Examination of witnesses (Questions 360
- 373)
TUESDAY 27 JANUARY 1998 (PM)
DR MARJORIE
LISTER, MR
SIMON MAXWELL
and DR CHRIS
STEVENS
360. If you did that, yes. Europe cannot
simply export its subsidised surpluses in the way that it has
done on the world markets into a free trade area, it seems to
me that would be a contradiction in terms at least from what I
understand by free trade. I know that South Africa is complaining
that is what the Europeans are proposing, that they can export
their subsidised beef to South Africa—that is what we were
told this morning—and destroy the South African beef industry.
(Dr Stevens) It is what the Europeans are proposing
and something the South Africans should certainly not agree to
and are not forced to agree to it, for example, by the WTO rules.
361. No, but it is astonishing that Europe
should even propose it.
(Dr Stevens) Yes.
362. Could I turn briefly to bananas as
an exempla really, not just because it is something that I have
been associated with for some time. We have got not just bananas
on commodity protocols, also of course we have sugar, beef and
rum. I understand that the WTO ruling does not fatally undermine
the banana regime and that WTO have said certainly all they are
quarrelling about is the way in which a system of licences is
administered. What do you think are the ways forward in the light
of this ruling from WTO on bananas but also looking at the other
protocols which are of major importance to many developing countries,
sugar in particular, how do you think that this is going to affect
the Lomé negotiations in the future?
(Dr Stevens) Thank you, Chairman. It is a very
important point and it is very unclear at the moment. The Commission's
proposals are very opaque in terms of protocols, in some paragraphs
they say one thing and in some paragraphs they say another. The
WTO's judgment also needs considerable scrutiny because it appears
to have implications for other products.
363. Yes.
(Dr Stevens) It appears to rule that certain provisions
which the EU thought it had got agreement on in the Uruguay round
of negotiations no longer carry weight. I have to say I do not
think we know what the implications will be yet but in terms of
does the ruling undermine the banana protocol or not, the answer
is that you probably know a lot more about this than I do but
my understanding is that the new banana regime which the EU introduced
as a consequence of a single European market was we had to have
a new banana regime because we could not continue with the old
ways of giving support to Caribbean and African fruit under the
single European market. The new system had two elements to it.
One was a set of tariffs and tariff quotas which gave preferences
to Caribbean fruit so that Central American bananas pay a tariff
and if they try and flood the market they pay a huge tariff to
try and dissuade them from this. But you cannot get bananas from
St Lucia to Tescos in Sevenoaks just like that, you need infrastructure.
The characteristics of bananas which require sophisticated vessels
to carry them and the characteristics of the islands of the Caribbean
which are very small and do not have a substantial sea transport
means that if the companies which convey the bananas from the
Caribbean to Europe were to cease to do so the protocol would
cease to have any effect. We could continue to offer preferences
to Caribbean fruit but it would simply rot on the quayside. A
second element of the proposal was a set of measures designed
to continue to make it profitable for the two companies which
do this business, which at that time were both European, one is
now partly Caribbean, to continue to ship. Part of the deal was
to give them a rather valuable allocation of licences so they
could make a good profit on sales in mainland Europe in order
to supplement their revenue from conveying Caribbean bananas.
It is that which the WTO has shot down. You then have to ask were
the companies right when they said: "We need extra profits
in order to stay in business" or were they trying to get
a nice deal? If they were right then what other measures can be
brought in which are compatible with the WTO ruling which would
continue to allow them to profitably convey Caribbean fruit? It
is not easy to identify what can be done and it is particularly
difficult when we know that there is only the most paper thin
majority in the European Member States for support to the Caribbean.
The present regime got through by the skin of its teeth and the
likelihood of something more substantial which would place more
burden on European Member States, for example by giving direct
aid to the Caribbean countries to enable them to subsidise their
exports, could well collapse. I think we have to follow this one
with care. What Mr Eglin said to you is technically correct but
there is a political dimension to this as well and there is a
commercial dimension to this as well. It is entirely possible
that the effect of the ruling, even though it said the preferences
were sustainable, will be the collapse of banana trade but it
does not spell the death knell of Lomé because the one
thing they did say was that preferences were okay, it was just
the licensing which was bad and that is not a problem for any
of the other elements of Lomé.
