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Mr. Alan Simpson (Nottingham, South) : I thank you for calling me, Mr. Deputy Speaker, and apologise for the fact that I have almost lost my voice. I am particularly grateful to have this opportunity to speak because I suspect that I may be one of the few hon. Members who will rise to speak against the GATT treaty. I wish to do so by setting out a different view of the world in which we live. I start from the perspective set out by John Maynard Keynes in the 1930s, when he looked at the world and said that the things that ought to be encouraged to move freely around the globe were ideas, hospitality, knowledge, travel and learning. In relation to trade, he considered that there were overwhelming arguments for a world perspective based on planned trade, where a premium was placed on producing locally and regionally in sustainable and acceptable forms. Yet, in contrast to that, we are now presented with a GATT treaty which sets out a different world view based on a different set of values. I shall sketch some of those differences.
GATT is based on some fairly important assumptions which are closer to ideology than to evidence. The assumptions are, first, that if we free trade, there will be a general increase in global prosperity and, secondly, that we will all somehow benefit from that growth in prosperity.
When I went back to the Organisation for Economic Co-operation and Development study in which the original figures in relation to the growth in prosperity were produced, I was struck by two things--the modesty of the figures and the vagueness of their sources. The study suggested that, over a 10-year period, there would be a growth in world output of approximately $19.5 billion per year. In the context of global gross domestic product that is not an awe-inspiring sum, but when I tried to look into the matter further, I realised that the evidence on which the claims were based was extremely sketchy. Perhaps the most forthright of the people who owned up to that was Professor Jagdish Bhagwati, economic adviser to the Director General of GATT, who said in relation to those estimates or guesstimates of the growth in world trade :
"Nobody really knows. I mean that's basically ballooning up estimates . . . I think the $200 million figure you keep hearing all the time, that relates to the extent of incremental trade, which, according to some models, we expect to get. But I have been in this game long enough to know that, you know, if--it's almost astrological to try and forecast specific numbers.".
Column 571If that is what the economic adviser to the Director General of GATT had to say, it seems to me that the evidence about which we are getting so excited is terribly thin.
The hon. Member for Gravesham (Mr. Arnold) pointed out that there would be 400,000 job gains for the United Kingdom. I would simply caution him to look at the claims made by President Bush in the early stages of the GATT negotiations--to the effect that the American economy would gain by $125 billion in the first year of the treaty alone.
Mr. Simpson : I suspect that the hon. Gentleman would have to settle for far fewer than that. As I was pointing out, last year the Economic Strategy Institute in the United States did a different calculation and suggested that the American economy could lose between $36 billion and $63 billion a year as a result of the signing of the GATT treaty. I would caution hon. Members to look carefully at the basis of any serious calculations that have gone into the underpinning of the consequences of the GATT treaty.
GATT has been sold to us on the basis of a misleading and weak study and of inadequate economic analysis. There are serious collisions built into the principles around which world trade is to be constructed. GATT models itself on three pillars of a free trade model ; it is based on the principles of non-discrimination, reciprocity and transparency of trade.
By contrast, I think that the House ought to be starting from the following set of questions. Does the agreement create jobs in Britain ? Will it improve equity both at home and internationally ? Will it create stability in our domestic and in the global environment and will it protect that global environment ? Is it, in effect, an agenda for sustainable economics ? In answer to those questions, my sad conclusion is that there is very little basis for saying that there would be job growth in the United Kingdom as a result of the signing of the GATT treaty.
I am clear, however, that there are other quite specific consequences of the signing of the treaty. It would clearly fit in with the Government's interest in what they glibly refer to as jobless growth. It can almost certainly be guaranteed to deliver a huge increase in the profits that are accruing to transnational companies.
GATT is a treaty for the powerful and the anti-democratic. An examination of the nature of world trade today clearly reveals where the huge interests that have supported the signing of the GATT treaty are. Last year, Oxfam carried out a study which concluded : "In reality, trade flows are dominated by powerful corporations located overwhelmingly in Western Europe, North America and Japan. In 1985, the combined sales of the world's largest transnational companies exceeded $3 trillion, equivalent to one third of the world's Gross Domestic Product".
