Trade and Development (WTO)

HC Deb 30 October 2003 vol 412 cc145-92WH

[Relevant documents: Seventh Report from the International Development Committee, Session 2002–03, HC 400-I, and the Government's response thereto, Fifth Special Report, Session 2002–03, HC 1093.]

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Gareth Thomas.]

2.30 pm

Tony Baldry (Banbury)

The International Development Committee welcomes the opportunity to debate its report on Cancun. It is a pity that the House has not had an earlier opportunity to debate the fifth World Trade Organisation talks. The Select Committee published its report on 14 July; the Government published their response to it a couple of days before Cancun and complimented the Committee on how the report successfully gives a balanced picture of the major challenges facing many developing countries and the international community in their efforts to make trade rules work for development.

In light of the evidence given to the Committee a couple of weeks ago by the Secretaries of State for International Development and for Trade and Industry, it would appear a good time to take stock of what happened in Cancun, and what needs to happen to reach an agreement that benefits the poorest of the poor. I am sure that many of my colleagues on the Committee will have their own interpretation of our report on Cancun, including those of us who were fortunate to be there, such as myself and the hon. Members for Putney (Mr. Colman) and for Glasgow, Maryhill (Ann McKechin). To take stock of the WTO talks, the Committee had an evidence session with the two Secretaries of State two weeks ago, and it will publish a further report before Christmas on the WTO post-Cancun.

Stepping off the plane returning from Cancun, I felt that it was clear that a blame game had started in the UK press about what and who had led to the collapse of the WTO trade talks. The United States and the European Union were cited by most broadsheets and commentators as responsible. It was noticeable that in the evidence to the Committee, neither Secretary of State wished to level blame at any negotiator's door. On the US, the Secretary of State for Trade and Industry observed that the United States certainly does not wish to be responsible for the failure of the Doha round, and Ambassador Zoellick himself played an extremely important part in helping to launch that round in the first place …on Tuesday, Perez del Castillo chaired an informal meeting of the heads of delegation at the WTO in Geneva. It is the first full WTO meeting that has happened since Cancun. He set out his proposals for moving things forward, and I am glad to say that the United States, although cautious, did say that it was willing to engage, including on the discussions on agriculture". Finally, on the WTO negotiations, the Secretary of State said: We have certainly not done an assessment of our failure to reach agreement at Cancun precisely because it is not the end of the story.

That, I think, is a fair reflection of what the two Cabinet Ministers wanted to put across to the Committee: in short, that no one negotiating group was to blame and that it was futile to look for blame; that a large part of the problem at Cancun was a shortage of negotiating time; and that we should now be looking forward. I certainly agree with them that we should now look forward. However, that will require us to learn the lessons of Cancun and understand why the negotiations failed.

An internal post mortem paper, seemingly prepared by the DTI, concluded: At the heart of the collapse was a clash between the approach of the EU and US and others, expecting a traditional brinkmanship-style negotiation, and the approach of many developing countries who were not willing to play this game, and were prepared to hold out if they weren't satisfied.

According to a report cited in The Guardian newspaper last week, the UK Government's assessment of the talks is: We need to recognise privately that we may not get agreement on a basic framework by mid-December, and that much of our work may in practice be providing the groundwork for later rejuvenation of the round. We need to develop a longer term game plan for getting the Doha round back on track if it stalls in December and undertake in parallel some fundamental and strategic forward thinking about trade policy in a world where Doha has stalled. It may simply not be possible to get the process back on track, and we may be dealing with fundamental changes in the dynamics of the WTO. This means that we should be careful to keep expectations modest so as to avoid setting ourselves up for a second failure at Geneva in December. The question, therefore, is what exactly "modest expectations at Geneva" means. Surely it would not mean the resurrection of any of the Singapore issues.

It is good news that the EU eventually did at Cancun what the Select Committee recommended and removed investment and competition from the Doha agenda. Paragraph 98 of the report states: The UK Government is committed to improving the capacity of developing countries to negotiate effectively in the Doha Round. In responding to suggestions that this valuable commitment might be undermined by including the Singapore Issues on the agenda, DFID states that the 'significant benefits' which the Issues offer for developing countries 'should be set against the costs of negotiating and implementing the proposed agreements.' In the absence of reliable estimates of either the costs or the benefits, and in the face of opposition from many developing countries who argue that pushing the Singapore Issues will not lead to a genuine development round, we urge the Government not only to stop promoting the inclusion of the package of Singapore Issues on the WTO's negotiating agenda, but to persuade its EU partners and the Commission to do so too. Our report further recommended in paragraph 101: Pushing for the inclusion of the Singapore Issues on the post-Cancun agenda is excessively hard bargaining. We trust that the Government's move to disassociate itself from supporting the Singapore Issues signals that the views of developing countries have been heard and acted upon. If there is no support for the Singapore Issues, they surely must be dropped.

Presumably—we hope—none of the Singapore issues should now be discussed further at Geneva, but frustratingly that does not appear to be the case. On Tuesday, the Committee took evidence from Trade Commissioner Pascal Lamy. We should bear it in mind that the EU negotiates as one on this issue, so he leads the negotiations for the EU. He said that on the Singapore issues he made this compromise when I thought it would move negotiations forward. I have withdrawn that offer. That is bad news. Unless the UK Government can persuade their EU partners otherwise, the wasteful Singapore issues will still be discussed at Geneva, which is probably rather crazy. The Singapore issues took up half the green room discussion time at Cancun. As a consequence, there was insufficient time to discuss agriculture, but without progress on agriculture there cannot be a trade round.

Our Committee concluded at paragraph 59 of the report: At long last some progress has been made on CAP reform. But the UK must continue to exert pressure on its European partners—particularly France—to live up to the letter and the spirit of their WTO commitments, to reduce all agricultural support rather than only that which is defined as production and trade-distorting. Fifteen or twenty-five members of the European Union must not allow the fate of their Common agricultural policy to be determined by President Chirac, and sealed in horse-trading between France and Germany. In addition, the UK must insist, when the EU finally does reduce the amount of trade-distorting support it provides to agriculture, that the reductions include products of export interest to developing countries. The UK and the EU should, within the EU and the WTO respectively, be pressing for discussions on capping the Green Box, as proposed by a number of developing countries.

Surely that still stands, yet the noises coming from the Commission are not promising. Franz Fischler was reported in an interview with the Financial Times earlier this month as saying that WTO members should not "punish themselves" by mounting legal challenges to farm subsidies when the peace clause that shelters the EU and US expires at the end of the year. Commissioner Fischler added: So you have to decide what you prefer: a successful round, or that you press us to give up export subsidies.

It was clear from what the Commissioner said that the EU is unwilling to take the lead by tabling an improved negotiating offer, even if there is still a willingness to talk. The EU must make some movement on the issue, to give us the confidence that it is fulfilling the commitment not, in the words of the Secretary of State for Trade and Industry, to accept any proposal we believe will damage the prospects of developing countries trading themselves out of poverty. If there is no movement by the EU at the next set of negotiations, we will still be left in the wholly unacceptable situation in which EU and US farmers receive more money in subsidies in 12 days than the whole of Africa receives in development aid in an entire year.

In paragraph 77 of the report we stated: Any agreement on agriculture must, at a minimum, pass two developmental tests; will it stop dumping, and will it allow developing countries to protect themselves from any continuation of dumping? On both counts, despite making some progress, the Harbinson draft fails, as will the CAP reform agreed recently. A development-friendly outcome on agriculture must pass these tests, must not make the poor pay for the poorest, and must:

1. a) Reduce tariffs and tackle tariff peaks and escalation.
2. b) Extend duty-free and quota-free access to all LDC exports into all developed countries.
3. c) Ensure that tariff barriers are not replaced by other protectionist barriers.
4. d) Include binding timetables to reduce and in time eliminate domestic support and export subsidies of all types."

It is difficult to see how anything less will not, as in the words of Ministers, damage the prospects of developing countries trading themselves out of poverty. Although the Secretary of State for Trade and Industry suggested to the Select Committee that the CAP deal would be very good news for developing countries", that does not reflect reality. If it did, why not communicate the benefits of the deal more effectively to developing countries?

The Government published their response to our report just as the Cancun talks were starting. In it they said: We welcome the recent agreement on TRIPS and public health which shows that the WTO can adapt to the needs of developing countries. It has also removed one of the major obstacles to progress and will hopefully provide some of the political impetus needed to drive the negotiations forwards. The Committee's report is also especially timely given the forthcoming 5th WTO Ministerial Conference in Cancun, Mexico, from the 10-14 September. The government is working hard to ensure that Cancun produces a result that we can call a success. This should include substantial progress on agriculture, and extended special treatment for different countries. Our view is that the Cancun meeting will inject fresh impetus into WTO negotiations and help to push negotiations forward towards our long-term aspiration of improving global trade rules. Only through a long-term commitment to reform and sustained dialogue with our international partners, can we realise our ambition of making trade work for all countries, and especially the poorest. The Government made that response the week before Cancun. At Cancun, UK officials had a core script of approaches to take. In the opening bullet points, they state: The UK is determined to work hard to influence a Cancun outcome which really delivers on the Doha mandate to: Agree a framework for ambitious reductions in agricultural subsidies and import tariffs—necessary to create sustainable economic benefits for all, including developing countries. Help developing countries secure better access for their exports through an ambitious framework for reductions in trade barriers on industrial goods. Work towards providing an adequate framework for flexibility in WTO agreements to ensure that developing countries can implement them at a pace appropriate to the levels of development, so called rules on special and differential treatment. The government is determined to ensure that the decisions taken at Cancun and throughout the Doha negotiations will assist developing countries. In particular it is vital that decisions taken in Cancun do not limit the potential for developing countries to trade themselves out of poverty. That is all excellent stuff, so why did it not happen?

I was in Cancun, as were many other hon. Members present today. I was there as the Chairman of the International Development Committee, but I also represented the House at a specially convened meeting of the Inter-Parliamentary Union, along with the hon. Member for Glasgow, Maryhill—a conference that drew together parliamentarians from around the world. My witness account of what happened at Cancun will be subjective and, of necessity, incomplete. It is not possible to be everywhere at once, and one will not witness every event.

The first thing that struck me, very forcibly, at Cancun and in the run-up to it, was that there was no leadership. If Britain, the EU and the rest of the developed world really intended to deliver on the Doha declaration, it was always going to be a massive agenda, as the Government's objectives made clear. It would require substantial shifts in attitudes and a willingness to make concessions and listen to other people's points of view. I was fortunate enough to represent an earlier UK Government at meetings of the Council of Ministers and other international conferences, and my experience is that for progress to be made, political leadership commensurate with the task is needed.

Apart from making a handful of telephone calls a week before Cancun to some key players such as Brazil and India, President Bush took no part in the negotiations. An ambassador, Robert Zoellick, led the US delegations, and the EU's negotiating team was led by Commissioner Pascal Lamy. It was said that during the summer Zoellick and Lamy spent a long time in negotiation and discussion with each other but almost no time talking to their counterparts from developing countries, and there was far too much to do in the few days available at Cancun for complex negotiations to take place. As the Secretary of State for Trade and Industry commendably and candidly said to the Select Committee a couple of weeks ago, there were only 48 hours of detailed negotiations, and when 146 countries are involved, that is not enough.

The various groups of players had difficulties, and the way in which they responded to them did not always help. To give focus to trade negotiations and their importance for those living in poverty, nongovernmental organisations frequently select a commodity to highlight the difficulties of the developing world in competing, for example, with agricultural subsidies from Europe and the United States. In the past, they have highlighted coffee; hundreds of thousands of producers in Africa and in central and southern America are dependent upon that commodity, and coffee prices have fallen through the floor in recent years.

The coffee story is complicated. The main reason that coffee prices have dropped is not because of generous subsidies by the US or the EU to their own farmers but because far more coffee is being produced than is being drunk. Recently, Brazil, a less developed country, has substantially increased its production of industrial coffee, and on the other side of the world, Vietnam, which has not hitherto been a coffee producer, has come into the coffee market in a substantial way. That is why, more than anything else, coffee farmers in the highlands of Ethiopia and across Malawi are finding life extremely difficult.

This time at Cancun, non-governmental organisations chose cotton, not coffee, to highlight their concerns. On cotton, the story is much more stark and clear cut. West and central African countries with 10 million cotton farmers are estimated to be losing as much as $1 billion a year in foreign earnings because exports of subsidised cotton by the US have squeezed their sales and lowered world prices. Cotton prices fell by half over the five years between 1997 and 2002.

Four of the poorest countries on earth, Benin, Burkina Faso, Chad and Mali, got their act together at Cancun to tell their side of the story. They asked WTO Ministers to agree a timetable for eliminating subsidies and to pay them compensation while the subsidies were phased out. The US is spending some $6 billion on cotton subsidies, and as The Economist concluded: Benin, Burkino Faso, Chad and Mali managed to get cotton included as an explicit item on the Cancun agenda. Their grievances were simple and justified. West African cotton farmers are being crushed by rich countries' subsidies, particularly the $3 billion plus a year that America lavishes on its 25,000 cotton farmers, helping to make it the world's biggest exporter, depressing prices and wrecking the global market. The West African four wanted a speedy end to these subsidies and compensation for the damage that they had caused. Though small fry compared with the overall size of farm subsidies, the cotton issue, (like an earlier struggle over poor country access to cheap drugs), came to be seen as a test of whether the Doha round was indeed focused on the poor.

No one was happy with how the issue was dealt with. The US found itself in the spotlight on cotton. The EU, which produces only 3 per cent. of the world's cotton, was happy to step away from protectionism in this matter, so the US was on its own. The difficulty in having a delegation that is led by an ambassador, contains no politicians and is simply a team of trade negotiating officials, however competent, is that they are not used to being lightning conductors for dealing with a media feeding frenzy.