364. We are going to have a teach-in on
this subject tomorrow because it is quite complex to understand
that licensing system so I do not think we will continue with
the licensing system which of course permits the importation of
further South American fruit. Can I ask you though do you buy
this argument that the economies of these tiny countries can be
diversified in such a way that the banana trade can be replaced?
Diversified is a wonderful word, it is used constantly as a sort
of balm on people who are losing their business: "You can
diversify into something else". Can these islands diversify
into anything other than tourism or the production of cannabis
profitably?
(Dr Stevens) I would certainly not say they can.
Simon has done work on this as well. Certainly no other merchandise
product other than drugs is as valuable as bananas are while the
banana protocol remains in force. The problem with diversification
is no farmer in their right mind would forsake the profit from
bananas, given the protocol, for something else. They will continue
to produce bananas until the 24th hour of the 365th day of the
last year of the protocol. What you need is some sort of mechanism
which can give incentives to move into other crops, perhaps by
the governments imposing export taxes which increasingly bring
down the price received by banana farmers to more closely approximate
what they would get on the European market if the banana protocol
was to come to an end. Then see which farmers can improve their
products at least sufficiently to compete, see which ones find
it more profitable to go into producing horticulture for the local
hotels and, I have to say, see which ones up sticks and move to
New York.
Chairman: I would
not like to stand for election on that platform in any of the
Caribbean islands that I know.
Ms King
365. Can I just ask why you are saying it
is perfectly feasible for them to be able to earn enough by diversification?
(Dr Stevens) No, I am not. We cannot tell. It
is by no means certain that they can. If we could wave a magic
wand and continue the banana protocol forever that would be the
best outcome. It is because we cannot, and because the alternative
is so unattractive, that the sooner the problems of diversification
are addressed the better and although it is politically very unattractive
it is also quite useful to be able to say "We are not doing
it of our own volition, it is these bloody Europeans who are forcing
us to do it".
(Mr Maxwell) I worked on these islands quite a
lot, as you know, Chairman, but not for some time. You might just
find out tomorrow what has happened to banana prices in the last
five years. My understanding is they have already dropped dramatically
and that has caused huge poverty. The islands havee a very diversified
ecology. Some of the banana producers can probably produce at
world prices. They will be in the valleys, it will be flat, they
can use all the modern technology, they have a road, they are
close to the harbour. Most of the people growing bananas, not
necessarily most of the bananas but most of the people, are half
way up a mountain somewhere, carrying every sack of fertilizer
up a steep slope and every bunch of bananas down again. It is
very, very hard for them. It is very hard to think what else they
will do instead. This is not territory where you can grow flowers
to export to Miami. It is not territory where you can grow anything
that is easily damaged. Some of the islands have nutmeg, cloves,
cocoa, there are tree crops you can grow on these hill sides,
but if I were thinking long-term about the future of the Caribbean
islands, which are after all middle income countries, they are
going to find a future outside agriculture, largely through tourism,
eco-tourism, using the interior of the country and not just the
beaches; and then, possibly as Mauritius has done, going into
rather high level manufacturing of one kind or another. However,
the competition is stiff and you are competing with Central America
which has cheaper labour and is closer to the market. I do not
think these are easy problems.
366. Would you agree with Dr Stevens' assertion
that perhaps the best thing to do now is to effectively increase
taxes on those exports and just see what happens and if they starve
to death, some of them, that is the price and, as you say, some
of the others might turn back to New York? Would you agree with
that or not?
(Mr Maxwell) I am sure Chris is not arguing for
mass starvation in the Caribbean.
367. No. That might be the impact depending
on where people are, as you say.
(Mr Maxwell) All the islands have taxation in
place. Maybe income tax or tax on farm profits is a better way
to achieve the objective of raising revenue, and then spending
it on all the things we were talking about earlier to do with
poverty reduction. When I used to work in the islands ten years
ago, the levels of primary health and primary education outside
the main centres were appalling. There is a big job to be done
in human development in all the islands. The question of whether
the banana protocol, which is a tax payment by European consumers
to the production chain, is the right way to provide support to
poverty reduction in the islands is a question I think nobody
has quite asked.