However, it is not only a third of the world's GDP that the transnationals control. The studies by Oxfam and other organisations have shown that the major transnational companies control 70 per cent. of world trade. Almost all the primary commodities that are marketed are controlled by only six multi-commodity traders. In the agri-chemical industry, the 20 largest transnational companies control 94 per cent. of the market. In the telecommunications industry, the nine largest transnational companies control 89 per cent. The freedoms that the transnational companies
Column 572will receive under the treaty will be enormous. The treaty will extend and entrench their power to control prices, pursue the lowest wages, seek the fewest responsibilities and disregard the environmental damage that often goes with the power that they have accrued.
Where in Britain will the job impact be felt ? I cite an example from my constituency. I am privileged to have the Raleigh cycle company based in Nottingham. It is a very efficient company which I have visited many times with the management and the trade unions. The company has pointed out that it cannot compete with the Chinese bicycles being dumped in the United Kingdom. Its representatives have been invited to go to trade fairs in south-east Asia, and the Chinese say blatantly that it does not matter at what price Raleigh seeks to sell its product in China because they are concerned only about who controls the markets. Even where nations are not saying that, the same message is being sent to countries and continents by transnational corporations.
We are already witnessing a serious transfer of production as a result of the liberalisation of world trade. In America, there is ample evidence of a transfer of manufacturing industries from the industrial belt of mid- America to the free trade zones of Mexico. People are amazed that the goods produced in Mexico, which an attempt is being made to sell in the industrial belt of America, are not being bought by workers who lack the wages to pay for goods that they are no longer employed to produce. To highlight that point, I refer to a report issued last year by Professor Thurow of the Massachussetts Institute of Technology. He explained his attraction to free market but went on to say :
"Free markets . . . tend to produce levels of inequality that are politically incompatible with democratic government. Witness the rising inequality and homelessness in the United States, and note the need for large social welfare income-transfer payments systems in every major industrial country."
They are the consequences of the liberalisation of trade. They certainly go hand in hand with the accrual of increased profits to the multinational companies, but they do not generate jobs in one's domestic economy or create conditions of stability or equity in an international sense.
In the developing world, there are also enormous pressures that dislocate domestic economies. For example, there is pressure to opt for primary production. Over the past 20 years, the net effect has been that developing countries have increased their production of primary products. World commodity prices have since collapsed and the income from the sale of the goods has failed to cover the cost of the debts that they have acquired through borrowing to increase this production. Instead of becoming richer and freer, those developing nations have merely increased the debt burden around their necks, and a phenomenally high rate of profit has been delivered to transnational companies.
For the industrial world, there is a serious drain not only of manufacturing capacity, as my hon. Friend the Member for Alyn and Deeside (Mr. Jones) said, but of a new era of emerging technologies, jobs and services which--a fact that we have not yet understood--are going to the third world as part of the liberalised free trade regime.
It is now the custom of some accountancy firms in this country and in the United States to take on firms' accounts and ship them to Barbados to be processed by faceless women for less than $1 an hour. Does anyone know an accountant in this country who will work for less than $1
Column 573an hour ? If so, many hon. Members and others would bite his hand to find out the name of that accountant. No matter how efficient we become, we cannot compete at that rate of pay.
The same is happening in the data-processing industry. In the Philippines, qualified data processors are working for United Kingdom and American companies for £100 a month, with medical care and a ration of rice thrown in. Nor can we compete with the computer programming being done in the third world, either directly or indirectly, for United Kingdom companies such as National Westminster Bank, British Telecom, Procter and Gamble, and Abbey National plc. Such work is being done in Calcutta, Madras and New Delhi by highly qualified computer programmers for £1 an hour. Could any hon. Member find me a computer programmer in Britain, or anywhere else in the industrialised world, who could live on £1 an hour ? That movement of services will continue and will always mean greater profits for transnational companies. The trend is not to spread equity but to concentrate profitability.
At this point, I wish also to mention democracy and stability. Paragraph 4 of article XVI of the "Understanding on Rules and Procedures" states :
"Each Member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements."
In other words, nations' constitutions will have to be rewritten to conform to the GATT treaty. Whatever a nation's electoral mandate, if its laws and constitutions are at odds with the treaty, they will have to be changed.