In response to the clamour on cotton, members of the American negotiating delegation at Cancun simply retreated to their hotel and holed up. We did not see them. It simply is not possible to conduct meaningful trade negotiations or any other negotiations from the comfort of one's hotel bedroom. One has to be out there listening to people and talking to other delegations. The draft text that emerged halfway through the Cancun meeting was a huge disappointment. The promises on cotton were vague, pledging a WTO review of the textiles sector, but with no mention of eliminating subsidies or of compensation. Worse, it suggested that west African countries should be encouraged to diversify out of cotton altogether, which is pretty insulting.

The failure to reach a result at Cancun is a serious setback. West African countries showed some flexibility at Cancun in terms of the end date for trade-distorting cotton subsidies, but their producers cannot wait until the end of the round for action, especially if it is delayed beyond 2005 and implemented over five to 10 years. By then, one of the very few competitive sectors in these desperately poor countries would be dead, which is why cotton was put on a separate track in the first place.

The text presented on 13 September, which was rejected by the vast majority of WTO members, should be discarded as a basis for discussion. To move towards a solution as soon as possible, the negotiation group on cotton issues, created at Cancun, needs to be reconvened as soon as possible to look at alternative options. Of course, the phase-out of all trade-distorting cotton subsidies would require substantial efforts on the part of the US, the main subsidiser of cotton, and the EU. Potential difficulties for cotton producers in wealthy countries, especially small producers, must be taken in account, but those concerns should not be used as an excuse for inaction.

Although clearly insufficient, the proposed reform of the EU cotton sector is a useful first step. The US should also rise to the challenge and come up with constructive proposals for its own cotton subsidies. Any meaningful initiative would be helpful to resolve the current deadlock on cotton. It is pretty insulting to be told by the US and others, "We're terribly sorry, not only are we not going to reduce our subsidies to our farmers, but the only help that we'll give you is to try to help you to stop producing cotton altogether."

The EU had problems of process and of credibility. In addition to the EU and the existing 15 member countries, a number of accession states, such as Hungary and Poland, which will shortly be joining the EU, were also there in Cancun. A number had special interests, such as the future of the sugar regime with reference to sugar beet. There was also a large contingent of Members of the European Parliament. MEPs clearly felt that, as this was an area of specific EU competence, they should be there to hold the Commission to account. However, I suspect that the effect of all this is that Commissioner Lamy and his team simply did not have sufficient thinking or negotiating time to spend with other players from the developed world and the multitude of participants from other countries.

Commissioner Lamy and his officials spent much of their time scurrying around telling MEPs and Ministers from EU member states what was happening. There was also a serious credibility problem almost from the first day in that a leading international development NGO, ActionAid, produced a Commission document, which was never denied nor disowned and which clearly stated that effectively it was for the Commission publicly to say that it wanted to help the interests of developing countries, but privately to pursue what it perceived as EU mercantilist interests. Any confidence that developing countries might have had in America was lost because of the US stand on cotton. Similarly, the EU lost much credibility as a consequence of that leaked document.

For the developing countries, the shortage of time at Cancun also presented a real difficulty. Cancun witnessed for the first time the emergence of a co- ordinated standpoint by a number of developing countries, variously called G20, G20-plus, the Group of 21 and G23. Regardless of its name, this group could not and cannot be ignored, and I believe that it surprised itself with its impact on the talks.

The improved co-ordination and coherence among developing countries achieved through G20 is a positive development and must be built on. The new political landscape should be regarded not as a threat, but as an opportunity to move forward in a more focused and effective way, overcoming the difficulties involved with negotiations among 146 members. The difficulty for those countries is that it is hard to agree an endgame. Even when the EU and US began to shift reasonably significantly, by taking a number of the Singapore issues off the table, G20 and other developing country groups were unable to respond. They had got used to saying no, but they were not sure what they wanted to say yes to.

Those countries should not be blamed for that, because it is not easy to co-ordinate a line to be taken by 21 or more countries from almost every continent. It is hard enough for the EU, 15 of the most developed countries, with all the assistance and bureaucratic machinery of the European Commission, to get its act together. It is much more difficult for 21 or more countries without those organisational structures. Notwithstanding the success of the agreement on trade-related aspects of intellectual property rights, or TRIPS, a few weeks before, there was too much to be done in the available time, given that there was not enough leadership early enough, there was a huge agenda, and almost every deadline up to Cancun had been missed.

Following the Doha declaration, developing countries were rightly and justifiably looking for evidence that the developed world was taking notice of them, and there was precious little of it. On the key issue of agriculture, there was no evidence that the US was backtracking from its recent Farm Bill, or that the EU was prepared to offer any more than the modest recent so-called CAP reforms, which will keep EU subsidies on agriculture unchanged for many years.

It is a sobering fact that millions of people live on less than $1 a day—that is what $1 will buy in New York, not in their own country. In contrast, every cow in the EU receives a subsidy of about $2 a day. The average gross national income of Ethiopia is $100 a year, whereas a cow in the EU receives a subsidy of more than six times that—more than $600 a year. The rhetoric of the UK Government, the EU and the WTO negotiators made the right noises about the Doha declaration and the need to assist developing countries. However, when they came to be judged on their deeds and the positions that they took on agenda items, the reality did not match that rhetoric.

At the end of the conference, when it was clear that the talks were collapsing, a number of delegations and NGOs applauded, which was a mistake. It was a mistake to consider the collapse of the Cancun talks as advantageous to developing countries. In our report, the Select Committee unanimously concluded that, we disagree strongly with those who would like to see Cancun fail; reflection and reform are desirable, but failure at Cancun would be very bad news for developing countries. There are two principal, interrelated reasons why the failure of the process at Cancun is bad news. Recently, multilateralism has been substantially undermined. Multilateralism should be the international community trying to work together, but multilateral institutions, from the UN downwards, have been undermined, most strikingly by what transpired over Iraq. However, the WTO is a good example of a multilateralist institution. Every country has a vote and, in theory, a veto. The failure at Cancun gives strength to those in Washington and elsewhere who argue against multilateralist institutions and the US working through them.

Further bad news for developing countries is that the US will now almost certainly pay lip service to the WTO while, as Ambassador Zoellick made clear, embarking on bilateral negotiations with individual countries, which will inevitably be one sided. The US will favour bilateral trade deals with favoured nations, which is likely to lead to a fracturing of the global trading system and a growing sentiment of protectionism in the US.

Discussions will continue in Geneva, and there is hope that this WTO round can meet its 2005 deadline. However, lower-key talks in Geneva will not have the same urgency as a summit of 146 nations, and that takes us back to leadership. If there is to be any meaningful movement on completing or taking forward the Doha development round, the developed world will have to make it clear that it is now willing to make meaningful concessions, especially on agriculture, that will bring real benefits to the developing world. Put bluntly, the US, the UK and others will have to make it clear that they are as serious about waging war on poverty as they are about waging war on terrorism.

In Europe, commissioners and officials are talking up their alibis and excuses for there not having been more progress. Pascal Lamy has described the WTO as a medieval organisation, but I am unclear about which aspect of the middle ages he feels it reflects. Just as the US, the UK and other critics say that their involvement at the UN is limited because the UN needs reform, so too we hear the cry that it is not the players that need to change, but the institution itself that is at fault and needs reform.

I hope that the EU can kick-start some change, but the difficulty in the crucial issue of agricultural reform is that several EU states—not just France and Germany, but countries such as Spain and Ireland—are content that so little progress has been made. G20 countries such as China, Brazil and India could help to kick-start the process by saying whether they would be willing to accept some interim compromises. It was recently reported in the Financial Times and elsewhere that the South African Trade Minister, speaking on behalf of the G20 countries, said that there was still plenty of life in the talks, but only if the EU and the US made moves in their direction. That does not leave one overly optimistic.

I urge Europe to make moves, but it will do so only with the prompting of Governments such as the UK's. If Europe wants to display leadership and to help developing countries, it should take the lead in reigniting the international trade talks that collapsed at Cancun. The failure at Cancun is threatening to torpedo the rest of the Doha trade talks. The US is picking poorer nations off one by one in unilateral negotiations, while trade blocs, especially in Asia, are planning their own regional deals. There could be difficulties if poor countries abandon the peace clauses under which they voluntarily refrain from litigation over subsidies. The UK has all but given up on rekindling the talks before the US presidential elections, and I suspect that it is hoping to use its presidency of both the EU and the G8 group of industrial nations in 2005 to kick-start the process.

In theory, there is still a mid-December deadline for sorting out the unresolved issues from Cancun, but the honest acknowledgement to us by the Secretary of State for Trade and Industry in her latest evidence that the last two years of WTO negotiations have been a "missed opportunity" leads one to pessimism.

We have a duty to try again. A new factor from Cancun was the emergence of a welcome new force of the G20, which refused to lie down and be squashed by the G8 steamroller. The EU should suggest a five-year timetable to end all farm subsidies and dare the US to do the same. The US claims to be against subsidies for free market reasons. President Bush came into office planning to reduce farm subsidies but then caved in to Congress and hugely increased them. Europe is the worst offender and therefore has most to gain from taking the initiative.

Our report rightly pays testament to the efforts of the UK and the Department for International Development to support developing countries. If that aim is pursued by the Government, they may not be put in the position where they have to accept proposals that damage the prospects of developing countries trading themselves out of poverty. The real test of the trade round is whether, at the end of the day, the Doha development round is really a development round.

3.3 pm

Mr. Tony Colman (Putney)

It is always a pleasure to follow the hon. Member for Banbury (Tony Baldry), who has put forward the cross-party view of members of the International Development Committee.

I pay tribute to those who did the advisory work for us. It is a team effort, but I want to draw attention to Alan Hudson and Sheila Page from the Overseas Development Institute, who worked with us on the report. No less a person than Eveline Herfkens, who is Kofi Annan's special ambassador to campaign for the millennium development goals, waved around our report, unprompted, at a meeting that she addressed in Cancun. That is an example of how the report of a House of Commons Select Committee can echo around the world. Several delegations, particularly from developing countries, also referred to it.

As the hon. Member for Banbury said, my hon. Friend the Member for Glasgow, Maryhill (Ann McKechin) was also present, as was the right hon. Member for Suffolk, Coastal (Mr. Gummer). However, I was the only official delegate—if I can describe myself as such—from the United Kingdom delegation. I say that not in terms of pride, because I had hoped that all the others would be present at the discussions, too, but from the point of view of what I am about to say. As the hon. Member for Banbury said, regular briefings were given by Commissioner Pascal Lamy to Members of the European Parliament as negotiations continued, but Members of the state Parliaments of the European Union were excluded. I took up that matter with Commissioner Lamy yesterday when he gave evidence. He said that it was the decision of each member state Government that individual parliamentarians who were serving on the state delegation should be excluded from such briefings. Will the Minister consider whether the UK Government would have any objection to parliamentarians being part of such briefings?

Mr. Simon Thomas (Ceredigion)

The hon. Gentleman might be interested to know that I was fortunate enough to attend the world summit on sustainable development, when we received similar briefings from the UK Government. Parliamentarians who were not part of the official delegations were allowed to attend the briefings. It seems that the UK Government have an open door in such matters, so perhaps it is the European Union, not the UK Government, which is holding hard.

Mr. Colman

Trade is dealt with specifically at European Union level. Pascal Lamy made it clear that in that case, he is reporting to the European Parliament, not to parliamentarians of each Government. Obviously, the situation at the world summit on sustainable development, which I also attended, was different. However, will the Minister still see whether matters can be sorted out? Clearly, parliamentarians from member states should not be at a disadvantage compared with Members of the European Parliament.

I am only attempting to fill the gaps in the excellent tour d'horizon given to us by the hon. Member for Banbury. Will the Minister to pick up on sustainability impact assessments of trade agreements? That is something that the trade commissioner brought forward in the meetings before the start of the Cancun summit. It was dealt with particularly by Robert Madelin, of the European Commission trade directorate-general. In fact, he considered what impact trade liberalisation could have on individual countries. The Prime Minister of Senegal was present at the meetings and said how helpful that had been to him.

However, I was backed by different officials when I said that if such impact assessments are made, that should be done jointly between the developing country and the European Union, and that the developing country should be able to say which consultant should do the work, and comment on the assessment before it goes into the public domain. Officials told me subsequently that they were hoping to follow that up, and that Pascal Lamy had said that he thought the methodology of the impact assessments still needed to be looked at. Will the Minister take such matters on board?

My second point concerns the announcement at Cancun made by Shengman Zhang, the managing director of the World Bank. He announced new moneys that would be available for developing countries if they had a shortfall in their budgets because they had reduced their tariff barriers and had a problem in meeting the millennium development goals. Can the Minister explain the extent to which the World Bank is continuing to undertake such work, or whether it is holding it on the back burner? It is extremely important that if developing countries take forward the trade liberalisation agenda, they are not disadvantaged by the problems that that can cause for their budgets.

The hon. Member for Banbury referred to the Derbez text, which appeared on the Saturday. We had some four days of negotiations with nothing on the table. Then the text came out, and we had only 24 hours of negotiations. I differ slightly with the hon. Gentleman, because the view expressed to me was that there was much in the Derbez text that could lead to an agreement—that is, much on agriculture, nonagricultural manufactured goods and special differential treatment, but clearly not on the Singapore issues or cotton. There is much in the text that we should start from, so I disagree with the hon. Gentleman, who feels that we have to start completely from scratch.

Tony Baldry

I clearly did not make myself clear. I was referring specifically to the parts of the text relating to cotton.

