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Mrs. Maria Fyfe (Glasgow, Maryhill): The hon. Gentleman is displaying a great deal of interesting expertise. Does he know the typical daily wage of a worker on a plantation owned by Chiquita and of a worker on a Fair Trade plantation in any of the relevant nations? I am concerned about knitwear workers in the borders and other workers in this country, but, like many people in this country and in the United States, I am also concerned about fair pay for people who grow the bananas in the first place.
Mr. Chope: I fear that the hon. Lady's intervention is depressing, because it shows that Labour Members are willing to engage in irrelevancies in the context of a world trade dispute. How much people are paid to produce bananas in any particular country is not the issue in dispute, and the WTO rulings do not take it into account at all.
Mr. Stephen Dorrell (Charnwood): Did not the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) reveal a split between herself and her Front Benchers? We heard an impassioned plea for free trade from the Minister, but the hon. Lady seems to be in favour of free trade only where she is in favour of the wages paid by the producers.
Mr. Chope: My right hon. Friend is absolutely right; one either believes in global free trade or one does not. Disputes will arise if any individual nation starts to interpret global free trade on the basis of whether it thinks that trade is fair from its perspective. That is why we have the WTO, which has--
Mr. Phil Woolas (Oldham, East and Saddleworth) rose--
Ms Tess Kingham (Gloucester) rose--
Mr. Chope: I shall not give way any more; I will make my point.
Dr. Norman A. Godman (Greenock and Inverclyde): He is needled.
Mr. Chope: I am not needled in the least. I am sure that Labour Members will want to ask Ministers why their views have not been reflected. Conservative Members have always been somewhat suspicious about the commitment of some hon. Members to global free trade; I hope that the Minister will reaffirm that the Government are unequivocally in favour of it.
Mr. McLeish: It is interesting to see how the consensus in the House is breaking down. The costs of employing people in third-world countries have been dismissed as "irrelevancies". If that is official Conservative policy, let us have it on the record. The hon. Gentleman referred to "those people" in the cashmere industry. They are workers with families and commitments and they want their products to be exported. Are costs in the third world
irrelevant and is he dismissing the concerns of people in the borders, the east midlands and elsewhere as the concerns of "those people"? That would be outrageous; he should make clear what he means.
Mr. Chope: I am glad that I gave way to the Minister, because he has had the opportunity to try to wriggle on the issue of what will happen on 12 April. What will be the response of the EU and of the Government when the ruling comes? We have made it clear all along that we sympathise with people in the cashmere industry, who are the innocent victims of this trade dispute, but what will be done on 12 April to ensure that the cashmere industry is able to survive in the way that it has under the regime of free world trade?
The wages that people receive for producing goods in different parts of the world is not a world trade issue. I hope, as a lot of Labour Members may hope, that one of the outcomes of the Seattle meeting in November this year will be that China becomes a member of the WTO, which would be good for global free trade. We cannot emphasise enough the fact that we in this country depend more than the Americans and the European continentals on the concept of global free trade, which means that people should be able sell their labour in the marketplace and market their goods without facing unfair tariff barriers.
World free trade is in the best interests of the third world and the developing countries. It is a shame that the EU and the United States cannot negotiate a deal on bananas, but it is also unfair to put the blame for that failure largely on the Americans, as Liberal Democrat Members seem to be doing. If one looks at the facts, one can see that the Americans have complied with past WTO rulings.
I understand that this is the first occasion on which a WTO member that has lost a case has failed to eliminate its measures altogether or to change them after consultations with the complaining parties. The United States has made such changes in three cases, but the EU is the first WTO member to fail to do so. That was the response of the United States representative.
Mr. Moore:
The hon. Gentleman has been at pains to characterise some of the Liberal Democrat arguments as simplistic. Are we to believe that the fault in this whole dispute relates entirely to Europe, and that the Americans are for some reason devoid of responsibility?
As for simplistic arguments, surely it is utterly simplistic to suggest that American multinationals should have carte blanche to do what they wish in world trade, with no regard for the fairness of that trade or the way in which the work forces are protected.
Mr. Chope:
I do not suggest that the Americans are without fault. Certainly, they were offside in introducing a retaliatory regime while the issue was still before the World Trade Organisation; we have never advanced a contradictory view. I think we are naive, however, if we do not understand some of the frustration that is felt in the United States about the long time that it has taken to resolve the matter in the European Union. There was a ruling in its favour back in May 1997; now, in March
Dr. Godman:
The hon. Gentleman is right: we should not engage in a blanket condemnation of the Americans. May I point out that the American labour movement is actively engaged in a campaign to improve the terms and conditions of employment of those employed by American multinationals in central and south America, and elsewhere?
Mr. Chope:
I thank the hon. Gentleman for pointing that out.