I refer the House to a riot that took place in the Karnataka area of India, which was in opposition to the threats to the Indian Patents Act 1970. Under Indian law, it is illegal to patent any life form, but the new agreements relating to the trade in biotechnology patents enshrine the rights acquired by large multinational pharmaceutical companies to patent genetic products, allowing the inherited genetic diversity of the planet to be turned into a form of private property.
A number of other national and international practices will become similarly "GATT illegal". In Canada, the export of unprocessed salmon and herring has been ruled illegal. It was seen as an unreasonable restriction on trade. Equally likely to be defined as GATT illegal is any attempt by a nation to control the export of its own natural resources. In relation to the Muntingh proposal, the European Parliament set out terms in which it was attempting to control the import of unsustainably logged timber. Its proposals are to introduce by 1995 positive incentives which will reward the production of sustainably logged timber and by 2000 disincentives to obstruct the importation of unsustainably logged timber. All those processes will be GATT illegal.
The Montreal protocol, which is designed to reduce
chlorofluorocarbons emissions, has set out ways in which we are incrementally moving towards the banning of trade in products and by- products which generate CFCs, so that there is now a ban on the import of controlled substances from non-signatory countries to the Montreal protocol and a ban on the export of controlled substances to non-signatory countries. Both those bans will be GATT illegal.
Column 574Any challenge will be ruled on by the GATT disputes panel--the disputes settlement board. Is that to be a source of protection for national economies, conservation economics and international environment initiatives ? The answer is sadly no. To see why, we need only consider what has happened in the dispute that took place over tuna-dolphin catching--first between the United States and Mexico, Venezuela and Vanunu and, subsequently, between the United States and Europe and those three countries. The United States attempted to ban what was referred to as the encirclement method of catching tuna, a reckless method which needlessly, cruelly and irresponsibly took the lives of huge numbers of dolphins. There was an attempt to say that it was not acceptable for tuna to be caught in that way. The matter went to the disputes panel and, in 1991, the panel ruled that such a ban constituted an unreasonable restriction on trade. It is likely that such methods will be supported when the matter goes before the new panel. GATT is likely to blow an almighty hole in any global attempts to set down a serious commitment to challenge environmental exploitation and environmental degradation.
By failing to build an environmental dimension into this round of GATT, we run the risk of destroying most of the major initiatives that have been taken up in the process of dragging the world into facing up to the environmental damage that we have been causing. The World Trade Organisation will have powers to compel countries to adhere to free trade rules whether they destroy the environment or not, whether they exploit child labour or not. A body has been created which, in effect, comprises the new ayatollahs of free trade fundamentalism. It will have the power to dictate national policies and to deny people the choice of putting a planned future before a free-for-all present. GATT prevents countries from taking trade measures to protect the environment and natural resources beyond their national boundaries. GATT disallows import restrictions based on production processes, including the use of such things as milk-enhancing hormones, which can have a devastatingly destructive effect not only on the cattle to which they are fed but on the human beings who consequently consume them indirectly. GATT will accelerate the collision between free trade and a global environment. In fact, what we need is a treaty for sustainable growth and sustainable development. Four principles should underpin that treaty. We need policies under which the developing world can feed itself, house itself and build up its own infrastructures. We need a new form of environmental protectionism, which would pay for the development and gifting of environmental technologies. We need a treaty that would raise the standards of production to those of the best, rather than reduce them to the price of those who would exploit the most. We need a treaty which recognises that the next century will place a premium on reducing global transportation, which accounts for one eighth of the ozone- depleting gases currently being emitted. The treaty needs to eradicate toxic dumping, the majority of which now takes place as a transit process from the industrial north to the developing south and east. We need a treaty which delivers stable jobs and sensible wages. Sadly, none of those needs is met in the GATT treaty.
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Mr. Jeremy Corbyn (Islington, North) : It is a pleasure to follow my hon. Friend the Member for Nottingham, South (Mr. Simpson), who made an excellent speech. I especially agreed with the latter part of it and the conclusions that he drew. There seems to be an understanding that GATT is something that we should all welcome and that anyone who opposes it is somehow a heretic or an anti-Christ and therefore should not be allowed to enter the debate.