Mr. Colman

Then I support the hon. Gentleman. However, I would correct him slightly on one other matter. On the Thursday evening, after the hon. Gentleman left Cancun, two plane-loads of United States Congressmen and Congresswomen arrived, including the chairmen of all the key committees, so there was quite heavyweight representation on the Friday, Saturday and Sunday. I understand that had the discussions moved on to agriculture, a new text was due to be tabled on the Sunday, after the Singapore issues had been dealt with.

On the Singapore issues, there is an extremely important letter in today's Financial Times from Jean-Pierre Lehmann, the founding director of the Evian group. He has taken up the point that I raised in the Select Committee about the fact that late in the evening of Saturday 13 September, Pascal Lamy was still refusing to unbundle the Singapore issues. To me and to many watching, clearly seeing that the issue could not be agreed on, that seemed a crazy way forward. I agree with the hon. Member for Banbury that it was extremely depressing to hear that Pascal Lamy feels that the offer has been removed from the table. Those are not the actions of someone who wishes to move the agenda on. I agree that there must be leadership, and that crucially, it should come from the European Union and the Government.

I would like to focus on two subjects in the report. Obviously, one relates to paragraph 77, which is on the issues surrounding agriculture and the need to remove not simply tariffs but phytosanitary tariffs. In early September, and at my own expense, I visited Kenya, where I heard that major work was being done with subsistence farmers, who were banding together in quasi co-operatives and supplying the major supermarkets in the UK through a supply chain. I found myself stumping around the foothills of Mount Kenya in extreme weather, visiting shamba after shamba of Kenyan farmers who were devoting between 10 and 25 per cent. of their shamba to growing green beans for the supermarkets of Britain.

I pay tribute to Silas Kinoti, Salome Mugatia, Jane Karimi, Sabastian Kinyua and Francis Koome. I visited each of their shambas, and was extremely impressed by the work that was going on, because they were producing not only for us but for their family, the village, Meru, and Kenya. It was extremely important to think about bringing together ways of developing crops, seeds and agricultural techniques used here and agricultural techniques that have been used for generations in Kenya, in order to deliver a significant green revolution on the back of globalisation.

The co-operatives were being brought together by Flamingo Holdings, an interesting company in which the CDC—the Commonwealth Development Corporation—has a small shareholding. That is an example of globalisation working for the poor, and it is absolutely right that it should.

The second subject, which came alive for me last night, is mode 4 of GATS—the general agreement on trade in services—which is mentioned in paragraph 120. I was extremely moved by the speech that Cardinal Oscar Rodriguez of Tegucigalpa in Honduras made last night to the all-party Catholic Fund for Overseas Development group. He said that hundreds of thousands of the poor of Honduras were being trafficked—and that they were coming back from the United States in their hundreds of thousands. He wants there to be formal agreements for the movement of people, and for those formal agreements to relate to training and skills. That is what is covered by mode 4 of GATS.

Ministers' response to our report contains this statement: While the net potential benefit for developed and developing country economies of freer labour movement is widely accepted to be large and positive, there are still likely to be a few unwelcome effects on a number of developed country domestic interest groups. These must be understood if they are to be properly mitigated. I agree with that. in relation to some of the issues that have been raised in newspapers such as the Daily Mail. However, on the other side, this is also an issue that relates to the movement of people between north and south, and to the need for doctors, nurses, teachers and other trained people who could develop the economies in the south. Many of them wish to move—for example. from the United Kingdom to South Africa—but cannot do so because there are strict restrictions on whether they can make that move.

In Kenya I met two of my constituents who were going to South Africa. One of them was trained as a surgeon and the other as a theatre nurse, and a South African hospital had asked them if they would give a year of their lives to working for it—but they had no work permits. That situation is being repeated again and again. There is a problem: many developing countries feel that it would be wrong for them to make a mode 4 GATS offer encouraging people to come from the north to work for a limited period—GATS mode 4 can last for one to three years—in order to deal with many of their major problems by fulfilling certain needs. This is also a problem on a south-south basis. For example, it is extremely difficult for a Ugandan nurse to work in Kenya, or for a Kenyan nurse to work in Uganda.

The International Development Committee's next area of work will be on international migration, so I have no doubt that we will return to this subject.

Mr. Andrew Robathan (Blaby)

Would the hon. Gentleman like to comment on the reports this morning in the newspapers—and on the radio, I think—about the Kenyans withdrawing work permits from expatriates who are working in their country, and who are probably developing its agriculture, industry and tourism? The Kenyan Government are now trying to cut back on all expatriate work permits.

Mr. Colman

I am pleased that the shadow Minister has drawn the attention of the House to that matter. The only reason why I did not bring it up is that I have sought clarification from the Kenyan Government, and I have not yet received it. If I manage to catch Mr. Speaker's eye in next week's debate on Africa, I intend to raise the subject, because what is happening does not make sense. Kenya is a country that has been reborn: it has a different attitude to development and governance and it wishes to create 500,000 new jobs a year, so it is extraordinary that that statement was made. However, I think that all Members would agree that the newspapers do not always get things right.

Tony Lloyd (Manchester, Central)

Does my hon. Friend agree that one of the concerns of the relatively new Kenyan Government is the amount of corruption that they have had to deal with in Kenyan society? One of the problems they faced was that work permits were being sold. That is what, at least in part, lies behind the present actions.

Mr. Colman

I have explained why I do not want to address this matter in detail now. However, I will say that the Financial Times described that as a possible reason for those actions. It is important for the House to hold its condemnation in suspension until it learns more of what is going on. I understand that the Minister is getting advice from his officials; if he is able to comment on this matter at the end of the debate, that would be very helpful.

The hon. Member for Banbury has covered everything. In winding up, I shall quote the Minister for Trade and Investment, who dealt with the negotiations for the first four days, before the Secretary of State arrived on the Thursday, and held the fort admirably. In the speech that he made for the Government to the full plenary, he said that it was important for us to help to drive prosperity and opportunity around the globe and above all in the developing world. The poor of the world have waited too long for governments to agree to create the economic opportunities, the jobs, and the hope they need. We must not fail them. We failed them in Cancun. The next meeting is on 15 December, and we must not fail them again.

3.20 pm

John Barrett (Edinburgh, West)

It was originally intended that a single report be produced in July 2003. However, the Select Committee decided, following a suggestion from the hon. Member for Putney (Mr. Colman), that we should produce two reports, one before and one after Cancun. In the light of events, that was clearly a wise move.

International trade has the potential to lift millions out of poverty and contribute to a stable and secure world. Instead, the north dumps food on developing countries and maintains barriers that severely restrict their access to our markets. It is important that this debate recognises and confirms the importance of those issues.

Ideally, a debate would have been held before the summer recess and the ministerial conference. Such a debate would have been useful in considering the detailed issues facing the ministerial conference, what the Government and the EU were hoping to achieve and, more importantly, how they were intending to achieve it. However, we are discussing the report that the Committee wrote after that conference. That report and its timing were decided before Cancun.

To make matters more interesting, we are meeting during the Select Committee's latest inquiry into the outcomes of Cancun. Just this week, we have taken evidence from Commissioner Lamy. It is not surprising that the debate should centre on what happened last month—apart from the Secretary of State's statement to the House, this has been our first real opportunity to debate the issues.

It goes without saying that the events at Cancun were at best disappointing; some would say that they were a complete disaster. Not only did they leave people questioning the point of the World Trade Organisation, but they left developing countries without the tools that they desperately need to lift their people out of grinding poverty.

It is only because we realise the immense prizes to be won from fairer trade that we get so frustrated and angry when progress is slow—when the institutions that could deliver progress fail us and the people in some of the poorest countries in the world, the talks collapse and real opportunities are lost. That is what happened in Cancun. We had a real opportunity for real change: to change the rules that force millions into poverty and to improve their lives. That chance was lost, and the welcome progress that was made on agriculture was lost in the ensuing collapse of the talks. It is not productive to point-score, but it is important to consider who was responsible. We can never let the shambles of Cancun happen again. We have to learn from what went right, what went wrong, who was responsible and why. Cancun will not be a total failure if such lessons are learned.

The importance of trade to developing countries is well documented. As Oxfam told us during our evidence sittings, if Latin America, Africa and southern and eastern Asia increased their trade exports by just 1 per cent., that would be enough to lift 128 million people out of poverty. In Africa alone, it would generate more than $70 million, five times what the region receives in aid. Those are extraordinary statistics, which those wishing to end global poverty should always remember.

Overseas aid is an important issue, and many Liberal Democrats want the Government to set a timetable for raising UK overseas aid to the magic level of 7 per cent. of GDP. Trade remains the great vehicle for developing countries to meet the millennium development goals, which are becoming more like aspirations than firm targets. If we are to meet those goals, the ability of developing countries to build their economies, increase their exports, and improve their GDP and incomes will have to be drastically improved by bringing down the barriers that they face. Such arguments are well known not just in this place, but in the communities that we represent.

In the relatively short time that I have been a Member of this House, I have noticed a stark increase in awareness about trade justice, which has been illustrated by the thousands of postcards that each of us receive, and the hundreds of thousands of people who have come to Parliament to speak out. The trade justice lobby in this country is a force to be reckoned with and it is one that is being sustained between its parliamentary visits.

Jeremy Corbyn (Islington, North)

The hon. Gentleman has received several cards and delegations on this issue, but I have not received any letters from those people who lobbied before the WTO summit saying that they regret the fact that there was a breakdown. Many of them have told me that they viewed the breakdown as a victory for the southern countries that were trying to assert their right to development over the interests of western Europe and north America. I do not understand why the hon. Gentleman is so upset about the failure to reach an agreement that would have been unfair to the southern countries.

John Barrett

Like the hon. Gentleman, I agree that the failure to reach an agreement is better than reaching a bad agreement, but it is not as good as reaching a good agreement. That was the failure. Had a good agreement been reached, it would have been far better than the eventual collapse.

Many of my constituents are not happy with what happened in Cancun, which in itself is no great surprise. What is significant is that those who have written, telephoned or e-mailed are not the usual suspects; they are not the people who regularly contact me as their M P. In fact, many have never contacted me before, but the organisation and co-ordination between these people is increasing. I recently tabled early-day motion 1830 on the campaign to get fair trade accreditation which is being run by Edinburgh university and other universities throughout the UK. That grass-roots campaign will ensure that the issue of trade, especially fair trade, will not go away. Those people will continue to press Parliament and the Government until action is taken.

So what of Cancun and the Select Committee's report? The Committee set down seven main challenges for the Government, ranging from agricultural reform to GATS and reform of the WTO. On one of those issues at least, progress was made and, ironically, sealed up before Ministers even got together in Mexico. I am talking about the Committee's call on the United States Government to stand up to their pharmaceutical lobby and reform the TRIPS agreement, a set of rules that left many developing countries unable to treat those suffering from HIV/AIDS or tuberculosis.

The deal struck by the US and other countries, including South Africa, Kenya and India, to allow for the production of cheap generic drugs for developing countries was a massive step forward. However, as my hon. Friend the Member for Richmond Park (Dr. Tonge) has repeatedly stated, the mechanisms for delivering decent health care must also be put in place. Drugs themselves will not solve the problem. Preventive action, along with proper medical supervision, must be provided if we are to win the battle against illness—a war that, regrettably, we are currently losing. Nevertheless, the reform of TRIPS was vital, which is why the announcement in August was so welcome.

Unfortunately, progress stops about there. Progress on the reform of agriculture, which formed the centrepiece of our report, was lost when the talks collapsed. That was particularly disappointing in light of the small progress, but progress nevertheless, that was made on the CAP. It leaves developed countries still subsidising their home industries by billions of pounds every year, while developing countries struggle to break through. Such double standards and hypocrisy should cease. Eventually, the EU and the US, the worst offenders, will have to realise that fair trade, not free trade, is urgently required.

A lot has already been said this afternoon about the Singapore issues. As the hon. Member for Banbury (Tony Baldry) pointed out, we warned the Government in blatant terms that pushing the Singapore issues could bring down the whole process. In our report, we said: The Government should unequivocally drop its support for opening negotiations on the Singapore Issues. These issues would overload an already full agenda. They are not wanted by most developing countries. And it is questionable whether the WTO is the right forum for agreements on investment and competition. The Singapore Issues are not developmental priorities.

Those warnings, which were repeated by NGOs and developing countries themselves, were pretty clear. The opposition of many countries to discussing the Singapore issues in Cancun could not have come as a surprise. In fact, I wonder whether they could have been more forewarned. Despite the warning, little notice was taken. On the last day, the position of the EU shifted with offers to give up investment and competition, although several countries said that an offer to drop transparency was also made—a commitment that seems to have disappeared since then. However, such actions proved to be too little and far too late. The practice of brinkmanship, as CAFOD described it to the Committee, is no way to do business in the WTO, and the EU must have learned that to its cost.

What was the role of the Government? The Secretary of State for Trade and Industry said that she wanted to put her and the Government's energy into CAP reform, but why was it not realised that CAP reform at Cancun was at risk, directly because of the Singapore issues? The channels of communication between the Government and the EU seemed to be ineffectual, perhaps even nonexistent. The EU is supposed to be a union of member states. If there is no system for member states to feed into and affect the actions of their representatives, it makes a mockery of both institutions.

The UK and the EU aside, Cancun also brought into question the structure and, for some, the whole point of the WTO. To discuss the internal workings of the WTO and their reform may be beyond the scope of today's debate, but it was interesting that Pascal Lamy said this week that the president of the WTO has less power to make decisions than the Chair of our Select Committee.

