§ 2. Hugh Bayley (City of York) (Lab)
What recent discussions she has had with other countries' Trade Ministers about the Doha trade round. 
§ The Secretary of State for Trade and Industry (Ms Patricia Hewitt):
Since the ministerial meeting in Cancun last September, I have met or spoken to a wide variety of Trade Ministers about how we can more forward on the Doha round, including Commissioner Lamy, colleagues in other European Union member states, Minister Amorim from Brazil, Minister Erwin from South Africa, Minister Jaitley from India and Minister Zhang from China.
§ Hugh Bayley
Does my right hon. Friend agree that one way to restart the stalled World Trade Organisation negotiations on trade and agriculture would be to revive the proposal to eliminate export subsidies? Our Government have made that proposal on many occasions, and even President Chirac of France floated it when he held his Africa summit one year ago. Might that not provide a way to put energy back into the talks and get people moving towards agreement once again?
§ Ms Hewitt
My hon. Friend is absolutely right. The point is enormously important because part of the European Commission's negotiating mandate, which we helped to construct, is an offer to end export subsidies on all products of interest to developing 1042 countries, which have not started negotiations. I have recently written to Trade Ministers in a number of developing countries, and reinforced the point in discussion, to say that the offer is not a negotiating trick from the European Commission. If those developing countries produce a list of products on which they want an end to export subsidies, it will be negotiated. I am delighted that Agriculture Commissioner Fischler said in public on Monday that it is up to developing countries to say which products they are interested in, and that if they say "all products", we must discuss that too. That is how to abolish those appalling export subsidies, which are so damaging to developing countries.
§ Tony Baldry (Banbury) (Con)
In their response to the Select Committee report on Cancun, the Government said:We agree the EU needs to work harder to explain to many countries the longer term impact of the CAP reforms agreed last year".Is it the Secretary of State;s view that the European Union has done enough on agriculture and common agricultural policy reform, and that it is simply a matter for others—notably, the United States—to reform; or do the Government take the view that there is more work to be done in the EU on CAP reform if we are to have a successful development round?
§ Ms Hewitt
Much has been done since December, when the European Union agreed its position post-Cancun. I welcome the fact that Commissioner Lamy has gone to so many countries and talked to so many Trade Ministers around the world to set out in detail the implications of the CAP reform package that we agreed last year, and the offer on export subsidies to which I have just referred. There is, however, more to do. I know that the hon. Gentleman takes a close interest in those issues, and he will know that we are already engaged in discussions within the Agriculture Council on further reforms on cotton and, in particular, sugar, which are crucial to developing countries and which must form part not only of Europe's reform programme, but of a successful conclusion to the Doha round.
§ Mr. Martin O'Neill (Ochil) (Lab)
Is my right hon. Friend aware that the stalling of the Doha agenda has led not only to problems for developing countries, but to a number of countries entering into free trade agreements, almost as an expression of frustration? Last week, when I was in south-east Asia with my colleagues on the Select Committee on Trade and Industry, we visited Malaysia, Thailand and Singapore, which have entered into such agreements. There is a worry that the EU's trade agenda is being lost in respect of such countries. Moreover, there is a danger that the bigger Europe created by the accession process will have a "fortress Europe" tendency that ignores certain countries that are not developing countries, but mature economies from which we could benefit a great deal through improved trade relations.
§ Ms Hewitt
My hon. Friend makes a series of extremely important points. I pay tribute to his work on this issue as Chairman of the Select Committee. I told the House in the wake of Cancun that there was a real 1043 danger of bilateral agreements taking the place of making the right efforts on the Doha round. That has happened to some extent, although not as much as many of us feared. In reality, it is only through the World Trade Organisation that we can deal with some of the most difficult issues, including agriculture, which was exempted from the recent free trade agreement between the United States and Australia because they simply could not reach agreement on it.
I welcome the fact that Commissioner Lamy is focusing his efforts on reviving the Doha round. That will be difficult, but I share the view expressed by Commissioner Lamy, Ambassador Zoellick and several Ministers in developing countries—that we can move the talks forward and agree by July the framework that we should ideally have reached at Cancun last September.