May I point out that it is yet another treaty that has been signed by the British Government of which there has been no parliamentary scrutiny whatever ? No vote was taken on that treaty, there are no means of amending it and a huge proportion of power has been handed over to the World Trade Organisation in the name of promoting the idea of a free market economy all round the world, with all the devastation that that will cause, for jobs in this country and for living standards in the poorest parts of the world. The weakness of the British parliamentary system is that there are no means whatever of stopping that being done. The treaty was signed, as every treaty is signed, within the powers of the royal prerogative and we are left with it. We call ourselves the mother of Parliaments and a model of democracy to everybody else around the world. We should stop lecturing the rest of the world and start trying to learn some lessons from them.
I do not join in any general welcome of the treaty. I have the deepest misgivings about the treaty and, indeed, about the GATT process. It has been presented--the Prime Minister did so in this Chamber--as though, somehow, everyone is a winner in GATT. It is rather like a game of bingo in which everybody comes out a winner. The only problem is that, in most gambling that I have ever understood, the bookmaker makes the money, not those putting money on the competition. If everyone is a winner, how come some are bigger winners than others ? It appears from what the Prime Minister said that the biggest winners will be western Europe and the United States of America. Proportionately, the people who will come out worst are those living in the poorest countries of the world.
The hand of the United States looms large in the GATT treaty and in the GATT negotiations. President Clinton said :
"We are on the verge of a historic victory in our efforts to open foreign markets to American products."
With typical United States arrogance, they assume that the American continent belongs to them. I do not know why they cannot say "United States products" and why the term "American products" is always used which, to my mind, includes those of Canada, Mexico, the whole of Latin America and the Caribbean.
However, around the world, considerable opposition to the GATT treaty is being mounted. My hon. Friend the Member for Nottingham, South mentioned the problems of a number of people in India. There have been huge demonstrations in many parts of India by Indian farmers who are opposed to the treaty because they can see the consequences for themselves--the consequences of poor countries having to import foods that they already grow, the consequences of their not being able to get their industrial products into western markets to the degree that they would want and the problems that they will have of
Column 576high levels of import penetration from multinational corporations. Those demonstrations were enormous, but were barely reported in this country.
The demonstration in southern Mexico, known as the Zapatista rising, was a direct consequence not only of GATT, but of the structure adjustment programme forced on Mexico by the World bank and the International Monetary Fund as their means of coping--that is the only way in which to describe it --with the problem of the Mexican debt. Those poor people understood what was on the agenda and what the consequences would be.
The hon. Member for Sutton and Cheam (Lady Olga Maitland) and other hon. Members mentioned what is currently happening in China. China has the fastest growing economy in the world. However, many people in China work in the worst possible conditions in the world and on the lowest possible wages. A plethora of industrial strikes are taking place in the economic zones and all over southern China at the present time. They are barely reported in the west.
The muted criticism of China's human rights record by the British and United States Governments and everyone else is axiomatic in that they are saying that trade comes first and their concern for human rights comes second. The Conservative Government could tell us plenty about that as they sold arms to South Africa during the worst years of apartheid oppression and they happily sold arms to Chile during General Pinochet's time. There are dozens more examples of such actions.
If we are serious about human rights abuses, we are serious about human rights abuses full stop, irrespective of the country concerned, or the economic or political system within which they operate. The failure to criticise China shows that we are interested more in the possibility of British companies making money out of investments in China than in doing something serious about the problem.
The treaty includes a major section on trade barriers and the lowering of import rates. Here we are seeing growing interference in the ability of the poorest countries in the poorest parts of the world to produce the goods they need for a system of self-sustaining agriculture.
After the long years to gain independence from this country, Zimbabwe embarked on a process of self-sufficiency in agriculture. The powers that be in Washington visited Zimbabwe and demanded to know why it had so much maize in stock. With great prudence, the Zimbabwean Government said that they wanted maize in stock as a hedge against the likelihood of drought, which occurs frequently in many parts of southern Africa. The Zimbabweans were told to get rid of that maize. When drought came along, Zimbabwe had to buy maize on the open market, some of which came from the United States. It is a policy of utter folly and madness to destroy the indigenous agricultural systems of so many poor countries.