What is not beyond the scope of the debate, however, is the question of why reform is necessary. Perhaps for the first time, developing countries got their act together and proved an unprecedented match for the traditionally strong WTO players such as the US and EU. The formation of the G22 group was significant, and it was a move that seemed to worry, and even shock, the traditional WTO powers. The least developing countries, African Union members and African, Caribbean and Pacific countries realised that they were stronger together than apart.

Mr. Colman

Does the hon. Gentleman agree that that move, which gives a greater voice to developing countries, was supported by the UK Government?

John Barrett

I agree. One positive aspect from Cancun may be that those developments took place. People were forced to form alliances that will, we hope, take the agenda forward.

The WTO and its member countries are on new ground, one on which the practices of the past are no longer applicable, but Cancun also showed that attitudes on both sides will have to change if progress on trade is ever to be made. For the US and the EU, the formation of the new groups should be welcomed not feared, while developing countries must realise that with influence and strength comes responsibility. The countries that seemed to take glee in the failure of Cancun are misjudged. As I said before, no deal is better than a bad deal, and deals of the past surely make that clear to us, but no deals are still worse than good deals, which can help the most vulnerable in our world—people who are crying out for our help so that they can go forward to help themselves.

We must never let the shambles of Cancun happen again. That requires a will that I appreciate extends beyond the scope of the Minister and the Government, but I hope that they can play their part in creating that will, so that the momentum that took us to Cancun is not lost permanently. I hope that the Committee's new inquiry into the lessons of Cancun will be able to play a part and that the next time we debate the issue, we can do so in more positive circumstances.

3.33 pm

Ann McKechin (Glasgow, Maryhill)

I welcome the International Development Committee's report, which was both timely and well received in many quarters. I also concur with the comments made by the hon. Member for Banbury (Tony Baldry). The Committee's report is as relevant after the failed Cancun summit as it was before it. As has been mentioned, I had the privilege of attending the parliamentary conference in Cancun as part of the Inter-Parliamentary Union delegation. That conference ran parallel to the main ministerial conference, and accordingly I was able to view the summit at close quarters, although I left just before it collapsed.

There has been much comment on why the talks failed, and what should be done next, and I would like to offer my own reflections on my visit. To be honest, few people were optimistic before Cancun, beyond an earnest hope that we could keep multilateralism alive in the current global political climate, and perhaps make some modest progress. As the hon. Gentleman said, the World Trade Organisation director general, Dr. Supachai, intervened personally to try to make progress on cotton subsidies for some of the world's poorest nations in west Africa, as a symbol that the conference was concerned about the needs of the developing world in this trade round—but even he failed with that modest proposal.

On the question of process, we must undoubtedly stop future summits being the trade equivalent of a travelling circus. With the failure to meet any of the agreed negotiating deadlines, the summit was immediately burdened with an overloaded agenda, which encouraged a game of high-stakes poker among the participants. That situation worked particularly against less developed countries, as their priority issues, such as special and differential treatment, were downgraded in the talks.

All states must commit themselves to ensuring that most of the hard negotiating is carried out throughout the year, back in Geneva. The ministerial conferences should be viewed principally as an opportunity for Ministers to meet, exchange views and discuss future priorities, rather than as a high-stakes negotiating forum. Such a change in process would also permit greater democratic input and scrutiny from nation state members and increase the transparency of negotiations. If there is one thing the WTO needs, it is surely to improve its public image and strive for greater democratic legitimacy.

At the summit there was a feeling of chaos, with moods swinging from modest optimism to sudden failure. The first couple of days were wasted in posturing rather than genuine talks, and there was unhappiness that the process was driven by chairmen rather than by member nations. Many poorer nations felt that the chairs of the initial working groups failed to reflect the concerns of developing nations in the draft text, and were very annoyed about the attempt to link investment talks with agricultural issues. The African parliamentarians' statement said: The Green Room negotiations remain undemocratic, non-transparent and highly exclusionary to many developing countries and yet critical decisions are being taken there. It is difficult to know who is involved, what is being discussed, where these meetings are being held and the implications of the outcome of such meetings. The move at the summit to leave the working groups open to all members is certainly welcome, but much more should be done. The WTO should in future ensure that the facilitators of working groups are neutral, the chairs are elected, and there is far greater transparency in the mechanics of the negotiations.

As well as an overloaded agenda, the central problem was that both the European Union and the USA came to the negotiating table with comparatively little to offer. Accordingly, the Doha approach of ensuring that poor countries' priorities were resolved first, rather than forcing them to make damaging trade-offs, was unlikely to succeed. I spent some time attending the plenary session of the ministerial summit; admittedly, it was not the most exciting occasion. Many of the major players did not stay for long, but smaller and often poorer nations attended it as they waited for the draft text. The language of the speeches, especially those of the EU Ministers and the accession states, was interesting. There were far too many defensive arguments about common agricultural policy reforms, rather than about the needs of developing countries.

The French Trade Minister spent much of his speech arguing about the cultural value of French agricultural life and the possibility of referring it to UNESCO; the Italian Trade Minister argued about the unique quality of Italian soil. I am afraid that such language continued into the parliamentary conference, where Mr. Daul, the chair of the European Parliament's Agriculture Committee, tried to defend current EU policy. He said that the EU should not blush, because it was part of nature that required it to subsidise its agricultural policy.

I congratulate the hon. Member for Banbury, who by good fortune was the first person from the floor to be called after that speech, because he said, "Mr. Daul is quite right. We should not blush, we should just hang our heads in shame, because in a period of two weeks we subsidise farmers in the EU as much as all the aid that is given to Africa." One does not have to wonder how all that must have sounded to delegates from the poorest nations, where agriculture represents the main source of employment for overwhelming numbers of their people.

In contrast, I congratulate the Minister for Trade and Investment, who placed great emphasis on the need to concentrate on the development agenda, and did not mention the Singapore issues. Sadly he was just about the only exception to the rule. The EU must consider the language used by its member states, as well as by the Commission, if it wants trust in the negotiating process to be restored.

As for negotiating tactics, the EU must quickly learn some hard lessons from the summit's failure. I believe that the resolve of the newly formed G21 grouping was underestimated by EU negotiators, as was the anger of the less developed countries at the lack of real progress on their priorities. It was clear from the declarations of the mini-ministerial conferences earlier this year in Africa and Asia that there was absolutely no support for the Singapore issues from the majority of member states. Despite the statement in the Government's response to the Select Committee report that a substantial number of developing nations see the potential benefits of framework agreements, 90 states indicated their opposition to those issues at the summit. They were viewed by many as a distraction from the main issue—agriculture. However, Mr. Lamy and many individual EU states attempted to use them as the key to achieving a settlement, in a high-risk strategy which, as we know, did not work.

I welcome the Government's commitment to dropping two of the most contentious issues. However, given the current fraught relationships within the WTO, perhaps I could ask them to consider dropping the remaining Singapore issues until the developmental priorities have been dealt with. They are viewed by many member states as an obstacle to progress, and the EU should instead concentrate on how better to tackle issues such as export subsidies.

As the hon. Member for Banbury said, there was a similar lack of political will from the US side. As I said earlier, even the efforts of Dr. Supachai himself could not broker a deal on cotton for west Africa that would have amounted to a mere 5 per cent. of current cotton subsidies. Frankly, that was a disgrace, and will probably lead directly to thousands of African cotton farmers facing bankruptcy—although prevention would have been easier than trying to find a cure. US negotiators made it clear that they did not envisage any other substantial concessions in this round until after the next presidential elections; in the meantime they will revert to relying on bilateral negotiations that will inevitably weaken the ability of the poorest nations to negotiate.

What of the way ahead? The Cancun collapse is a symptom of the instability of the WTO system as it has been emerging lately. A multilateral system must be based on the perception by its members of shared benefits. Once a large proportion of the membership feel that the system demands only "give" from their side without any possibility of "take", the system is bound to become unstable. Instability in the system will hurt all the member countries, whether big or small. Restoring trust in the system is vital.

All sides must recognise that, with agriculture in particular, there is now a south-south divide as well as a north-south divide. The G21 emphasises the need to reduce tariffs and export subsidies, but the main priority for the poorest, least developed countries will remain special and differential treatment. Any settlement must take into account both sets of needs.

The emergence of the G21 and its ability to show a united front at the summit should force both the EU and, in time, the US to recognise the need to change their negotiating positions. The forthcoming expiry of the deadline on the peace clause will probably concentrate minds more rapidly in the EU, as the prospect of a damaging referral to the WTO disputes panel is unlikely to be far away. Given the current political make-up of the US Administration, and its tendency to isolationism, it is vital for the EU to recommit itself to a multilateral system of negotiation and reject proposals to concentrate on bilateral negotiations. It should instead press for a new timetable in which the priorities of developing countries are tackled first, and it must show political will in considering substantially greater offers. A fixed timetable on ending the dumping of agricultural produce should be a priority.

The effect on the US is not likely to be so immediate. However, although the US may have a multitude of bilateral and regional arrangements, when it comes to enforcement of commitments regarding goods and services, it has to take shelter in the WTO framework. It has made tremendous gains in the Uruguay round in all those areas and it continues to enjoy those gains. Given that background, the threat by the US to give up or underplay the WTO route does not appear serious, if the business community there holds any sway over Government policy.

The WTO secretariat, too, must change its approach and style of functioning. A clean text, as used in Cancun, can facilitate negotiations only if the preparation process has been open and transparent and there is a fair and objective balance between the differing positions. The institutional machinery of the WTO must show, without a trace of doubt, that it is not influenced by the major developed countries. It must be neutral and objective, and clearly appear to be so. Much damage has been done by the perception that the machinery is used by the major developed countries to advance their own narrow interests. The machinery should work for the system, not for individual countries, however powerful.

In the longer term, the WTO must work towards far greater cohesion of its policies with those of other international bodies, such as the International Monetary Fund and the World Bank, particularly as they affect developing nations. It should consider adopting the millennium development goals as a guiding principle and start a process that allows it to review existing policies and assess new proposals independently on the basis that development needs are truly a priority, both now and in future.

I share the Government's disappointment at the failure of the talks, but like them, I recognise that Cancun was not the end of the process. This has been a difficult year to promote international agreement in any field, but the needs remain and the arguments for fairer trade are just as strong. I urge the Government to meet the challenges ahead and to restore the process so that it can work for all.

3.47 pm

Mr. Simon Thomas (Ceredigion)

I am pleased to have an opportunity to take part in the debate. I begin by paying tribute to the seventh report of the International Development Committee, which is the basis for the debate. The report turned out to be prescient in considering the issues that were likely to be the stumbling blocks at Cancun and in examining some of the ways round those issues. I pay tribute to the hon. Member for Banbury (Tony Baldry) and the other members of the Committee for producing the report. If all Select Committee reports were as useful, prescient, informative and combative as this, perhaps the main Question being debated in the House today would be well worth supporting, but that is another debate altogether.

What emerges from the report and what has happened since Cancun—I shall concentrate on what has happened since—is that we have seen a change in the WTO negotiating system. However, I do not think that the EU has taken that change on board yet. Nor am I convinced, although the Minister may convince me later, that the UK Government have taken it on board. I speak as a critic of many of the things that have happened at the WTO and under the general agreement on tariffs and trade in the past, and to my mind there was a sea change at Cancun. It was a very important event, which could take us a step closer to trade justice, not a step away from it. We should consider Cancun not a wasted opportunity. but a signpost through the route that we should be taking for the future.

The hon. Member for Glasgow, Maryhill (Ann McKechin) saw the emergence of the G20-plus or whatever they were—the exact number may be debated—and of the G33 as a south-south divide, but we should see it as the south-south interpretation of what the WTO should be achieving. For the first time, instead of individual countries being pushed around in the WTO negotiating system, those countries have come together and spoken clearly for themselves, their populations, their priorities and the priorities of developing countries as a whole.

Paradoxically, failure at Cancun showed how the WTO could work in future to make progress on trade justice. It showed how the WTO was different from the organisation that many anti-globalisation protesters criticise. They say that that body should not even exist. However, those of us who have taken the view that some sort of body should rule on world trade were at least encouraged by certain aspects of what happened at Cancun, because it showed that it was possible for a body such as the WTO to have a better balanced approach to the issues, and for developing countries to state their views clearly and to hold firm and fast to their negotiating position.

It is now incumbent on the developed countries of the world—we, of course, address these remarks in particular to the UK Government—to take on board the lessons of Cancun and to ensure that the development agenda, which the hon. Lady referred to as the Doha development agenda, and that vision are at the forefront of proceedings in Geneva and in forthcoming negotiations.

I want to concentrate on a couple of issues that I hope the Government will consider. From the evidence given to the Select Committee over the past couple of weeks, particularly that of the Secretary of State for Trade and Industry on 22 October, it is clear that the Government have accepted that two of the Singapore issues—international investment and competition policy—are now off the agenda. However, as the hon. Member for Banbury mentioned, Pascal Lamy gave evidence this week and stuck to the other two Singapore issues—transparency in Government procurement, and trade facilitation—as well as the first two. No movement has been made and no lessons have been learned from Cancun.

The position that the EU was prepared to negotiate, albeit at the last moment, should be the starting point for the next set of negotiations. To be frank, not starting from the EU's position on the last night in Cancun shows bad faith in the G20 and the other countries. That underlines the fact that the traditional negotiating positions taken by developed countries, of brinkmanship and pushing matters to the last minute, did not work at Cancun and will not work in the future. We should have the good grace to accept what happened at Cancun and, at EU level, drop at least the two outstanding Singapore issues, and preferably all of them. Will the Minister tell us whether the Government are prepared to drop both those Singapore issues, as earlier evidenced to the Committee, or to go further and drop the Singapore package altogether to make progress on other issues?

