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Mr. John Gummer (Suffolk, Coastal): Does the Secretary of State agree that if that position is to be accepted--the Conservatives entirely agree with it--the international community must pay the same respect to labour and environmental standards as it does to the work of the WTO? A disproportion of respect lies at the heart of the concern expressed by many non-governmental organisations and others.

Mr. Byers: The right hon. Gentleman makes an important point. It is a question of how the WTO rules are enforced. One reason why many people want to bring matters within the WTO is that it has an extremely effective enforcement mechanism, whereas many other international organisations do not. I believe that that is a case for reforming some of those other organisations to make them more effective, not trying to bring everything within the WTO's remit. However, that is a matter on which there is, we hope, agreement on both sides of the House.

There is one labour standards issue from which we cannot walk away. We have an opportunity to bring together international organisations such as the ILO, the WTO, the United Nations and the World Bank to identify ways in which we can lift countries out of poverty in a positive way, in the belief that by doing so we are more likely to secure improvements in labour standards. That is a far more effective way forward.

Mr. Tony Benn (Chesterfield): Will my right hon. Friend explain why the Government have not embodied in statute in Britain the commitments on trade union rights into which they entered in the International Labour Organisation? Is he aware that the Employment Rights (International Obligations) Bill has been presented, supported by nearly 50 hon. Members and, I think, eight general secretaries? It argues simply that international commitments into which we have entered ought to be embodied in British law so that they are applied in this country.

Mr. Byers: That will always be a matter for the House to determine. The Government's view is that we have,

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in our own way--through the Employment Relations Act 1999--provided a fair framework for employment legislation. That is the way in which we intend to deal with those matters.

As a result, effectively, of an initiative taken by the UK delegation in Seattle, we believe that there is now a broad-based consensus for an approach that allows the international organisations to reflect on the relationship between poverty, globalisation, labour standards and trade liberalisation. We hope that a consensus can be achieved within the framework that we were able to promote while we were in Seattle, which can ensure that that issue will not be ignored.

Briefly, on China's membership of the WTO, as hon. Members will be aware, just before the Seattle conference began the United States reached an agreement with China about the terms under which the US Administration would agree to Chinese accession.

The European Union has not yet agreed such an arrangement with the Government of China. We expect the EU to begin negotiations some time in the new year with representatives of the Chinese Government. Once we have secured agreement, we can ensure that China can become a member of the WTO. We want that objective to be achieved, but on appropriate terms. Detailed negotiations will have to take place with China to ensure that, as far as the United Kingdom and the European Union are concerned, its membership is on satisfactory terms.

Mr. Curry: Did the American delegation explain how it reconciled its discussions to allow China into the WTO with its preference for labour standards reinforced by trade sanctions?

Mr. Byers: I think that it would have had difficulty reconciling the two, but that is probably best left to representatives of the American Government. I am not going to try to defend that one.

We believe that if the terms are right, it is appropriate for China to be a member of the WTO. If it becomes a full member, the whole dynamics of the organisation will change dramatically. Some of those countries that stand out against labour standards having anything to do with the WTO at the moment may suddenly find that there are some benefits in such standards being included. However, we must be careful. Many of us listening to the debate in Seattle felt that the motive behind the speeches of those who most strongly promoted the inclusion of core labour standards was not to help the conditions of the workers concerned but to protect the domestic market. Sometimes we need to study carefully the reasoning that is being put forward to support that proposal.

I shall draw my remarks to a conclusion as many Back-Bench Members wish to speak. There are those who say that globalisation and trade liberalisation carry much of the blame for any economic crisis that may occur. They see the trends of globalisation and trade liberalisation as innately harmful, bringing benefits only to a handful of multinational companies, widening the gap between the richest and poorest, threatening the environment and undermining social structures. Such people can be found at all stages of human history, casting doubt on progress and pointing to the ills it allegedly brings, while ignoring the benefits. Today, their modern counterparts reject the

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markets and the concept of economic growth. They dismiss profit as greed and see science and technology as a threat rather than as a means of improving people's lives.

There is no doubt that progress pursued blindly and without thought for the consequences carries with it risks and costs. However, by working together we can confound the critics and show that globalisation and trade liberalisation together can be a decisive force for good. In our democratic society, we need to work at convincing our electorate that these changes are to be welcomed rather than to be feared.

Mr. Owen Paterson (North Shropshire): I welcome the Secretary of State's clear belief that the extension of global free trade benefits all. It was hard for those of us who read what was in the press--because of all the smoke, fuss and tear gas--to get a feel for what happened in the meeting. Will the right hon. Gentleman report to the House the consensus in those serious discussions on achieving a worthwhile extension of free trade after the presidential elections in America?

Mr. Byers: I referred to January 2001 as, perhaps, a witching moment when real progress could be made. There may be opportunities, post the American presidential elections, that are not there at the moment. We all appreciate that domestic politics are playing a role within the United States. We have to ensure that, come 2001, the structure is in place to drive forward the trade liberalisation agenda. The message has to be clear throughout the world that if we want prosperity, it comes through free trade and open commerce. Our history shows us that.

I was reading in a newspaper the other day an interesting analysis of what happened in China in the 1400s when a caucus of mandarins managed to convince the emperor that free trade was not a good idea. They began by blocking craftsmen from working in the shipyards because they did not want ships to be built to trade. They then made it a criminal offence to build a three-masted schooner because they were worried about the trade implications.

Mr. Paterson: The article was written by my brother-in-law.

Mr. Byers: There we are. It was by Matt Ridley--a good man. In 1551, it became a capital offence to set sail in a multi-masted ship. As a result, there were four centuries of economic decline in China. [Interruption.] My constituency would love to build the ships.

The lesson and the reality is that throughout our history, in whatever country, free trade has been a bringer of prosperity. In the modern day, the issue is how we can harness the benefits of free trade. The WTO is the body that can do it. Globalisation, through the free flow of foreign direct investments, leads to a more equal distribution of capital, greater competition and productivity, and to wealth creation and growth in employment. Potentially, everyone can be a winner.

Nor does globalisation represent the pursuit of irresponsible gain by large business. The decision to invest capital, technology and human skills is not one that is taken lightly. No one should doubt the immense benefit

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to the global economy brought by the progressive opening up of markets and international trade in the past 50 years. We also know that, if markets are closed, prosperity and growth will be denied. Protectionism anywhere is a threat to prosperity everywhere. We need more trade liberalisation, not less.

Mr. Gordon Prentice (Pendle): The European Union market is currently closed to US beef that has been treated with hormones. How would the new WTO adjudicate in disputes such as those over genetically modified foods, hormone-treated beef or biotechnology? Those matters are incredibly contentious even within countries.

Mr. Byers: I agree that they are contentious. That is why we need a rules-based mechanism that will allow us to achieve our objective. One of the disappointments at the failure to reach a conclusion at Seattle related to issues that could have been part of a broad-based round. They include the whole question of scientific evidence and how the WTO deals with it; consumer choice and labelling, so that people can make genuine choices--this is especially important for the environment; and food safety. That is why we believed that it was important to adopt a comprehensive approach. It is also why a narrow round--as supported by Opposition Members--would not have been successful.

The challenge that we now face is how to move forward within the WTO. The events of Seattle are a defining moment for the WTO. A reformed and modernised WTO can deliver for all the world's people. A broad and comprehensive trade round, early in the 21st century, will play an important part in achieving that objective.


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