Given the pressure of structural adjustment programmes on poor countries, instead of giving them support and assistance to develop self-sufficiency in agriculture, one expert after another steps off a plane from London, Washington or Frankfurt and says that the solution is to grow coffee. So many countries began to grow coffee that the world price of coffee fell. Many countries now face economic disaster and many people in the west are suffering from hypertension because of all the cheap coffee that they are drinking. That policy is not sensible.
The latest suggestion is to grow cut flowers. The number of countries that are now investing in growing cut
Column 577flowers is unbelievable. I did not know that there was such a market for cut flowers. The number of planes flying around the world, depleting the ozone layer, using up oil and causing noise and other problems, in order to bring cut flowers from Colombia, Zambia, Zimbabwe, Ethiopia, India and God knows where is extraordinary.
Mr. Corbyn : And of course from Kenya. I would not wish to leave Kenya out. Those planes are carrying cut flowers to the markets in Paris, London, Washington, New York and Tokyo. That policy is simply not sensible and there are plenty of similar examples.
I recall some years ago visiting a very poor area of Honduras in central America. Most of the people lived in what can only be described as shacks. They lived outside the cash economy and practised subsistence living. They grew a bit of maize, kept a few chickens and more or less got by somehow. If they had a good crop, they sold some of it to buy cooking utensils and the like. If they had a bad crop, they starved.
Beside those shacks where those very poor people lived there were huge fences and security guards protecting the fattest beef cattle in the world. Those cattle were being fattened up to be beef exports to pay for that country's debt and to bring in foreign exchange. What came first : the starvation of those children or the export of the beef ? The export of the beef came first, never mind the starving children.
Country after country is being asked to produce export products to meet a debt which is not of their own making. Those export products are not benefiting the people who are suffering worst in the poorest countries of the world. I fear that the GATT process does nothing to improve the lot of the poorest people. In fact, it is likely to make it worse.
The real beneficiaries of the GATT process are the very small number-- possibly no more than 500--multinational corporations which, between them, control 30 per cent. of global products and 70 per cent. of global trade. A very small number of people in a very small number of faceless offices around the world are the real winners in the GATT treaty. They are not accountable to national Parliaments or national Governments. They are not accountable to shareholders. They operate in their own way and wield enormous influence over the GATT negotiations and over the United Nations.
Far from controlling the activities of those companies, far from being an organisation which will control the power of multinational corporations-- indeed, the UN has closed its multinational corporations office--the World Trade Organisation will be telling poor countries, "How dare you impose import tariffs on these goods ? How dare you try to develop a protectionist economy which can provide self-sufficiency for your own people ?" Those countries will be punished by the WTO. The hon. Member for Sutton and Cheam apparently wanted to know what that punishment will be. The power to punish was handed over to the WTO without so much as a vote in the British Parliament.
I want now to consider the cuts in domestic subsidies arising from the GATT deal. As a result of those cuts, a third-world country--as we choose to call them--cannot subsidise its own agriculture. Instead, it must open its
Column 578doors to imports from the west. However, it is apparently perfectly okay for north American and British farmers to receive enormous subsidies for farming, often in an environmentally unsustainable way. We seem to be preventing subsidies from being meted out to help poor farmers in poor countries while we are allowing subsidies to go to very rich producers in the northern countries. Something seems to be fundamentally wrong there.
The International Herald Tribune summed up GATT in all its glory. It stated :
"Analysts said the multinational companies, which account for about two- thirds of the world's cross-frontier trade, would be the obvious winners from the deal . . . As part of the accord, foreign companies are to be granted the same national treatment as domestic concerns, making it easier for multinationals to relocate jobs in low-wage countries".
My hon. Friend the Member for Nottingham, South mentioned several examples of multinational corporations increasingly relocating jobs in the cheapest labour areas. Daimler-Benz moved jobs from Germany to Alabama in the United States. The Ford Motor Company regularly plays ducks and drakes with its workers around the world. All the big pharmaceutical and electronics companies do exactly the same. Japanese electronics companies used to have their goods made up in Japan. They now have them made up in Taiwan or South Korea. They are now moving into Bangladesh and India and wherever they can obtain the cheapest wage rates.
It is a policy of utter folly and great danger to set competition on a pedestal all on its own without regard to social and environmental consequences or the real costs to the environment of the huge increase in transport to which my hon. Friend the Member for Nottingham, South referred.