Another important issue is agriculture. The report makes a compelling case for the elimination of agricultural subsidies in the north, in the context of increasing subsidies in the American case, and the maintenance of subsidies in the EU case. I was interested to hear what the hon. Member for Glasgow, Maryhill said about some of the remarks made in the plenary sessions. I represent a strong agricultural constituency, and that has a cultural impact because the Welsh language is strong in Welsh farming. We must ask ourselves what happens when we decouple agricultural payments from cultural issues. The answer lies in a statement made by Nicholas Stern, the chief economist and senior vice-president of the World Bank, on 4 April: It is quite understandable that rich countries want to improve the lives of low-income people in their own rural areas, especially those who work on the land. But there are many ways to do this that do not rely on subsidies linked to output.

We must stick firmly to decoupling to ensure that we can move the agriculture round further in the WTO. The recommendation in the report makes it clear that developing countries have the right to protect specific products that are vital for their livelihoods and for food security in those countries. It is crucial that developing countries have that protection and that subsidies in the north are eliminated. The G33 made a clear case at Cancun for special and differential treatment.

The other issue that developing countries want to he upfront on the agenda, and not hidden behind the Singapore issues or anything else, is the general agreement on trade in services. The report concurs with concerns that many of us, inside and outside Parliament, have about the impact that GATS has had on individual developing countries. We are especially concerned to ensure that the least developed countries are able to protect their domestic economies and develop them in line with their objectives, and not necessarily for exploitation by developed countries. The question that arises for the UK Government is whether they would support the idea of carrying out an assessment of the impact of GATS on the millennium goals and the implications for services within those developing countries. Are the Government prepared to take time out from the GATS process to consider its impact on developing countries so that we can have a better understanding of it?

Although some success can be achieved from the failure of Cancun, there is a danger that there will be greater reliance on bilateral trade negotiations. Cancun showed that multilateralism can or at least has the potential to work in favour of developing countries. Our history shows us that bilateralism rarely works in favour of developing countries; more often than not it leads to their exploitation. I hope that the Government will commit themselves to pursuing a multilateral approach and even go as far as to rule out, if necessary, bilateral trade or investment agreements until we are able to complete the Doha round. That would be a fairly crucial show of faith by the Government.

One question that remains after the failure of Cancun—a failure by developed rather than developing countries—is how developed countries can use their wealth to support growth and facilitate development in developing countries. Successful development in that regard rests on two things. First, we need a climate that facilitates investment and growth. Secondly, we need to empower poor people so that they can participate in that growth. To date in the WTO and in general we have concentrated forcibly on the first. We have concentrated on investment issues and growth issues. We have sought to make the agenda at WTO negotiations look like a northern or developed world agenda.

When it comes to the development of poor people and their direct empowerment within this process, it took the G20 and G21 at Cancun to wake us up to the need for that to proceed. Nicholas Stern of the World Bank said: It is hypocritical to preach the advantages of trade and markets and then erect obstacles in precisely those markets in which developing countries have a comparative advantage. That hypocrisy does not go unnoticed in developing countries and the big message from Cancun is that developing countries noticed that hypocrisy and united to take action against it. We must learn from that.

I hope that the Government will press the Commission to drop all four new issues—the Singapore issues—from the negotiating mandate in Geneva until we can solve the main Doha development vision. We should look at CAP reform and why it is not progressing on a yearly basis. I am pleased that the Government have said that they will go ahead with decoupling but I understand that it leaves a long period of time when the EU as a whole will still be paying huge subsidies, not only for cows, which the hon. Member for Banbury mentioned, but to other agricultural sectors.

We need to reaffirm our belief in that rules-based system of trade, and we see the opportunity presented at Cancun to work the WTO in a truly democratic manner. It started to show signs of taking a refreshing approach on these matters and of being a genuinely democratic body. But as other hon. Members have mentioned, there is a real need for reform.

Finally, we should recall the original concept of the Doha development round, which was, first and foremost, that it should be a down-payment on behalf of developing countries. Their priorities would be resolved first, so we would not have to keep asking them for damaging trade-offs, but that has not been done. We have not given the developing countries a "dowry" to enable them to start life as players in the WTO; instead, we have demanded concessions from them.

We need to return to the original vision of the Doha agreement. I hope that the Minister will say how he expects the Government to realise that vision, because that is what parliamentarians want, and as the hon. Member for Banbury said, it is what our constituents tell us they want.

4 pm

Mr. Kelvin Hopkins (Luton, North)

I welcome the Select Committee report. Some fine informative speeches have been made in the debate, and passionately felt views have been expressed, which have helped me to develop my thoughts as the afternoon has progressed. I am not a development specialist, so I feel something of an outsider, but I have some suggestions that I hope my hon. Friend the Minister will note.

Cancun was a turning point: it was the first time that the poor world stood up to the rich and refused to be browbeaten. It was thus an historic event, which I welcomed very much. There has been plenty of evidence in the debate that the debacle was caused by the cynical action of the developed nations, specifically the EU and the US. A quotation from ActionAid said it all: The EU and US leave Cancun in shame, exposed as cheap conmen. The rich countries have only looked after their own interests and clearly never had any intention of offering anything of real benefit to developing countries. If the WTO can do no better than this, developing countries will simply question why we need it at all". That is strong language, but many of us agree passionately with that statement.

It must be sickening for the poor nations to be lectured on the wonders of trade liberalisation in the face of the fierce agricultural protectionism of the rich countries. It is utter hypocrisy to force poor countries to open up their markets to the rich while the rich protect their own markets from competition from the poor. I totally support the action of the poor world at Cancun.

As we know from elementary economics, the supposed benefits of free trade derive from the theory of comparative advantage. If each country specialises in what it can do best, production is maximised to the benefit of all. That is the simple theory—but of course the poor can produce agricultural products, yet we are stopping them and forcing them to accept dumped produce from the rich countries in the very sectors in which they can make contributions to the world economy. That is iniquitous. That travesty of justice must be challenged, not by wringing our hands in anguish, but by trying to do something and finding a way forward.

With the common agricultural policy, so many Ministers have said, "Now we have reform," but nothing fundamentally changes. As I have often suggested to Ministers in European Standing Committee B, in early-day motions and elsewhere, we should seek not merely reform of the common agricultural policy but its abolition.

The only effective way forward is to repatriate agricultural policy to member states. Beyond that, we must switch subsidies from price maintenance systems to income support systems. Price maintenance systems drive the production of surpluses. If they are taken out of the picture, and farmers' incomes are subsidised directly, farmers will have no incentive to over-produce and there will be no surpluses to be dumped on world markets at rock bottom prices, destroying poor countries' markets.

Reform is a weasel word. What we want is abolition, and Britain is well placed to press for it. In a recent debate in this Chamber on regional policy, it was pointed out that every region of the United Kingdom, even the poorest, is a net contributor to the European budget, simply because of the operation of the CAP. Abolition is the way forward, and we have an absolute advantage in that respect. It has been said many times this afternoon that countries are acting from motives of self-interest. If we appeal to their better nature—and some of them do not appear to have a better nature—we will not be very successful. They have to be pressurised, and we can put pressure on the EU to seek abolition of the CAP, because we do not benefit from it in any way.

Beyond that, we have to press the other member states of the EU to adopt income support systems rather than price maintenance systems for subsidising agriculture. It is perfectly acceptable for France to want to preserve its rural culture and subsidise its farmers. We will not get very far by insisting that it abandon agricultural subsidies altogether, but we could say, "Switch all of the money you spend on subsidising production through price maintenance systems directly to your farmers. At that level, you can regulate the gradual reduction of farming in France and maintain your rural culture."

Ann McKechin

Can my hon. Friend confirm that there needs to be some EU control aver the dumping of subsidised products on developing nations? Allowing each country to decide in turn might reduce the effect of dumping, but dumping could still occur.

Mr. Hopkins

I thank my hon. Friend for her intervention, but I was about to say that it should be legitimate for poor and rich countries alike to reject imports of subsidised dumped agricultural produce. I do not accept the shibboleth of trade liberalisation without question. It would be a quid pro quo, and a part of the buttressing of a new system of agricultural subsidies, to give countries the right to say that they would not accept dumped agricultural produce, but would pay proper prices.

There are other things that could be done by Britain acting alone. As we know, compared with other countries we are generous—although perhaps not generous enough—in giving aid to the third world. We do so directly through the Department for International Development, and that is efficient, effective and ensures that the aid goes to the right places. However, we also give some of our aid through the EU. That aid is distributed inefficiently and, we understand, from time to time with a degree of corruption. It also goes to the wrong places. Because of the influence of France, in particular, the aid goes to relatively better-off francophone countries round the edges of the Mediterranean, instead of to sub-Saharan Africa, for example, where aid is much more necessary. We should at least consider means by which we can reduce our contribution to the aid budget of the EU and instead distribute that aid through DFID. That would bring great benefit to the poorest nations in the world and enhance our already good reputation for supporting the poor of the world.

There are other ways in which the developed world exploits the third world, and I recently came across an example from the Caribbean. A friend went on holiday and stayed in a hotel owned by Americans, who brought all the food in from America. The hotel owners gave a minimal amount of employment to local residents at very low wages, so the benefit to the country involved was very small, while the benefit to the company owning the hotel was considerable, as were the profits to the producers of the American food brought in for the guests.

Enclave development, even in tourism, is still a factor, and we must challenge it. We have to say to third world countries, "If you want to insist that hotels use local capital, labour and food and pay proper wages, we should accept that." In many cases, of course, the developed world carries out enclave development simply to avoid labour laws that would make developers pay good wages and observe health and safety provisions. It does that to avoid environmental constraints, too; environmental laws in poorer countries are often waived to encourage investment. That is iniquitous. We have to say to the third world, "If you want to restrict what happens in your country and the amount of foreign involvement in your economy, that is perfectly acceptable." In fact, I would encourage that.

The trickery in world trade is of long standing. Indeed, in the past the EU has, through the Lome agreement, used its power to pressurise and exploit third-world countries. That agreement was portrayed as a generous arrangement to help the third world, but what it actually meant was that west African countries that produce wood could not produce furniture, because that was a high value-added activity, and so had to be done inside Europe. They were forced to export their wood, but they could not export it to a neighbouring country because that country might have added value by sawing up the planks, or making components for furniture. It all had to be exported to Europe. The big value-added components of furniture manufacturing were therefore produced in Europe, and not in third-world countries. Those are the kinds of tricks that developed nations have used for generations to ensure that the poor stay poor and the rich stay rich. It makes a travesty of so-called trade liberalisation.

Liberalisation is not the way forward, and I challenge the view that it is the route to wealth and development. As Keynes and many other economists have pointed out, free markets left to their own devices tend to redistribute to the rich and away from the poor—they polarise the rich and the poor. It is only when Governments intervene in economies and redistribute that we see not just greater social justice and economic equality, but faster and stronger growth. The post-war world as arranged at Bretton Woods was fairly protectionist; it may have been more liberal than what we had before, but compared with what happens now it was protectionist. Countries had tariffs, exchange controls and their own currencies, which they adjusted for the benefit of their own economies. In that era we had the highest rate of growth in the history of the world—the highest employment, a growth in equality, a growth in welfare states and a growth in human welfare of previously unimagined proportions. It was a relatively protectionist world, not a liberalised world.

I suggest that if we go for full trade liberalisation and markets, rather than intervention, we will have a world that is not just more unequal and unfair, but poorer into the bargain. Some of the shibboleths built into the trade theories at the WTO are wrong and should be challenged. I hope that we can consider them in future debates.

4.12 pm

Tony Lloyd (Manchester, Central)

I begin, as I must, by saying that the Select Committee's report is important, and it has enduring value because of how the world has failed to move on, as we saw in the run-up to Cancun.

We need to remind ourselves that we are not talking simply about a trade negotiation, or even about trade justice, but in many cases about whether communities live or die. That is the scale of the debate. Whether Cancun is a success or a failure is perhaps an arbitrary judgment. By any standards, the exchanges today have been important, because it is certain that a bad result in Cancun would have been massively worse than the non- result that we got. The negotiating positions of the US and EU were such that they could have produced a bad result if they had had the power to drive through their agenda.

It is worth while recalling the recent words of the outgoing African Union commissioner for trade, industry and economic affairs, Mr. Vijay Makhan, who was asked what Africa would do if things did not change. He said that Africa might have to reconsider whether it is worthwhile to stay in an organization that is not proving its worth. That reflects the great pessimism in large parts of the world as to whether the WTO is prepared to take not just the mechanical, but the political steps to reform itself.

What was on offer at Cancun simply was not acceptable. The hon. Member for Banbury (Tony Baldry) competently and coherently explained some of the enormous difficulties, such as the impossible position held by the US on cotton, which could not have been accepted by many of the cotton-producing countries around the world. There must be an acceptance that 25,000 US cotton farmers cannot have their livelihoods subsidised in a way that puts at risk millions of people who depend on cotton in Africa and other parts of the world. It is obscene for us even to contemplate that.

However, our own European trade position was unacceptable. The position adopted in Cancun by Pascal Lamy, the EU Trade Commissioner, in terms of both the contents of the negotiation and the tactics, was one that—as the hon. Member for Banbury was quoted as saying in a different context—should leave us hanging our heads in shame. Not only did it do no credit to us, it was potentially massively destructive for the poor of the world.

The Singapore agenda was irrelevant at Cancun; it should not have been pushed forward. I echo those who have already said that this afternoon to my hon. Friend the Minister. I hope that we will not only knock away the two things that Pascal Lamy negotiated on and now wants to bring back into the negotiating forum, but kick all four of the Singapore legs out from underneath the negotiating table. They will not advance the interests of the EU or the US, or those of the developing world. Why they are there is a mystery to everybody—except, perhaps, Pascal Lamy.