Chairman: We are going
to have to pursue bananas at some other time. I want to bring
in Piara.
Mr Khabra: We have
had a very long session. This may be the last question.
Chairman: No, there
are three more.
Mr Khabra
368. You will know that most of the ACP
countries are now members of the World Trade Organisation and
others are going to join later on. However, their participation
in the World Trade Organisation's activities has been relatively
weak. What are the reasons preventing the ACP countries from playing
a fuller role in the WTO? How could this be improved?
(Dr Stevens) Thank you. That is a very important
question. It is all very well saying it is one country-one vote
but unless the country knows what it is voting on it can hardly
defend its interests and it cannot know what it is voting on unless
it has studied the documentation. The WTO is a very labour intensive
organisation. Every day there are two, three, four, five meetings
of different groups on which members should be represented. That
is fine in the EU which has a large office and fine in the United
States which has a large office in Geneva. I was lecturing to
some Mozambique civil servants who were in the Netherlands for
a course last week and they do not even have a mission at the
moment in Geneva. If you are a poor country and have very limited
resources to have foreign missions it is clear to my mind the
three most important ones which you go to long before Paris or
London. They are Washington for the World Bank and you can cover
the UN as well, Brussels for the EU and Geneva for the WTO. Not
to have a mission in Geneva is failing to defend your interests.
Even if they have a mission it is going to be small so they have
to form alliances with other countries with similar interests
so they can share in the work. Above all, they need to get assistance
from outside. I think there is a very strong role for UNCTAD to
perform in providing technical support to developing countries,
particularly the smaller ones, to help them identify what is going
on in Geneva which affects their fundamental interests and then
make an input into the debate so those interests are protected.
Without that the membership will not produce the return that it
should.
Chairman
369. I am sure that is right. Can we go
on to some general questions because I know Simon is very anxious
to answer the question that Andrew Rowe put to him about how parliamentarians
can work together. Would you like to do that now, Simon?
(Mr Maxwell) The basic problem with Europe is
this, and it took me a long time to realise it, that actually
almost everybody agrees on the changes that need to happen. You
agree, we agree, the Commission agrees, the developing countries
agree, but year after year it does not happen. The issue that
I am now beginning to think about and research is the question
of why not, and understanding what moves change in the European
Union. It is the ethnography point again. Somebody needs to look
at it in much more detail. It seems to me there is a real role
to be played by parliaments around the Member States. It is not
enough for the rather secretive Councils of Ministers to move
the debate forward. The European Parliament plays a certain role,
but there is a wonderful opportunity to link parliaments around
Member States in support of change. The specific suggestion that
I have come to the Committee with this afternoon is that, under
the British Presidency perhaps, but even otherwise, we arrange
a meeting for you, Chairman, and the people who do your job in
all the Member States, to talk about how parliaments can be mobilised
to support this debate. It is extremely important to have debates
in this kind of forum for the British Parliament, but it is a
drop in the ocean and it is not going to have a Europe-wide impact,
unless you as a group and we as a country take the message over
there. A meeting which was specifically of chairs of development
committees from around the Member States would be a tremendously
powerful vehicle for moving the debate forward. It is a question
of organising ourselves in a much broader circuit of civil society,
parliamentarians and others, to support change that I think we
all agree is needed.
Chairman: This Committee
has been talking about that and with that encouragement I think
we ought to take that on further.
Mrs Kingham
370. I think it is an excellent idea and
I think you cannot do enough networking, particularly between
politicians and different states and different committees. You
do not want to keep re-inventing the wheel, do you? What practical
difference will that make? It is all very well sitting around
talking as groups of parliamentarians but the mechanisms for actually
taking change forward are very fixed. You have said yourself that
Resolutions actually do not get implemented, the Council of Ministers
is fairly secretive, it is quite bolted down what their agenda
is and how they operate, the European Parliament has a limited
remit and cannot even initiate policy. How practically could that
make a difference?