I want now to consider not the very poorest countries, but what we choose to call middle-income countries which must allow for an increase in the importation of agricultural products into their economies. Indonesia, whose Government I admire not a jot, has been told that it must allow up to 1.5 million tonnes of rice to be imported to Indonesia every year. Indonesia does not have a problem producing rice for its internal consumption. However, it has been told that it must allow those imports irrespective of the fact that 34 per cent. of its export earnings already go towards trying to pay a debt incurred from previous inequalities.
The GATT deal will cause serious damage in the form of environmental problems and problems for sustainable agriculture around the world. GATT seeks to say that the only thing that matters in the world is the principle of competition. When Conservative Members talk grandly about the need to introduce a competitive economy in Britain, as their counterparts do in France, Germany and every country in the world, that is a recipe for lower wages and living standards and higher levels of unemployment and for cuts in health services and the welfare state--all in the name of the free market economy.
I believe that that is the wrong direction in which to go. My hon. Friend the Member for Nottingham, South set out a series of ideas which would be a step forward and he was absolutely right. First, why is there nothing in GATT about workers' protection and rights ? Why is there nothing about the minimalist right to join a trade union and to organise together to negotiate for decent wages and working conditions ? The treaty says absolutely nothing about that. It would apparently be a gross interference with trade.
Column 579Nothing is said about human rights--for example, the way in which the Government of Indonesia have bombed the people of East Timor. Nothing is said about human rights abuses in China, or about the occupation of Tibet, and nothing is said about many other abuses that happen in many parts of the world. All those matters could be and indeed must be addressed. That must be what the inspiration and formation of the United Nations was all about--to try to address those very basic problems.
We now come to environmental sustainability. We live in a world of galloping consumption, mounting waste and mounting damage to the planet. I receive a fortnightly paper which is sent to me from Penang in Malaysia called the Utusan Konsumer , published by the Consumers Association of Penang. It is a very interesting paper for all that, because it often says the unpalatable truths from a relatively poor country to the rich of the north. It points out, for example, that "Western industry produces vast amounts of toxic waste . . . which is dumped in the Third World.
Since 1986, over 3 million tons of toxic waste have been shipped from Western Europe and North America to other countries.
About 125,000 tons of toxic waste are sent to the Third World from Europe each year."
That is the way of getting around environmental restrictions in the west and dumping them on the third world.
On brutal farming techniques, the publication points out : "Every decade, 7 per cent. of the world's soil is lost through large-scale farming techniques",
such as those used in the United States, where
"an area twice the size of California has been rendered unproductive."
Those are the very same farming methods as are being imposed on poor countries. The newspaper goes on to show the figures, which are well known, about the enormous waste of oil and other energy sources by the over- consumption of western economies.
Those crucial issues have to be faced up to. Rio gave us an opportunity and at least pointed in that direction. Much of the work of Rio, which is limited in itself, has been undone by the GATT treaty. We need to look forward to a future in a world in which we redress the problem of imbalances between the rich and poor and between the north and south, and stop worshipping the god of competition and the god of exploitation of other people and start looking to a sustainable future for the planet. GATT goes in exactly the wrong direction ; it does not help us at all. I wish that we had an opportunity to vote on it, because I for one would emphatically vote against it.
Mr. Derek Enright (Hemsworth) : I apologise for being unable to be here since the beginning of the debate. I have been attending the Standing Committee on the Education Bill, undertaking Opposition Members' constant drudgery of attempting to make the Government see sense. I regret to have to inform you, Mr. Deputy Speaker, that we did not quite do that this afternoon, but hope springs eternal in the breast, and I constantly pray for the sins and the sinners of the Government.
I should like to make a very brief intervention on some specific points. The principle of GATT is, of course, entirely right and correct. We are trying to get fair and decent trade around the world. But it is equally right and
Column 580correct that, as my hon. Friends have said, we should look at the social effects of much of what we are doing. In particular, one thinks of the way in which China, which has already been mentioned, is able to flood not only developing countries but this country with very cheap products without regard for normal decent human relationships.
