Argentina, but the poorest countries in Africa.