We need to move forward from the Cancun agenda on some things. There are different positions that I want the Minister to comment on. I have already quoted the view of some in the developing world that they are suspicious of whether the WTO can be properly reformed. It is worth reflecting on the words of Yash Tandon, the director of the Southern and Eastern African Trade Information and Negotiations Institute, who was at Cancun and took part at the fringes of negotiation, and whose assessment was that all the members of his organisation were in favour of the WTO being preserved. There is a strong voice from Africa in favour of the WTO's continued existence, but only if we are prepared to take the necessary political steps to reform it.

There are strong words from Brussels to the effect that Pascal Lamy no longer wants to engage in this kind of multilateral debate, but wants to shrink back into bilateral negotiations. That may be good for the EU, but in the end it is not good for what the EU ought to represent in the world, and it is certainly not good for the poor of the world.

Will the Minister comment on what the EU now sees as its own negotiating stance? In this context the EU is not an alien body—we are part of it. Pascal Lamy speaks, or at least claims to speak, for the UK, and we therefore have a responsibility to insist that he begins to speak for an agenda that we are prepared to accept—which is not the one at Cancun. We also need to reexamine Pascal Lamy's negotiating tactics at Cancun. Everything was taken to the brink in a way that seemingly guaranteed the destruction of the negotiating round.

I want to put a number of specific points to the Minister. We in the EU must now get away from our opaque European process. The Minister is entitled to come back to parliamentarians and say, "Where was the interest about this in Parliament before Cancun?" That is a fair comment, which we in Parliament must take on board; we are responsible, too. However, the EU process is very opaque. MPs did not think that there was consultation in that negotiating round, not simply at Cancun where my hon. Friends were excluded even from the briefings, but in the run-up to the establishment of that negotiating position. We must insist that the EU's negotiating position is transparent so that Parliaments such as ours can examine and debate it; that would also help to move the agenda forward.

Within the WTO process, there is a demand from the developing countries for an end to the small-club nature of the WTO, where the big blocs get together in mini-ministerials and pre-cook the agenda. That was one of the problems at Cancun. The agenda was produced like a rabbit from the chairman's hat, but it was an extremely unacceptable rabbit. We can longer have that process. There must be transparency in negotiations, so that all parts of the world are treated as equals. Returning to what I said before, the interests of 25,000 US farmers cannot be seen as more important than the interests of millions of African farmers and the people who depend on them. There must be a more open approach to the process leading up to full negotiation rounds.

Overall, I share some, if not all, of the views of my hon. Friend the Member for Luton, North (Mr. Hopkins), who said that we must examine the basis of what the WTO is trying to achieve. Free trade in itself is not an absolute good. Trade liberalisation is often a beneficial direction, but not always the point at which we should arrive in the short term.

During the summer, I spent some time in central America, and I was made very conscious, as I have been for many years, of the marginality of the maize farmers in a place that depends on that crop. Those farmers can never compete with north American grain farmers even with time and technology, because the great plains of north America will always be able to out-compete in technological terms the capacity of the difficult agriculture of central American countries. We must recognise that to force unfair competition on to the marginal producers of the world is not about free trade, but about the destruction of the economic base and the livelihoods and lives of the poor of this planet.

My hon. Friend is right: we have to rethink the politics of the WTO and consider how far we are prepared to push the trade liberalisation agenda. However, I am not opposed to liberalising processes. It is in the interests of the poor of this world to gain access to markets such as the EU and those in north America. That is where we should liberalise. We should first take the mote out of our own eye before we become overly concerned with difficulties elsewhere. That is the rethink of politics that we need.

Members have today rightly urged the Minister to recognise the importance of the new power groupings and the welcome creation of the G20, which is a group prepared to battle on behalf of the people whose voice has not been heard in the past. However, that cannot be allowed to happen at the expense of countries that are not members of either the rich or the G20. There are many more marginal countries around the world whose voice was not even a faint whisper at Cancun. The United Kingdom should now be prepared to espouse their view and echo their voice.

I conclude by saying that what happened at Cancun was regrettable, but not as regrettable as a bad trade deal that could have been disastrous for many people in the world. The challenge for the British Parliament and Government is to develop a negotiating framework that the EU, negotiating on our behalf, will pick up. It must be both fair and seen to be fair to the people of this country, the EU and, in the end, the whole world. That is a major challenge.

4.23 pm

Jeremy Corbyn (Islington, North)

I join others in welcoming today's debate and the diligence and industry of the International Development Committee. The minutes of evidence provide an interesting textbook of attitudes towards third world issues, trade and social justice around the world, and I hope that it gets a wider circulation than it has had so far. It is a phenomenal piece of research work, and I pay tribute to the Committee for the huge range of specialist witnesses that it invited to give oral evidence and from whom it received written evidence. I do not agree with some of its recommendations, and I shall come to them later.

The run-up to the Cancun summit led to an almost unprecedented amount of public debate throughout the world about trade justice issues, and the enormous work put in by the trade justice lobby had an effect. Over the years, we have seen dozens of different groups trying to lobby Parliament, but seldom has there been a group that was so effective in raising consciences in such a short time. The trade justice lobby, along with all the aid organisations and churches and mosques in this country, had face-to-face lobbying with 550 MPs over three days. In other words, only 100 MPs escaped being lobbied during that time. That must be the highest hit rate ever. It is a real tribute to those who organised the lobbying. It was certainly effective and helped to inform and improve the debate here.

In common with others, I had a good discussion with a local trade justice organisation for an hour and a half at a local church in my constituency. I have known for years many of the people who attended. They have put huge efforts into trade and social justice. Two matters came out of that meeting, one of which was the phenomenal level of knowledge that exists among members of the organisations undertaking such campaigning and their deep sense of helplessness and frustration, because they, who live in a wealthy western European country, want to improve the lot of African, Latin American and central American farmers such as those my hon. Friend the Member for Manchester, Central (Tony Lloyd) was talking about. They cannot take action because we are locked into a trade system in which supermarkets buy, supermarkets sell and trade rules inhibit the ability of poorer farmers to achieve very much.

We must challenge strongly both United States and European policies, the most pressing of which is the dumping of food, especially by the US. I was astounded to learn that 1 million people there are employed in the surplus food production industry, the surplus food packaging industry and the surplus food export industry, to dump so-called food aid on central American and African countries to destroy their agriculture altogether.

BBC 4 produced a fascinating programme—broadcast at 3 am, a time when such programmes are often shown, so it was seen by a massive audience. It presented an interesting debate between Ministers from Zambia and officials from the United States Agency for International Development. The USAID officials said, "We're helping you people—we're giving you all this food," to which the Ministers replied, "No, you're not—you're destroying our very agricultural base, destroying our rural communities and directly contributing to the development of shanty towns around Lusaka and other places." We must get real about such matters. For all their talk of free market capitalism, in reality the Bush Administration—and the Clinton Administration before them—were heavily subsidising farmers to overproduce and destroy agricultural economies throughout the world.

The European Union's subsidy policy is massive. I do not have a problem with supporting farmers internally in a country for an internal market, but I have a problem with the huge level of subsidy that we place on exports of heavily subsidised EU food that has a similar effect on countries, economies and markets in the third world. Those who strongly support world free trade and trade liberalisation must contend with the environmental impact of such issues.

Sadly, my hon. Friend the Member for Putney (Mr. Colman) is not with us at present, but he spoke earlier about the farmers in Kenya who grow green beans. Good. I hope that they do well and that their families and the local communities are prospering—but where are those green beans being sold and who is eating them? Is it malnourished children living in shanty towns around Nairobi, or Somali refugees living in camps on the borders of Somalia, or are the beans being airfreighted to Waitrose in this country or to Carrefour or elsewhere in western Europe? At what environmental cost is that happening? What damage is being caused to our environment, and perhaps to the environment in Kenya, because we are insisting that Kenyan development must be tied in to the consumer needs of western Europe? We must consider the environmental price to be paid.

Mr. Hopkins

I should be interested to know how much of the final selling price is received by the farmers. I suspect that it is very little.

Jeremy Corbyn

My hon. Friend is on to an important point. One could say that about many of the instant crop solutions, such as the production in Colombia of vast numbers of flowers for sale in New York and western Europe. There are plenty of other examples.

If we are serious about environmental protection, we must consider the damage that is done by transporting goods over large distances. It is possible that transport costs are actually too low, particularly for airfreight, which has a huge environmental impact.

I was not sorry when the Cancun summit broke down, because the alternative to its breaking down would have been a very bad agreement. A bad agreement was avoided in favour of no agreement, and no agreement is better than a bad one. But why did the summit break down? Was it because of the moral bankruptcy of the arguments that were offered by the United States and, to some extent, western Europe, or because the southern producer countries have come together in a unity that is almost unprecedented since the end of the cold war? Brazil, India and China are linked together, and many other countries are behind them. That meant that the Singapore issues were, essentially, dropped completely, and the food market issues were not agreed on or addressed.

There will now be another meeting and lots of quiet talking in Geneva in December, but my thought is that absolutely nothing will happen until after the US presidential elections next year. Many expensive trips will be taken by many officials around the world to ensure that nothing happens until after November 2004. I wish that our colleagues who go to these conferences—I welcome the fact they go, and I am just sorry that I have not been selected—would bring back a video of what actually happens. From the hon. Member for Banbury (Tony Baldry) we had the spectacle of officials scurrying off to their bedrooms and hiding for three or four days in order to avoid talking about cotton—one hopes that there were cotton sheets on their beds.

What happens, in the negotiations with the parallel parliamentary group and the Ministers, to the feeling of large numbers of people around the world that something ought to happen? One tries to follow the news but gets a series of conflicting statements that do not add up to any kind of report. Then, instantly, the whole thing collapses because somebody did not agree with somebody else. I appreciate that it is probably very difficult to follow everything that is happening, but some sense of the power of persuasion would be very useful.

Recommendation 12 in the Select Committee's report is very interesting. It says: We urge the Government to continue in its efforts both to promote rules and instruments such as strategic or Special Products and the Special Safeguard Mechanism … to enable developing countries to safeguard their food security needs …particularly whilst the North stalls on agricultural liberalisation". That is a helpful and important recommendation. The Select Committee is saying that producer countries have a right to protect their own food production, despite pressure from much more powerful and much richer northern countries.

Mr. Simon Thomas

Does the hon. Gentleman agree that, although the recommendation does not address the issue, in the face of what is happening in the World Trade Organisation on genetically modified crops, it must surely mean that developing countries have the right to reject the GM crops that are promoted by the US Government and also the dumping of GM food in their countries?

Jeremy Corbyn

Absolutely. Earlier, I discussed the views of the Zambian Agriculture Ministers. One big issue of dispute between Zambia and the United States was the dumping of large quantities of GM soya products and other GM products, and the dangers of cross-fertilisation. I believe that we in this country may find out about the dangers of cross-fertilisation of GM crops on non-GM farmlands. I absolutely endorse the hon. Gentleman's comment.

Recommendation 18 deals with flexible market share in world trade. It is good that the Committee draws attention to the reality that, in countries such as Kenya and India, where some half a billion people live on less than a dollar a day", they have little access to any kind of market to buy, sell or do anything else. Countries need to be allowed to maintain their own internal development.

The other important recommendation is recommendation 22, which acknowledges that the Singapore issues have been dropped altogether. I hope that we will not return to them, as they are about saying that any international company can invest as much as it likes in a southern country and return as much of the profits as it likes, and that it must be protected from any threat of public ownership by a national Government. As my hon. Friend the Member for Luton, North (Mr. Hopkins) pointed out, such companies often enjoy immunity from labour and pollution laws. What was the Singapore round doing other than to say that it was okay for international companies to behave in that way but that we would not tolerate such behaviour and environmental degradation in our own countries?

In recommendation 38, the Secretary of State says that the Government will not accept any proposals we believe will damage the prospects of developing countries trading themselves out of poverty. Fine, that sounds very good, but it is not up to the United Kingdom Government to decide a development model for every country. Countries must have the right and the freedom to decide that for themselves. I hope that the Secretary of State thinks through the implications of her statement, which I agree with. I hope that it is followed through and that we do not return to the Singapore round and the issue of the return of profits.

The injustice of the matter is underlined by the way in which the EU sugar regime operates, for example. The EU is a massive producer of sugar, which is an exhaustive crop in western Europe: beet sugar requires high levels of fertiliser and pesticides to keep it going, and it is very expensive to process, yet we are now exporting 40 per cent. of the world's sugar and subsidising it to the tune of €500 per tonne. That is not justifiable in any moral or other sense. We are driving cane sugar producers in Africa and elsewhere out of business so that European sugar can be dumped on their markets. lf, for example, we are talking about developing an African market, why are we dumping our sugar on Nigeria and Algeria when there should be African sugar available for those markets? That would be fairly logical.

ActionAid has its offices in my constituency, and I have a lot of time and respect for it. In its summary of the evidence that it submitted to the Select Committee, it states: Clearly the priorities of developing countries and the world's poorest people continue to be marginalised compared to the interests of the developed world. WTO members—particularly in the developed world—must act to ensure that Doha"— that was the Doha round— becomes a genuine development agenda. I do not think that Doha or Cancun produced such an agenda, but the growing debate around the world and the collapse of Cancun might lead to some rethinking and a greater sense of justice in future. We have an important role to play in the issue and the Select Committee report has given us a good start, with a great deal of information that will give impetus to the debate.