§ Malcolm Bruce (Gordon) (LD)
I congratulate the Secretary of State on her recent robust Mansion House speech in which she warned of the dangers of US protectionism. In the spirit of her remarks about the Doha round, will she do more to end the intransigence over cotton that is having such severe consequences in west Africa? Will she press for greater flexibility on, or indeed the abandonment of, the Singapore conditions, which are causing great concern among G77 countries? On agriculture, will she insist that, in ensuring that the United States and Europe have viable farming economies, we do not do so at the expense of destroying the livelihoods of subsistence farmers in developing countries through unfair and devastating export subsidies?
§ Ms Hewitt
I agree with the hon. Gentleman and thank him for his opening comments. On cotton, we are in the process of negotiating with our European partners a significant decoupling of income support to farmers from production subsidies. That will make a great difference. However, I share the hon. Gentleman's view that the real challenge is to the United States, which has enormous cotton subsidies. More generally, if the European Union is to deliver its share of the phasing out of export subsidies, the United States, too, must deal with the food aid and export credits that fulfil the same damaging purpose.
I made it plain last year that the Singapore conditions were not UK priorities, but I welcome the fact that the European Commission wants to decouple the four issues. There is general agreement that we should proceed with discussions on trade facilitation, and some, but a little less, agreement on transparency in Government procurement, investment and competition. My view is that those matters should be put to one side for the moment while we get on with the really important issues in this round.
§ Ms Julia Drown (South Swindon) (Lab)
I have received letters from constituents who are worried that one result of the trade talks will be that developing countries have to privatise water services. The Government deny that, but non-governmental organisations keep campaigning on it. Can my right hon. Friend tell the House whether informal pressure on developing countries is making them privatise water to 1044 the detriment of poor people? Will she support any developing country that is under pressure to do that but does not want to?
§ Ms Hewitt
I have repeatedly tried to make it clear in this House, and in correspondence with my hon. Friend and other hon. Members, that there is nothing whatever in the general agreement on trade in services—GATS—that would require any country to privatise its water industry or anything else. The same non-governmental organisations that make that accusation also say that GATS would require the privatisation of the national health service, which is also nonsense. When we speak to Ministers in developing countries, we hear that they welcome the opportunity that GATS gives, because it gives them the power to decide which sectors to open up and which not to open up.
The reality is that in some developing countries, it is the judgment of their Government that the only way to get the massive investment that they need to provide clean, affordable water and decent sanitation is to bring in private capital. That is a judgment for those countries to make, not for us and, frankly, not for the NGOs. Our advice to developing countries, however, is that if they seek to open up water industries in that way, they need a strong framework of regulation to make sure that they protect affordable water for their poorest communities. We stand ready to assist with that process, particularly through the Department for International Development.
§ Mr. James Arbuthnot (North-East Hampshire) (Con)
Does the Secretary of State agree that there is nothing more important for lifting poorer countries out of poverty than a successful conclusion of the Doha round? Does she agree that it is not just the elimination of export subsidies in the developed world that is important for that, but the elimination of domestic subsidies, and that while free trade is important for rich countries, it is often a matter of life and death for poorer countries? What prospect does she see of completing the development round, a very important round indeed, by the target date of 1 January next year?
§ Ms Hewitt
I welcome the right hon. Gentleman's support for all our efforts to get the round and the negotiations back on track. The potential gains for developing countries are enormous. An ambitious round could boost the incomes of developing countries alone by some £150 billion, dwarfing the amount that they receive in aid and bringing hundreds of millions of people out of abject poverty. The prize is enormous.
This of course requires progress not only on agriculture but on market opening and the tariff escalation that prevents developing countries from moving into much higher value-added production. It also requires the larger developing countries to open their markets to the smaller developing countries—in the way, to be fair, the European Union has done for the least developed countries with the "Everything but Arms" agreement. The timetable has clearly slipped, and the crucial issue now is to agree, I hope by July—before the United States moves into its election campaign—a framework for the round so that we can make the necessary progress to move forward to completion next year. Our Government, holding both 1045 the presidency of the G8 and the presidency of the European Union next year, will make that a very high priority.