(Mr Maxwell) I have got a little list somewhere
of six things that need to change in Europe. It would be very
helpful, for example, to have a Resolution passed in most of the
Member States with identical wording supporting that list. That
would really put the weight of a people's Europe behind it. That
is what we are going for: Let us get the people's Europe mobilised
behind a short list of six key changes in Europe.
Chairman
371. I think you have got yourself a job,
Simon. Would you put in a memorandum to us, a quick one, a small
one, making your suggestions[9].
The Committee has discussed what we should do. We are very keen
to be in touch with the European Parliament's committee but I
think the idea of mobilising the national parliaments on this
issue, particularly as we have got the Presidency, is one the
Committee would like to pursue. If you could put those down in
writing I think we would be delighted to take that suggestion
up. Can I also ask from Dr Lister and Dr Stevens, and Simon again,
what you think this Committee might contribute to this whole process
of renegotiating Lomé and what difference you would wish
to see this Committee making in the discussions and the formation
of political will to achieve the aims we all share?
(Dr Lister) I think there is a lot the Committee
could do pushing issues that you are perhaps very aware of: gender
can go much further; poverty alleviation; perhaps also to carry
on the idea of a people's Europe, getting Lomé going to
the public. I think if we go out on the street and ask 100 people
whether they have heard of the Lomé Convention you will
hear 99 noes.
372. I would think 100.
(Dr Lister) I think it would really be excellent
if people could begin to understand what the Lomé Convention
is.
(Dr Stevens) We need to set the negotiations off
in the right direction. They will be concluded optimistically
in 2000, probably after that, so we cannot get into detail and
comment on proposals. The right direction is, firstly, there should
be a statement of clear principle when the Council considers the
proposal of the Commission for a mandate that whatever happens
no ACP country's access to the European market should be worse
after Lomé IV than it is now because that is not in the
interests of the European consumers and it is not in the interests
of ACP producers. Secondly, the best way to offset the bias in
policy in favour of ACP countries, some of which are not the poorest,
is to improve the treatment of the other countries rather than
worsen the treatment of the ACP. We should take the opportunity
of the need to renew the GSP to do just that.
(Mr Maxwell) A very quick final point. I am beginning
to discover that it is really important in this business to get
the chronologies very clear about what decisions are made when,
and how far in advance one needs to be pulling levers to influence
the decisions. I have to say I suspect you have left it a bit
late on Lomé, because an awful lot of water has gone under
the bridge. One other thing to keep your eyes on, so to speak,
if you will forgive me putting it that way, is 2000, when the
new Commission comes into office in Brussels. There will be a
single vice president for external affairs, who will manage all
the directorates general dealing with Asia, the ACPs and all the
rest including ECHO. They will all come under single leadership.
For me, that provides an even more important opportunity than
Lomé to restructure and focus a European aid programme
and pursue the poverty reduction objectives. 2000 is very important
for that.
373. That has been agreed, has it?
(Mr Maxwell) It was in the Amsterdam Treaty that
there should be a single vice president for external affairs.
Chairman: Yes, that
is very important. This Committee is very determined to make a
difference. We will not make a difference without this kind of
help that you have given us this afternoon and with your papers
and with your answers. We are going at the end of February to
Kenya, Uganda and Rwanda where we are going to look at several
major aid issues: the question of debt; the question of gender;
the question of conflict prevention and resolution. We hope to
get examples of all the best practices that we can find and all
the worse ones that we can find as well so that we can learn and
through that process, with that knowledge, begin to really give
firm examples of the way in which we feel the aid programme should
be trying to meet the objectives of the British White Paper and
in this context of course to introduce some of those aspirations
into the European context so that it becomes more effective. I
do not think it has been a total disaster, in fact there are a
lot of successes which perhaps we have not spoken about today
and we must do so in terms of balance and also to enthuse people
that this is a worthwhile thing to do. Thank you all very much
indeed for your hard work, for coming here and discussing and
enlightening us on these matters. Thank you very much indeed.
9 See Evidence, pp. 145-146. Back
|