I have responded to a number of interventions. Let me now deal with the next issue on the horizon--the issue of hormone-treated beef, to which the Minister has referred. He told us, in a very matter-of-fact way, that he does not expect the European Union to comply with the World Trade Organisation ruling, which it must by 13 May, but he did not say why the EU would not comply with the ruling by that date. Is it surprising, in the light of that behaviour, that Richard Rominger, United States Deputy Agriculture Secretary, announced on Friday that the United States was drawing up a list of products that could face retaliatory sanctions if the EU failed to comply with the ruling? He is at pains to avoid such sanctions, but he has come to Europe seeking meetings with European Commission representatives, and, according to newspaper reports, has been told that it is not even possible to see officials at Cabinet level, let alone Commissioners, to discuss the crisis relating to hormone-treated beef. Moreover, only last week two European Commissioners missed a biotech conference at which they were to share a platform with Mr. Rominger.
That shows, on the part of the European Union, a disdain for the importance of world trade issues. I hope that the Minister will be able to assure the House that the Government are putting all possible pressure on the European Union to pull its finger out and get to grips with these important matters.
Another issue on the horizon--not mentioned in the motion--is that of hushkits. The EU is scheduled to put into effect, on 29 March, a law freezing the use of the aeroplane mufflers called hushkits, under which companies would be forbidden to add hushkitted aeroplanes to their fleets. A meeting is due to take place on 23 March between the United States Transportation Secretary and the European Union Transport Commissioner. It seems likely that the dispute will exacerbate the issue of EU-US trade, and it appears to be related very much to European Union protectionism. The only people who produce the hushkits are the Americans, and for the most part it is American airlines that use them. The European Union is saying that an arbitrary interpretation is being placed on an International Civil Aviation Organisation agreement, which seems to be being used to prevent the import and use of hushkits in the EU. That is another potential disaster for global trade. I hope that, as a Brit, the Commissioner responsible will realise that it would be counter-productive to proceed in the way proposed by the EU.
Mr. Stuart Bell (Middlesbrough):
I agree with the hon. Member for Christchurch (Mr. Chope): this is an important debate. The issue of hushkits is also important, but I shall leave it to the Minister to respond to a pertinent question put by the hon. Gentleman, which was also touched on by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood): what will happen on 12 April?
If, on 3 March, the arbitrator had come forward with a resolution of the dispute between the United States and the European Union on whether the new regime conformed with WTO rules, or had made it clear that he had fixed the amount of compensation in some other way, it might not have been necessary for all this to happen. It might not have been necessary to withhold the liquidation of entries for products such as cashmere. What will happen on 12 April? The United States has taken its action because it believes that it will be given a compensatory amount in damages of some $500 million--possibly $520 million.
That being the case, what will be the EU's response? Will it accept that the amount should be paid by the EU overall in compensation, after which the withholding of liquidation of entries on the products that we are discussing will disappear? The question is pertinent; we shall have to await the outcome. The United States has clearly stated that it will accept any arbitration result. If the arbitration favours the US, it will accept that; if it favours the European Union, and the EU has followed WTO rules in relation to bananas, it will accept that, as is proper.
The House moves through many moods. Not long ago--two weeks ago, perhaps--we were all deriding the European Commission, and applauding the fact that all the Commissioners had resigned en bloc. We were all calling them incompetent. Now, we are having to try to defend the way in which they have handled a dispute with the United States that goes back for at least six years, as the hon. Member for Roxburgh and Berwickshire said.
When we speak of the United States, there is a point that we often overlook. The Minister touched on it when he said that 38 per cent. of world exports come from America, and that 39 per cent. of imports go into America. America remains the largest trading nation in the world. It is also self-sufficient. If it ever decided that free trade was not the policy that it wished to follow, the rest of the world would go bust. We ought to bear that in mind, and be grateful for the fact that the United States follows free trade policies. In January this year, it had a $17 billion deficit on its trade. It took in other countries' washing to the tune of $17 billion against its own exports.
We in the European Union vaunt ourselves because we have a surplus on our exports, rather than a deficit. The largest bilateral trade deficit that the United States has is with China--$4.88 billion, up from $3.98 billion.
The hon. Member for Christchurch mentioned China's involvement with the WTO, and hoped that it would happen in the autumn, when the Seattle conference would take place. It is a pious hope that China will be able to
come into the WTO at that time, but I do not think that it is ready as a nation state to meet the obligations placed on it because of the WTO's free trade and fair trade rules.
My hon. Friend the Member for Bradford, North (Mr. Rooney) talked of the Uruguay round and its impact on textiles. For 12 years, we all followed the route of the Uruguay round--it went from Uruguay to Marrakesh--before the agreement was signed. The question of the entire Uruguay round was: how can free trade in the world be rules based? That touches on the point that was made by my hon. Friends the Members for Glasgow, Maryhill (Mrs. Fyfe) and for Greenock and Inverclyde (Dr. Godman). There have to be rules not only on trade through the WTO, but on labour through the International Labour Organisation.
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