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Mr. Denis MacShane (Rotherham): Is it not significant that the motion does not refer to social issues such as pay? It refers to
- "environmental and animal welfare objectives"
- "international biodiversity agreements".
Mr. Woolas: I agree with my hon. Friend but, to be fair, his point does not negate the points that are set out in the motion, as I think he would admit.
Another interesting feature of the contribution of the hon. Member for Christchurch was his failure to recognise our responsibility to our Commonwealth partners. The responsibility which France and we in the United Kingdom recognise to our partners in the Caribbean and Africa has, in part, led to the dispute.
The cashmere industry--I highlight also the threat to the unembroidered cotton industry, which concerns Lancashire in particular--faces a vicious attack. I believe that the Americans knew full well the seasonal nature of the cashmere industry not only in marketing, but in buying and shipping. The position is made worse by the knowledge that if, as is happening, we lose this trade, it will go to China, which is the only other significant producer of cashmere in the world. It will be extremely difficult to get that business back.
It is worth pointing out on behalf of the United Kingdom clothing and textile industry that, if cashmere were not under attack, it could be Nottingham lace, Savile Row suits or Axminster. It could be any of the high-skilled, value-added sectors in the clothing industry on which that industry's future depends.
In this context, it is a very good thing that we are members of the European Union. Without the protection of that trade bloc, that single market, we would be vulnerable to the United States. I hope that no one will draw the conclusion from this trade dispute that membership of the EU is anything other than a good thing.
Mr. Stephen Dorrell (Charnwood):
I shall not detain the House for longer than a couple of minutes. I begin by declaring an interest as a director of, and shareholder in, a clothing company that is not directly involved in the dispute that we are discussing. However, like virtually all modern clothing companies, it is actively involved in international trade.
This is an important debate. It has been occasioned by bananas and by the implications for the banana trade in the Caribbean and for our domestic cashmere industry of
the actions that the Americans have taken as a result of the dispute. The significant point that the House should draw from the circumstances in which we find ourselves is the central importance, not only to the United Kingdom and other countries in Europe, but to poorer countries throughout the rest of the world, of following through the progressive liberalisation of trade that we have seen over the past half-century, since the end of the second world war.
The real debate this evening has been fascinating. It is the one that has taken place among the occupants of the Government Front Bench, my hon. Friend the Member for Christchurch (Mr. Chope) on the Opposition Front Bench and at least some Liberal Democrat Members. Liberal Democrats have argued the case for progressive liberalisation, while the forces that I think those on the Government Front Bench would recognise as old Labour, who are ranged behind them--at least they were--are still instinctively seeking to control, or to plan to safeguard, very proper concerns. Of course we are all anxious for living standards to be improved. Of course we should all be concerned to protect biodiversity and the environment.
Surely the history of the development of trade over the past half-century should persuade us that the best way of improving people's living standards, and of providing resources for reinvestment in the environment and other desirable social policy objectives--the best way of underwriting the improvement not only of standards of living, but of quality of life--is to create the wealth that allows those options to be open. The progressive liberalisation of trade makes that possible.
Mr. David Chidgey (Eastleigh):
I congratulate my hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) on the powerful way in which he opened the debate. He made a strong case for the plight of his constituents, the thousands of people who run the risk of losing their jobs. He rightly pointed out the shortcomings in the diplomatic efforts of the European Union and the United States so far. We need a fair resolution and respect for the World Trade Organisation and its rule base, as the right hon. Member for Charnwood (Mr. Dorrell) said.
I am pleased that, when he spoke on behalf of the Government, the Minister recognised that my hon. Friend the Member for Tweeddale, Ettrick and Lauderdale had put up a reasonable case. There is all-party agreement on the matter. The Minister pointed out that we in the EU and the USA are the two key players on the world trade stage. We should all remember that. We are intertwined, and our economies are locked together. The Minister told us a great deal about our trade successes. With all due respect to him, we all knew that. The issue is what we are to do about the unwieldy and unbelievable dispute about bananas.
The hon. Member for Christchurch (Mr. Chope), who led for the Conservative party, made some interesting comments about his preference for compliance rather than compensation, and about his complete faith in market forces and the unfettered exploitation of the most vulnerable. I have always believed that trade should be not only free, but fair.
The debate has shown that the so-called banana war has all the makings of a Whitehall farce. It is a throw-back to 19th-century gunboat diplomacy, but it is a farce with deadly serious implications for sensibly regulated world trade, and for safely harnessing the science of genetic modification and hormone additives in the food chain--something about which my hon. Friend the Member for Lewes (Mr. Baker) spoke so eloquently.
Neither the EU nor the USA is blameless in the present fiasco. By using loopholes in the WTO compliance rules, the EU has tinkered with its banana import regime, stalling over the day when it must change the system whereby it protects its former colonies.
Very few, if any, independent observers believe that the EU is acting legally, but the EU claims that it cannot be sure about that until the WTO rules again. On that basis, the EU could carry on tinkering with the rules and never comply with the WTO judgment.
America is also flouting WTO rules. By retaliating with trade sanctions through 100 per cent. duties on EU products targeted at the UK, it is effectively stopping trade. Not only will that destroy the livelihoods of thousands of workers in the Scottish borders, but the US is acting in direct contravention of WTO rules on free trade.
At the heart of the dispute lies a fundamental clash of different obligations to different parties. The EU has obligations to WTO trade rules and obligations under treaty to former colonies in Africa, the Caribbean and the Pacific. To American eyes, those colonial links might appear to be relics of the past, but it is time for America, as today's super-power, to accept the responsibilities of its dominant position and to think and act beyond the interests of short-term commercial advantage.
The dismantling of the EU banana regime would only marginally increase the profits of the multi-billion dollar American banana distributors, but it would destroy at a stroke about 25 per cent. of the economy of a string of Caribbean islands. America's response appears to be that the EU should replace preferential trade with economic aid. Nobody can imagine that destroying the fragile economies of small island states, and throwing thousands of people out of work and into benefit dependency, is a constructive policy. It flies in the face of America's own claims to social justice and Bill Clinton's claim that he would give America's poor a hand up, not a handout. However, he wants us to hand out aid in the Caribbean rather than have those economies prosper.
There is a darker side to the banana war--the blatant manner in which corporate America can corrupt political thinking in the Senate and in the White House. It would be far fetched to say that it was mere coincidence that the American banana distributors donated $500,000 to the Democratic party coffers only 24 hours before America lodged its latest complaint over the banana regime. Their actions show that the producers are more bent than the bananas that they sell.
A still darker side to the banana war could be the reaction in the Caribbean to massive job losses on the banana plantations. America has spent billions of dollars in Latin America trying to turn farming communities away from drug production to producing legitimate cash crops, and forcing a collapse in the Caribbean banana industry would only increase the likelihood of more illegal drug production. The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) spelled that out early in the debate during an intervention. If more drugs are produced, they will go to the most profitable and readily accessible market. That is the United States of America.
The escalation of the banana war would bring a host of casualties--thousands of job losses in the Scottish borders, the destruction of island economies throughout the Caribbean and an increase in illegal drugs production and trade, targeted on America--but even more damaging in the longer term would be the signalling of a crisis of confidence in the WTO, which is the supposed arbiter of world trade disputes.
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