4.38 pm

Tom Brake (Carshalton and Wallington)

Like many other hon. Members, I would like to start by welcoming the report and saying how much I look forward to the post-Cancun report. I regret that 1 was not at Cancun, as many others here seem to have been. My brief at the time was transport, so I was probably reviewing a bus or a train service.

Members of all parties have ma de many thoughtful and intelligent contributions to the debate. [Interruption.] It seems I will have to bring my remarks to a conclusion.

4.39 pm

Sitting suspended for Divisions in the House.

5.6 pm

On resuming—

Tom Brake

I hope to make a little more progress. I am sorry to disappoint hon. Members, but I have not in fact concluded my remarks.

Before the Divisions, I was commenting on the thoughtful and intelligent contributions from hon. Members of all parties during the debate. Many made the same points, which should hell) the Government in their negotiations.

The failure of the talks at Cancun is unlikely to serve the long-term interests of any country. It could do significant damage if the result is a series of bilaterals. The excellent report and what happened at Cancun highlight the need for several things to happen, the most notable of which is reform of the World Trade Organisation, and of the European Commission, and specifically of how they negotiate and operate. Reform of the UN may be needed, too, and, as many hon. Members have said, EU and US agricultural subsidies need to be cut.

I want to raise a couple of associated issues that are not immediately linked to Cancun but have an impact on the relationship between the UK and developing countries, which has been soured as a result of Cancun. On reform of the WTO, hon. Members will be aware that a number of key deadlines have been missed on issues that would make trade fairer for the poorer countries. That must be tackled if the WTO is to have any credibility. A lighter agenda and more generous timetabling would help. It would restore some credibility to the process if things started to be delivered—not necessarily on the scale that was talked about—and if certain milestones and agreements were reached.

Various reports suggested that the process could be delayed and the deadlines missed by at least two years. Does the Minister agree with that, and if so, what are the Government and other partners doing to try to pull back those deadlines?

The WTO's text did not reflect or take note of the developing countries' concerns about the inclusion of new issues. Does the Minister agree with the World Development Movement's statement that the only position set out at Cancun was that of the US and the EU? Nothing else was reflected. I wonder how the Government react to that, given that the Secretary of State for Trade and Industry had clearly stated that they would not accept any proposal that they believed would damage developing countries' prospects?

I am sure that the Minister wants the WTO to be more democratic. In a DTI document leaked to one of the newspapers, the need for root and branch reform of the WTO was discussed. How does he envisage such reform? Does he agree with Pascal Lamy, the EU Trade Commissioner, who said of the WTO: There is no way to structure and steer discussions amongst 146 members in a manner conducive to consensus. The decision-making needs to be revamped"? If so, what organisational changes does he think would be appropriate?

Moving on to the way in which the European Commission negotiates and operates, the hon. Member for Putney (Mr. Colman) referred to the letter in today's Financial Times, in which Jean-Pierre Lehmann writes that Pascal Lamy should spend less time giving speeches and more time listening. He questions whether Mr. Lamy, who has said that the EU is flexible, has demonstrated in any way that that is so, particularly in relation to the Singapore issues, to which many hon. Members have referred.

Christian Aid, in its submission to the International Development Committee, said: the UK Government seemed to have a limited knowledge of what the European Commission was actually doing in the negotiations…The extremely weak lines of accountability between the EC and member states during Cancun posed a number of questions about democracy and accountability. Does the Minister agree with that statement? If he does, what action can the UK Government take to try to influence the Commission in future negotiations, so that the UK's point of view is expressed more forcefully and more representatively, and so that more information comes back during the negotiations? That would stop things being sprung on the Government, as they were in Cancun. The newspapers say that the UK was kept in the dark about the negotiations.

On the European Commission, does the Minister agree that Mr. Lamy made a tactical misjudgment in Cancun by making concessions too late, and is making another by pressing for the remaining Singapore issues to be kept on the agenda?

On reform of the UN—I mention this as an aside—I am sure that the Minister will have seen the proposal from the UN in today's Financial Times that there should be a UN forum for global dialogue on tax matters. Cancun has clearly fallen apart, and it is very unlikely that we shall soon discuss a UN commission to consider global tax matters, but has he had time to ponder that? Would that be the logical outcome of full trade liberalisation?

Many other hon. Members have referred to the issue of US and EU agricultural subsidies, and I do not need to dwell on that in detail. It could bring credibility back to the discussions if there were fixed timetables during which such issues could be addressed. Developing countries want developed countries to demonstrate credibility on the subject.

I understand that the Government intend to use the UK presidency in 2005, of both the G8 and the European Union, to kick-start trade talks. I wonder whether it is too early to ask the Minister to set out what that kick-start will look like, and how the process will happen.

I want to refer to two issues that are not directly linked to Cancun but have a bearing on our relationship with developing countries. There is the problem in the Democratic Republic of Congo. The Minister will no doubt be aware that a report has been published today by the UN experts panel on the activities of various UK companies and UK individuals in the Democratic Republic of Congo. According to the report, a number of UK companies have some serious questions to answer about their activities there.

If developing countries do not see the UK Government and others taking some responsibility for overseeing what their nationals and companies are doing in a developing country, they will have significant doubts about whether they are keen on trade liberalisation and opening up their countries to further foreign investment. Perhaps the Minister will comment on that and its relevance to the debate.

The final issue that has a bearing on today's debate is that of aid. In the absence of fairer trade and the boost that that can give to developing countries, we have to be more aware of aid and its significance. I wonder whether the Minister is in a position to confirm reports suggesting that, because of the funds required for reconstruction in Iraq, the aid programme set aside for middle-income countries such as Bolivia, Bosnia and Peru is being stopped or postponed. If so, what assessment has been made of the impact on those countries and on the programmes that the aid would have supported?

The Government must, as a priority, push the EU to move quickly to make serious efforts to restart meaningful negotiations. Many hon. Members have touched on the areas with which those negotiations should deal, particularly in relation to production and export subsidies in agriculture, to cotton, and to barriers to trade in manufacturing. There is a certain amount of urgency, given that by 31 December the so-called peace clause will lapse, and at that point the whole world trade system could collapse into a lengthy and damaging series of disputes.

As a matter of general principle, a multilateral system of rules-based trade is much better than a free-for-all that will penalise weaker countries in particular. The main negotiating powers—notably the EU—should approach a new stage of negotiations on a basis of consensus and consultation, rather than confrontation. There were no winners at Cancun, and there will only be losers if constructive talks are not resumed as soon as possible.

5.18 pm

Mr. Andrew Rotathan (Blaby)

I am sure that my hon. Friend the Member for Banbury (Tony Baldry) will agree that this has been a somewhat calmer afternoon than yesterday, perhaps without the excitement of the white-knuckle ride. It is also true, sadly, that today's debate will not receive the column inches that yesterday's events did. Not only is the issue important, but we have heard some interesting, sensible speeches today from all the way around the Chamber.

I particularly welcome this debate because I spent five years on the International Development Committee. We published a report back in 1999 or 2000 on the World Trade Organisation after Seattle. People will remember Seattle. This report is excellent, although it is a pity that Cancun was not discussed a little earlier, and has not been discussed on the Floor of the House.

The hon. Member for Putney (Mr. Colman) referred to the report's being used by other people outside the United Kingdom, and the hon. Member for Islington, North (Jeremy Corbyn), too, commented on its excellence. I was struck by the excellence of the earlier reports produced by the International Development Committee when I served on it—I am not saying that because I had any tiny part in it, although I did—and I recommend them to those who are interested in any of the subjects.

I congratulate in particular my hon. Friend the Member for Banbury, the Chairman of the Committee, on his sensible speech. One always congratulates one's hon. Friends, but his speech was very comprehensive. Although people sometimes say this but do not mean it, I do mean it when I say that I shall read it again. It brought out an enormous number of sensible points.

Following the debacle at Cancun, we need to look forward, as has already been said, and try to avoid making again the mistakes of which the report warned. The officials at the European Trade Commission have a perspective based on finance, and although that is entirely fair, their mindset when they go to negotiations is focused on winning those negotiations. Commissioner Fischler reportedly said to the developing countries: You have to decide what you prefer: a successful round, or that you press us to give up export subsidies". That reveals an extremely worrying attitude from one of Europe's key representatives.

In organisational terms, given that Pascal Lamy was representing the EU, it seems strange that we needed three Secretaries of State, a Minister of State, 32 civil servants and five advisers there. I am not criticising that, but it seems a little top-heavy, as we received no return. Further, my hon. Friend the Member for Banbury rightly drew attention to the pressure that Commissioner Lamy was under, attempting to keep all delegations from the EU informed. One wonders whether that time might have been better spent in getting on with negotiating.

I turn to the large topic of the common agricultural policy. I should perhaps declare an interest, because I am a farmer and I receive subsidies from the EU, although they are not all that large. I think that it is complete nonsense, and I should be very happy to give them up. I shall return to that later. We need more progress. It is not good enough to say that the CAP has been reformed, because we all know that that has not worked nearly well enough. The so-called green box subsidies—domestic agricultural support measures—in the US and especially in the EU, and the CAP, which we can influence, are classified as minimally trade distorting, but will continue to distort production and trade. I understand that green box subsidies are growing. Rural development payments may be less distorting than price support or direct payments, but they still enable farmers to be protected from market forces at the expense of farmers in developing countries.

As the hon. Member for Luton, North (Mr. Hopkins) said, there may be good cases for that, but they need to be examined. Yes, there has been progress on CAP reform but we have noticed that our European partners sometimes take a different view. I had not heard before the story told by the hon. Member for Glasgow, Maryhill (Ann McKechin), and I was quite shocked by what she said about the French and Italian Ministers and Mr. Daul. It is a worrying state of affairs if people who are representing us, in the form of the EU Commissioner, and people with whom we are in negotiation, can come out with such startling comments.

It is worth recollecting the figure mentioned earlier in the debate: the gross national product per head in Ethiopia is $100 a year, compared with the $600 a year subsidy that every European cow receives. That situation cannot be maintained. We are either serious about these negotiations, in which case we must take serious action on the CAP, or we are not. If the Government and the EU are serious about this trade round, we must surely start setting timetables and targets to eliminate those domestic subsidies. We need a substantial shift on the CAP, not merely the tinkering rhetoric that we have had since I got into Parliament in 1992.

Does the hon. Member for Luton, North think that the CAP is reformable? I am afraid I am not allowed to say that it is Conservative party policy, but personally I do not think that the CAP is reformable. I am sure that the Minister will comment on reform of the CAP. It is not his responsibility. and I am not blaming him for it, but I do not think that it has been anything like it should have been.

Will the Minister confirm the Government's commitment to tackling the issue, by working to remove distorting subsidies from our trade blocs, rather than entering into any further bilateral agreements? That issue was raised by the hon. Member for Islington, North.

Mr. David Drew (Stroud)

I apologise for not being here for the rest of the debate, but some of us have been in Committee.

I am sure that this has come up, but although we can blame the EU—and I am fundamentally opposed to the CAP—the fact is that until the Americans deal with their agricultural subsidies, which are far greater than the European ones, there is no hope of real change.

Mr. Robathan

I agree, and I am glad that the hon. Gentleman raised the point. The difference between America and the EU is that we are a member of the EU and have some authority and influence on EU negotiations. At least, we hope that we do.

I will not speak on cotton, as that has already been dealt with, but let us consider the fact that Ghanaian cocoa attracts a duty of 6 per cent. if imported into the EU. One might say that such a percentage is not too awful, but when it comes to value-added processed cocoa—the hon. Member for Luton, North has mentioned the value-added aspect—coming through as chocolate, it attracts 60 per cent. duty. That is specifically designed to stop burgeoning industries in developing countries.

According to the International Development Committee's report, a combination of high EU …tariffs, and export subsidies …ensures that despite EU sugar costing nearly three times as much as its Brazilian, Colombian or Zambian competitors, the EU maintains a 40 per cent. share in the world export market. I understand that it costs $280 on average to produce a tonne of sugar in Brazil, Colombia or Zambia, but $660 per tonne in the EU. Will the Minister consider that, and come back to it when he sums up?

The Singapore issues have been mentioned frequently. I am sure we agree that tackling restrictive business practices is important. However, it is also true that developing countries lack the necessary experience. As the report rightly states, they require funding such as that which we propose through the advocacy fund. I know that the Minister will attack the advocacy fund, and say that the Government already produce trade capacity building measures. However, rather than making a partisan issue of it, he might look at the advocacy fund seriously.

Most of what has been said covered the points I wished to cover. However, will the Minister clarify the Government position on the Singapore issues? Are Commissioner Lamy's comments on the issues, mentioned earlier in the debate, an accurate representation of the Government's position? Either Baroness Amos was right to say in paragraph 96 of the report that Singapore issues were not a priority, or Pascal Lamy was right to say that they are. Which is the case?

The Government, and the EU, have been saying the right things about Doha. From the speeches we have heard I think that we all—or almost all—want to see fair trade. In my opinion, trade that is free and fair is the best way forward. We have to be judged by our actions at EU level, in America, and in the British Government. The $2 a day subsidy for European cows that we have heard about must be dealt with, so that it helps the poor. I urge the Government to take the lead in Europe, and ensure that incidents such as the one illustrated by the hon. Member for Glasgow. Maryhill are not repeated.

I had lunch with the Indian high commissioner. India is fascinating, because it was a very poor country and, as the Minister knows, is our biggest recipient of aid. However, it is developing rapidly. The high commissioner said that he wanted free trade, to let the private sector get on with it, and to get Governments out of interfering with industry and business and trade issues. I hope that this is not a partisan issue. We Conservatives say that we want free and fair trade, and we believe it. We need trade liberalisation to proceed with an agreement on Doha. We need proper reform of the CAP, and the USA to change its policy on farm subsidies. The peace clause will expire at the end of December and, as the hon. Member for Putney said—I do not always quote Labour Members when I finish a speech—we must not fail the poor again. It is the responsibility of the Government and of everyone in this country to ensure that we do not.

