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Mrs. Gwyneth Dunwoody (Crewe and Nantwich): Could my hon. Friend get over a fairly straightforward message to our American cousins, which is that, if they wipe out the one-crop export from very poor Caribbean islands, the people on those islands will certainly grow other products? In the end, the United States will be the recipient of those various products. If that is not so, the
Caribbean islands may very well act as gathering points for other people's drugs. If that is a message that cannot be understood, will my hon. Friend please try to put it in simple terms or picture language, or something, that will get over to our American cousins what they are doing?
Mr. McLeish: I am grateful to my hon. Friend's contribution. I can reassure her that what she says is being done by my hon. Friend the Minister for Trade day in and day out, given the implications of what is happening. It is important also to acknowledge the importance of bananas to the countries that we are talking about. They are part of the wider and complicated matters with which we are dealing. I can reassure my hon. Friend that every step will be taken in a straightforward way to impress on the United States the importance of the matter being resolved.
I was talking about the WTO's dispute settlement system. It has already served us well, for example, in opening Japan's market to Scotch whisky, and it will continue to do so in future.
The European Union's ban on hormone-treated meat has been in place for more than 10 years. In 1998, the WTO found that the EU ban was inconsistent with WTO rules because it did not follow from a properly conducted risk assessment based on science. The EU was given until 13 May 1999 to comply with the ruling. It now seems that the EU will not meet that deadline.
The rules of the WTO require that trade measures put in place to protect human, animal and plant health must have a sound scientific basis. Governments can and do apply restrictions to protect their consumers, but they must be in line with international standards or justified by a risk assessment where they are more stringent than international standards. If those rules were not in place, countries could impose restrictions simply designed to protect their own domestic industries, but disguised as consumer protection measures.
We are encouraging the Commission to explore constructive solutions with the US and Canada, particularly ideas on labelling, and temporary compensation to avoid further escalation of the hormones dispute into a damaging trade war. I hope that those discussions will find a way forward in this dispute.
The hon. Member for Tweeddale, Ettrick and Lauderdale raised the issue of sustainable development, to which the Government are committed. All Governments need to consider their trade and environmental policies together. Protecting the environment and maintaining an open, non-discriminatory and equitable multilateral trading system are essential to achieve our objective of sustainable development. There are many effective, internationally recognised measures which aim to protect the global environment. There is more to be done, however, although significant progress has been made in the past 20 years or so with a number of multilateral environmental agreements. Liberalising trade helps to ensure that resources are used efficiently; it helps generate the wealth necessary for development and environmental improvement, and it encourages the spread of clean technology.
The world trade system should not be undermined. To do so would put at risk our aim of achieving sustainable development. That in turn would, of course, have negative environmental impacts.
It is clear that trade and environmental policies must accommodate each other to be fully effective. They are less in conflict than some might claim, but that does not mean that potential conflicts do not exist. Governments have a duty to balance the objectives of protecting the environment and of upholding the multilateral trading system, whether they are negotiating in a trade forum or an environment forum. It is therefore for parties to both existing and new agreements to ensure individually and collectively that they do not sign up to conflicting requirements. At the most recent WTO ministerial meeting in Geneva, my right hon. Friend the Prime Minister said:
Some have questioned the wisdom of pushing ahead with trade liberalisation proposals at a time of difficulties in the global economy. Trade policy was not the cause of the Asia crisis, nor does it provide a complete solution. However, it can help the world on the road to recovery. Freer trade has brought substantial gains to the global economy in the post-war era. Most recently, the Uruguay round brought a significant boost to world trade and incomes. One of the key lessons from the 1930s is that a protectionist response to a global crisis makes matters much worse. So far, there has been relatively little protectionist backlash. However, there are some signs of growing pressures, especially in the US. It is therefore essential that momentum for further liberalisation is maintained. That is why--I repeat the reassurance--the UK and the EU have pledged to resist protectionism, and are at the forefront of efforts to secure a new round of multilateral trade negotiations.
Mr. Terry Rooney (Bradford, North):
The House may know that the largest cashmere manufacturer in Britain is in my constituency. Part of the settlement under the Uruguay round was that British textile goods sent from the United Kingdom to the United States carried a 37 per cent. tariff, reducing by 1 per cent. a year over 10 years. Can we have that issue on the agenda at the Seattle conference at the end of the year? It is not free trade, but protectionism.
Mr. McLeish:
The first priority is to resolve the outstanding issues that we face in that regard. I think that my hon. Friend acknowledges that. I am sure that my hon.
I shall identify briefly some of the subjects that are particularly important to the UK. They include further tariff reductions, reducing the burden on business and barriers to trade represented by industrial standards and technical regulations, opening up Government procurement markets in third countries, simplifying import and export procedures, seeking substantial progressive reductions in support and protection for agriculture and developing better regimes to cover issues such as food safety, deepening and broadening the liberalisation of trade and services and establishing a liberal rules-based framework for international investment. Those are all issues that are very important for the UK and, of course, for the EU.
The Government are conscious of the fact that not all WTO members support a comprehensive round: many are more focused on market access than on new rules issues, and others stress the need to stick only to those negotiations to which we are already committed--those on agriculture and services. President Clinton's recent signal, in his state of the union address, of support for a new round was a welcome development.
It is too early to say what package will emerge from the ministerial conference this year. Discussions in Geneva have so far been necessarily general, in order to avoid pre-negotiation. As with all issues in the WTO, decisions on the scope and shape of those negotiations will be taken on the basis of consensus.
New issues, including new work on the environment, are likely to be the most difficult in the new round. Developing countries in particular are saying that those issues are not ready for substantive negotiation. Although we must be realistic about what is achievable in the circumstances and within the time constraints, we see value in such issues being included.
Clearly, there will be a strong focus on agriculture. The WTO negotiations will put added pressure on EU common agricultural policy reform. Agriculture liberalists are making it clear that they will want major liberalisation of tariffs, quotas and export subsidies. That is an important issue for developing countries.
Concerns are being expressed in Geneva about the implementation of existing agreements. A more coherent focus will be needed on technical assistance and capacity building. That is not, of course, for the WTO alone--the United Nations conference on trade and development, the World bank and the International Monetary Fund will have a part to play.
"Governments need to consider the environmental impact of everything they do, including in the trade sphere. Trade rules should not be used to impose unfair standards on developing countries, nor to discriminate against their exports."
I shall make some brief points about comprehensive multilateral trade negotiations. This is a welcome and timely opportunity to say something about the Government support for a comprehensive round of trade negotiations, which will be launched at the WTO ministerial conference in Seattle at the end of the year. The Seattle ministerial will be the third ministerial conference. The first meeting in Singapore in December 1996 put in place a work programme on new issues such as investment, competition, procurement and trade facilitation. The second meeting in Geneva last May agreed the process of preparation for Seattle. The UK believes that a comprehensive round would allow all countries, including developing countries, to secure an overall package that would reflect their broad interest, largely because of political impetus and because it would allow trade-offs across a range of areas.
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