Her Majesty's Government have prided themselves on saying, "We will assist the developing world only in so far as it puts democratic measures into their Governments and ensures proper reform." That should apply absolutely everywhere, not just to the small countries of Africa but to large countries. It is no use simply condemning China. We have to show that our condemnation of China, for example, means something.
Another point that I should like to be considered much more closely is world commodity agreements. It simply is not fair to ask very poor countries, which are producing goods for export at subsistence level, to put up with current fluctuations in world markets--something which can have nothing whatsoever to do with the efficiency of what is being done in a country but which can have much to do with current speculation on the world commodity markets. That can destroy a country, and that means destroying not only the country but individuals, families and small rural settlements. That has happened in Africa in particular.
The continent of Africa is the greatest suffering continent at the moment. Some of the problem is man made. The people who are resisting legitimate government in Angola and Mozambique, for example, are responsible for great misery. Angola and Mozambique will certainly have enormous commercial potential once they get over that problem. However, for much of Africa, the difficulty is not man made, it is natural. People have to eke out life at subsistence level by relying on exports and, in particular, on the favours that are given to them by the European Community.
The Lome treaty--I hope that the Minister will say something about it--is particularly geared to doing favourite things to favourite people--in other words, to looking after the continent of Africa, the Caribbean and the Pacific. In so far as GATT takes away from that, and it most certainly does, GATT is performing a wickedness which Her Majesty's Government must consider.
I have spoken before about the problem of bananas. As the Minister knows, bananas are covered by the protocol in the Lome treaty, but the deal that has been done under the GATT treaty has thrown away all the advantages that banana-producing countries in the Caribbean had. That is no joke to populations who depend for their livelihood on the production of bananas and on getting their bananas to their traditional markets.
We made a commitment under Lome that we would give special preference for African, Caribbean and Pacific bananas and, as the European Union, we must honour that preference, in spite of what is being said by certain parts of the GATT machinery at the moment. Indeed, a GATT panel recently challenged- -not in an official way, admittedly--the preferences that are given under the generalised system of preferences to developing countries by the European Union. Her Majesty's Government must give an absolute commitment that they will stand up to that threat and make sure that those developing countries continue to receive favoured nation status. The Prime Minister regularly says that he has great influence on Chancellor Kohl. He must
Column 581use all that influence on Chancellor Kohl in respect of bananas because Chancellor Kohl is taking the European Union to the court so that the Germans will be able to flood the country with even cheaper bananas which are produced by very cheap labour indeed. The virtue of the protocol in the Lome agreement is that it ensures that a decent wage can be paid to people who grow bananas.
Mr. Corbyn : Is my hon. Friend aware that dollar bananas, which are the ones that the Germans are keen to flood the European market with, are produced by environmentally damaging methods in large plantations in central America and parts of South America, whereas the smaller Caribbean bananas that we are used to in this country are much more environmentally sustainable and are usually produced by small farmers ? The economies of a large number of Caribbean islands will be totally devastated if the European Court decision goes in favour of what Chancellor Kohl wants.
Mr. Enright : I am grateful to my hon. Friend for underlining the point that I was making. I would add that it is odd that Germany should take such action on bananas and, at the same time, pursue a path of demanding special recognition and protection for its agricultural products. That is two faced in moral terms and must be resisted. I am not normally in the habit of doling out praise to the Government, but they have been reasonable in arguing with the German Government on the matter so far. Tonight, we should ensure that that tenacity of purpose continues.
Totally untrammelled trade agreements such as GATT can be an absolute disaster for poverty-stricken areas. It is, therefore, not simply a question of looking at the United Kingdom with regard to other rich countries but of looking at the United Kingdom with regard to other rich countries and poor countries. The whole picture must be examined but not in a one-sided way.
I shall conclude by talking about what I consider would have been a good example if it had been followed--the much-maligned multi-fibre arrangement. The idea of the multi-fibre agreements and arrangement was that there would be an orderly transfer of technology. That was perfectly all right. Certainly, the people who get poor wages in the clothing industry in my constituency would be happy for it to move somewhere else where goods could be produced effectively and cheaply and they could start to improve their standard of living. At the same time, it was agreed that jobs in the clothing industry would be replaced by high technology. It is most unfortunate that the Government took over in 1979 ; not a penny was put into developing high technology as all the textile jobs in West Yorkshire disappeared. That is not what happened in West Germany because the Germans saw that an orderly transfer was needed. They wiped out their clothing industry, but replaced it with high technology. That is why West Germany, even now with all the problems of East Germany, is infinitely more successful than the United Kingdom in terms of wealth creation, manufacturing and full employment. The Government should take a leaf out of that book, look at what is happening in West Germany and frame their policy on GATT accordingly. It is no use praising free trade when all it does is enslave a large number of people.
