Commodity Prices (Hansard, 19 September 2002)

§ Clare Short

There are no proposals for a statement on commodity prices at the World Summit on Sustainable Development in Johannesburg.

The prices of a number of internationally traded commodities have fallen dramatically in recent years. This has had an effect in producer countries at the household level (e.g. ability to purchase food and medicines) as well as at a higher, national, level (e.g. in terms of foreign exchange earnings, debt repayment ability etc.).

Many of the poorest countries, particularly in Africa, remain dependent on a narrow range of commodity exports. We are committed to helping commodity dependent exporting countries reduce their vulnerability to the effects of world commodity prices.

The UK, through its development programme and other endeavours at the international level, is supporting a range of actions that seek to expand the trade opportunities of these countries in order to reduce their dependence on primary agricultural commodity exports. Existing trade barriers (including tariff escalation) are a major impediment to this. The UK is not only working to secure reform of international trade rules in general but also to reduce the impact of protectionist regimes such as the Common Agricultural Policy.

There is scope for creating a more favourable domestic environment within commodity dependent countries themselves. This is necessary to generate the economic growth and other conditions that contribute to developing the means by which they can reduce their vulnerability to external shocks such as unfavourable price movements. The UK provides support to a variety of activities in this regard. These range from actions to enable local institutions to become more efficient and innovative, 417W through to securing improvements in the regulatory framework in order to facilitate the development of local enterprises and attract foreign investment.