5.30 pm

The Parliamentary Under-Secretary of State for International Development (Mr. Gareth Thomas)

I agree with the hon. Member for Blaby (Mr. Robathan) that this has been an excellent debate. Many powerful contributions have been made from both sides of the House. I welcome the Select Committee's report, published as a result of the work carried out in the run-up to Cancun, and the fact that the Committee will reconvene to examine future directions, post-Cancun.

I agree with my hon. Friend the Member for Islington, North (Jeremy Corbyn), that the huge lobbying effort made by the trade justice movement deserves our appreciation and respect. I also agree with the hon. Member for Blaby that it was helpful for there to be a number of parliamentarians in Cancun. I would have no objection to parliamentarians playing an enhanced role in such processes. It is good that the Inter-Parliamentary Union is taking such an interest in WTO matters.

The Select Committee's deliberations have provided, in addition to the opportunity for scrutiny of the Government's position, an important platform for the representatives of developing nations. I was struck by the fact that the Committee was able to interview the Prime Minister of Ethiopia, to get his view on the process in the run-up to Cancun. It also had the opportunity to talk to representatives of international financial institutions and key negotiators. It was successful in securing several sessions with Commissioner Lamy, who led the EU's negotiating team.

However, perhaps the most important aspect of the Committee's work was the opportunity that it provided for a range of NGOs to set out their critique of the current WTO rules. In doing that, it helped to build a wider interest in development issues and the global battle for poverty reduction. I say to the members of the Select Committee that we read their first report on this process with interest, and responded to it in detail, and we look forward to their next report.

One particular piece of analysis to which the Committee drew attention in the report—I believe that it was in a submission from Oxfam—and which bears repeating, is the fact that if Africa, east Asia, south Asia and Latin America were each to increase their share of world exports by 1 per cent., the resulting gains in income could lift 128 million people out of poverty. That is a dramatic example of the potential prize for the international community, if we can secure progress on getting fair trade rules.

In that context, the UK Government, Ministers from the Department for International Development and the Department of Trade and Industry, and the whole negotiating team were profoundly disappointed by the failure of the Cancun ministerial conference to reach the sort of agreement that hon. Members have expressed the desire to see. That failure will inevitably affect the poorest countries most, delaying the opportunity for economic growth and the increased prosperity that fairer trade rules will bring.

I reassure all hon. Members who raised this that we remain committed to getting meaningful multilateral negotiations back on track. I strongly share the view outlined in the report and restated by the hon. Member for Banbury (Tony Baldry) and by my hon. Friend the Member for Manchester, Central (Tony Lloyd) that those who cheered the lack of agreement at Cancun were entirely wrong in their analysis and that we must redouble our efforts to achieve progress. Hon. Members will understand that I do not want to get into a blame game and to consider in depth why we could not reach agreement and whether we should blame particular negotiators for that. We must concentrate on the need to ensure that senior officials in Geneva are mandated to take the tough decisions and to make the compromises needed to break the impasse when they meet on 15 December.

Our priorities for the round remain securing agreement on the issues that matter most to developing countries: agriculture, non-agricultural market access and special and differential treatment to help poorer countries to adjust to more open markets. I shall come to the new issues in a moment.

There was a deal to be done at Cancun, and I still believe that there is a deal to be done to benefit developing nations, but compromises will clearly be needed on all sides. It is apparent from the many conversations that have taken place with Ministers from other countries that some central players were willing to engage further. The comments of the WTO's director-general, Dr. Supachai Panitchpakdi, bear repeating: We seemed to be making progress. We were very, very close to a final agreement".

Many developing countries and many of the least developed countries recognise the lost opportunity of Cancun. The hon. Member for Blaby referred to India, and it is worth repeating that the leader of the Indian negotiating team, the Indian Trade Minister, Arun Jaitley, has said that they are keen to return to the negotiating table soon. That is extremely important.

As my hon. Friend the Member for Manchester, Central said, one of the real gains that we saw at Cancun was the emergence of a much stronger voice for the developing countries, not just from the group of 21, but, importantly, from the new alliance for Cancun of least developed countries, the African, Caribbean and Pacific countries and the African Union countries. They have certainly been marginalised in previous WTO rounds. We must continue to engage with them to understand their positions better, and I am sure that the parliamentarians who were at Cancun can bear testimony to the number of meetings that, for example, the former Secretary of State for International Development undertook in order to do so.

We need to explore in more detail the scope for further compromise and agreement and we will continue to do so. We must continue to prioritise the issue of developing countries' capacity to take part in the negotiations and to benefit from the opportunities that fairer trade will give them. We remain strongly committed to continuing a major investment in exactly that. To that end, my Department has already committed more than £160 million to trade-related capacity building. That helps developing countries to recognise and exploit the opportunities from fairer trade, but is also about helping developing countries to increase their ability to negotiate in the WTO round.

I say gently to the hon. Member for Blaby, who referred to the Conservatives' proposal, that it would have been helpful if, before launching their initiative and putting so much rhetorical time into it, they had examined the series of ways in which the Government facilitate the opportunity for developing countries to boost their negotiating capacity. The issue is not about helping someone else to do the job of negotiating for developing countries; it is about helping developing countries to develop their own negotiating capacities. Some &160 million of support to that end and the wider end of allowing people to benefit from the opportunities of fair trade is powerful testimony to the Government's support for the process.

The Opposition could also have examined the White Paper on eliminating world poverty, in which we said that we would allocate £45 million by 2004 for those purposes, but we have gone considerably beyond that. I hope that they will recognise that in future.

The hon. Member for Banbury made a strong statement on the importance of multilateral negotiations and institutions such as the WTO. The hon. Member for Carshalton and Wallington (Tom Brake) also asked about the importance of continuing multilateral negotiations. We remain strongly committed to a rules-based multilateral trading system, which is important to both developing and developed countries. It is interesting to note that two countries that acceded to the WTO organisation at Cancun, Nepal and Cambodia, are both least developed countries, which will boost the block of least developed countries from 30 to 32. That is an interesting statement by those developing countries of the importance that they attach to the WTO process. Regional and bilateral arrangements can be a useful stepping stone on the route to multilateral liberalisation, but they are not a substitute for multilateral negotiations from which developing countries definitely stand to gain the most.

My hon. Friends the Members for Glasgow, Maryhill (Ann McKechin) and for Manchester, Central and the hon. Member for Ceredigion (Mr. Thomas) raised the question of the Government's stance on the new issues. Before Cancun, we made it clear that the new issues are not a development priority for us and that we must take into account the concerns of developing countries. Nevertheless, we are part of the European Union and we must recognise and support the EU negotiating position. The European Commission was well aware of our view about the new issues, and as all hon. Members will know, it offered to drop investment and competition completely on the final day of the negotiations.

Tony Lloyd

We are strengthened by negotiation through the European Union, but only if the EU's negotiating mandate suits the member states. In this case, it is clear that Pascal Lamy's negotiating did not suit Britain and many other states. Will the Minister reflect on how we can properly take back what we might describe as democratic control of the Commission?

Mr. Thomas

The Secretary of State for Trade and Industry has made it clear in the House that we believe that the EU's negotiating position should start from that point. We should not go back to where we were pre-Cancun, which reflects the concerns of hon. Members in this debate and more widely about the attitude of Commissioner Lamy.

Mr. Hopkins

My hon. Friend keeps saying what should happen, which is all wonderful, but things change only when someone takes action and forces things to happen.

Mr. Thomas

I go part of the way with my hon. Friend. There is always a need for leadership. Britain has played a role in various European Union and European Commission forums to restate our position on how we should move forward. Our view remains that we should start from the concessions that were made at Cancun to help us to move forward in the run-up to secure more detailed agreements, hopefully on 15 December.

My hon. Friend the Member for Glasgow, Maryhill gave an interesting resume of American concerns about the initiative on cotton. We have been anxious to support the cotton-producing west African nations. That initiative highlights the need for reform of other Organisation for Economic Co-operation and Development cotton producers' trade distorting subsidies. Although it is a relatively minor part of the problem, we are looking at further reforms to the EU cotton regime under discussion. We talked about building up the trade-related capacity. We have provided funding to the NGO that is working most closely with the four west African cotton countries to enable them to develop their negotiating position and to take that initiative forward.

On agriculture, we were at the forefront of the discussions that resulted in an historic CAP reform deal. Inevitably, any agreement on CAP reform is bounded by what is acceptable to others. That is, after all, the nature of negotiations.

Jeremy Corbyn

I assume that my hon. Friend will discuss the sugar issue at some point in his speech. I did not want him to move on to bananas without passing through sugar.

Mr. Thomas

If my hon. Friend will contain himself for just a little longer, I will come on to sugar. It is important to remember that the CAP reform agreement that we achieved in June led to a joint EU and American framework document on agriculture, which in turn provided for a first draft ministerial declaration presented at the start of the Cancun conference. Significant progress was made during discussions at Cancun, sufficient to enable the agricultural facilitator to produce a revised agriculture text.

I accept that it is regrettable that the focus then shifted to the Singapore issues. That revised text was never put to the test. It is perhaps a moot point whether an agreement on agriculture was close to being finalised. It is encouraging that a series of nations believe that an agreement was possible. It will be essential to re-engage on agriculture with developing country groups at an early stage to reassure them of our continued commitment to the Doha agenda and in order to secure agreement at the officials meeting on 15 December.

That CAP reform deal did not cover sugar—which is clearly of particular interest to my hon. Friend the Member for Islington, North—cotton, olive oil or tobacco. A further discussion document on sugar has been published by the Commission. It set out three options for reform: a series of cuts in price support, full liberalisation or the status quo. We believe that a strong case can be made to move towards full liberalisation for precisely the reasons alluded to by my hon. Friend. That has a series of implications for countries such as some of the African, Caribbean and Pacific countries, which have benefited from preferential access arrangements and which will clearly need support.

On cotton, the Commission has thus far proposed a 60 per cent. decoupling of subsidy. We will push in the UK for a greater percentage, with the option at least of 100 per cent. decoupling, which is consistent with the June agreement for other sectors. Olive oil, tobacco and hops are not major blockages to securing agreement, but we will be pushing for further reductions in subsidy in those areas.

Mr. Robathan

The Minister may think that this slightly beyond his remit, but given the money that we spend on trying to stop people smoking, is it not rather strange that taxpayers' money should be spent on subsidising the production of tobacco exports?

Mr. Thomas

As the hon. Gentleman will know, I have some sympathy with concerns about the range of smoking. He will recognise that we are moving forward on tobacco, and I hope that he will be content with the Government's position.

One important development in the run-up to Cancun that has been highlighted this afternoon is the deal on TRIPS and public health. That should give hope to all those who, like us, have been frustrated by the lack of progress in the broader Cancun round. It was a significant step forward and, as hon. Members know, it is not affected by the breakdown in negotiations at ministerial level. ht is a demonstration that, with political will, the WTO can reach agreement on difficult issues of real concern to developing countries.

The hon. Member for Carshalton and Wallington mentioned reform of the WTO. It is true that we should consider the particular issue of reform, as two of the last three ministerial gatherings have not produced the type of agreement that we would want. As such, we should consider how to make the organisation work better. We start from the position of wanting to see an effective and transparent World Trade Organisation. A priority must be to consider the organisation of ministerial conferences, but we must recognise that we a re dealing with an organisation that has to secure a consensus of 148 members. Many of the smaller members are strongly attached to the basic rule by which the organisation works of one member, one vote, and it ca. n be difficult to reach agreement in those circumstances.

We must also be careful not to raise the suggestion of reform to such an extent that it excludes work on the substance of the issues currently before the WTO. We need to look at how we can make WTO meetings more effective, but that must not be at the expense of making progress on the real substance of the discussions.

My hon. Friend the hon. Member for Putney (Mr. Colman) asked about sustainability impact assessments, which are now part of the EU's preparations for trade negotiations. However, as he said, we are still working out how the assessments will work, and we are happy to consider his points. The hon. Member for Banbury repeated the suggestion that we should go for a cap on the level of support in the green box. We do not share that view. We must recognise that different subsidies have different impacts on trade, and the green box allows countries to provide support to reinforce the multifunctional role of agriculture.

The hon. Member for Putney also asked about the mode 4 talks. As we were debating this afternoon, officials were attending a meeting today with Cardinal Rodriguez of Honduras to discuss those issues and the concerns of several member states.

Jeremy Corbyn

A number of us raised the issue of the dumping of GM foods on third-world countries. Is that part of the discussions with the recipient countries of food aid?

Mr. Thomas

I am grateful to the hon. Gentleman for reminding me about GMOs. The Americans have tabled a challenge to the EU position, but we believe that the is right to defend our position on GMOs. There must be a rules-based system through which we can decide those issues, and we think that our current position is effective and should be defended.

We need to recognise the successes achieved in the run-up to Cancun, especially the deal agreed on TRIPS and public health, the strong sense of a more powerful and effective voice from the developing world, and the fact that progress was made and the positions of the sides were closer after Cancun. Nevertheless we are right to be disappointed and frustrated at the lack of an agreement. That places a responsibility on all members of the WTO to secure progress at the officials meeting in Cancun.

The debate has been useful. I again take the opportunity to congratulate the Select Committee on its work, and renew the pledge to carefully reconsider the findings of its second report.

Question put and agreed to.

Adjourned accordingly at four minutes to Six o'clock.