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Mr. Elliot Morley (Glanford and Scunthorpe) : The area that I represent is the centre for heavy industry in this country. It is one of the few such areas left, thanks to the Government's policies. Apart from having heavy industry and some high-tech industries, it is also an area of rich agricultural land. It is one of the United Kingdom's centres--and, indeed, one of Europe's centres--for intensive livestock.
Like the rest of this country, the area that I represent has a lot to gain from an orderly organisation of world trade and the encouragement of exports. Even though in principle we need the GATT agreement because of what it can offer, it has some severe disadvantages as it stands in terms of its impact on a whole range of issues, as has been outlined by my hon. Friends the Members for Hemsworth (Mr. Enright) and for Islington, North (Mr. Corbyn). Indeed, there are some issues that have not been satisfactorily resolved which the European Union should carefully consider before the agreement is endorsed. Like my hon. Friend the Member for Islington, North, I regret that the House has not had the opportunity to debate the detail of the GATT agreement or, indeed, to vote on it. Some of these issues could have been raised and discussed.
In terms of some of my concerns, I shall deal with agriculture and one aspect of it. I apologise for not being here at the beginning of the debate ; I was at a meeting of the all-party animal welfare committee. That committee, together with animal welfare groups in the United Kingdom and, indeed, in Europe, is concerned about the implications of GATT in terms of stopping the constant improvement of standards that we have seen in agriculture, animal husbandry, food quality and veterinary products, and stopping new developments such as genetic engineering and novel foods. The agreement has implications in terms of the right of individual countries to control what they import and how it is used.
I am amazed that Tory Members start huffing and puffing and getting all excited about the European Union and the alleged loss of sovereignty and powers ; yet, by praising the GATT agreement, they are taking away even more powers from the United Kingdom than the European Union because at least the European Union has some measure of accountability through directly elected Members of the European Parliament--whom we have just elected.
I shall give some examples of my concerns. In food agriculture and food production generally, agriculture faces some major changes as a result of the GATT. There must be some changes, because we cannot sustain the common agricultural policy with its subsidies and its impact on developing the third world in terms of dumping surpluses at subsidised prices and distorting the markets.
One issue is the use of artificial hormones in boosting food production. At present, the hormone known as BST--bovine somatotropin--is banned in the United Kingdom ; the European Union has decided to extend that ban for a further year. There is some doubt about whether such bans can be applied under the GATT. Indeed, GATT will be used as an excuse by companies and individuals to try to get products on to the market. What sense is there in taking away restrictions on the use of artificial hormones such as BST, which increase milk production, in this country when we have a huge surplus of milk in the European Union ? That surplus must be controlled by the
Column 583use of quotas, which have disadvantages. BST has implications for animal welfare and is not welcomed by consumer groups or, indeed, farmers in this country who know that artificial productions distort the market.
Another issue is the use of hormones in, for example, beef. At present, the use of hormones in beef is legal in the United States, but is banned-- rightly--in the European Union. The Americans could claim that keeping out their beef exports which have been subject to the use of hormones is illegal under the GATT arrangements and that, therefore, undermines the United Kingdom in taking the correct stand.
Another issue is animal welfare standards. The Labour party takes these issues seriously. Indeed, we have seen an improvement in animal welfare standards and production and rearing methods over the years. We want those improvements to continue and we campaign for that through the European Union. Things such as veal crates are banned in this country, but they are still legal in the European Union. Various methods of rearing livestock and intensive systems are still legal ; the use of battery cages is the best example of that. It will be difficult to bring about changes in intensive systems such as battery cages. If we impose restrictions on our farmers, they can be undermined by the importation of food products--in this case, eggs--from other countries which are not subject to the same restrictions and which can claim to be exempt under GATT. That makes it difficult to bring about improvements in animal welfare standards.