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Clare Short: I agree with much of what the hon. Gentleman says, but surely we need mutual recognition of multilateral agreements and WTO rules. We should not use the WTO to enforce environmental agreements.

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We must have stronger enforcement systems within environmental agreements; otherwise we will get into terrible trouble.

Dr. Cable: The right hon. Lady is absolutely right. That is the way forward. There must be stronger recognition of multilateral environment agreements. However, there are hard questions to be faced. For example, if there is incompatibility, at what point can trade measures, which exist in the Montreal protocol, legitimately be raised? I raise the matter as a question and I do not have an answer. However, like the right hon. Lady, I recognise that it is a crucial issue. We must return to our constituencies and justify and support the WTO on the basis that it can uphold global and environmental agreements.

I began to touch on the other environmental question, which is what happens if a country is pursuing an environmental process that is unsustainable. That touches on the wider issue of ethics, which several hon. Members have mentioned. We all have ethical standards. Many of our constituents want to buy goods that are made in an environmentally friendly way and feel passionately about that. They want to ensure that ethical standards are applied and that the product does not incorporate genetically modified foods, for example.

We are trying to resolve two principles, and it is difficult to do so. One element is freedom of choice, in which we all believe. The customer must be free to choose what he or she wants to buy. That often involves an ethical dimension. Another element is that we do not want to see protectionism. How will the two principles be reconciled? One approach is labelling and another is that it may be necessary in some cases to introduce trade restrictions. That is a legitimate expression of a society's ethics. The way to deal with the matter is by means of compensation, either in cash or by allowing trade access in other areas, so that in no circumstances can there be an excuse for trade measures.

We are at a dangerous time. There is a real danger that the system will unravel and that all sorts of unhealthy, primeval nationalistic forces could emerge. The one source of encouragement that I derive is that we have been here before. The early 1990s saw a virtual breakdown of the Uruguay round. However, it was patched up. I think that the forces of common sense and internationalism will prevail, but we are at a dangerous time.


Ms Diane Abbott (Hackney, North and Stoke Newington): The recent events in Seattle, although the violence was regrettable, had the virtue of focusing international attention on the activities of the World Trade Organisation.

It is important to understand that the supposed glories and benefits of free trade and the virtues of the WTO are seen in a different light by those who live in one of the third world developing countries which have been on the receiving end of globalisation and free trade.

It is worth reminding the House of the trade developments that we have seen in the past 10 or 20 years. Although we have seen a forward movement towards greater liberalisation and more free trade, the

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developments have not been to the benefit of many of the poorest people in the world. Although trade flows have tripled in recent years, the 48 poorest countries have seen their share of exports decline by half. Generally, the tariffs on their products, which they try to export into industrialised countries, remain high. Although we are all in favour of free trade, the process looks rather different in the third world. It looks rather different in the developing countries. The benign influence of the WTO looks very different from our view of it in the eyes of a country that does not have political muscle and cannot afford a flotilla of expensive lawyers and advisers. That is the position of a country that has come out on the bad end of some WTO decisions.

I shall detain the House by speaking for a few minutes about bananas. The interesting feature is that the issue illustrates all that is wrong with the WTO in the eyes of the developing world. We have heard much about globalisation and how the forward march of free trade cannot be opposed. We have heard also about the benign influence of the WTO and how it will make everyone richer. Even my right hon. Friend the Secretary of State for International Development was saying that free trade is to the benefit of third world countries. Tell that to the eastern Caribbean. Tell that to poor rural producers of bananas.

Over the past 12 months, America has taken a case to the WTO to try to dismantle the special protection which ACP bananas, largely Caribbean bananas, get in European markets. The House may ask, what is wrong with that? What is wrong with America demanding a level playing field? I remind the House that America does not grow any bananas. We all know why America took the case to the WTO. It did so because big American multinationals such as Chiquita have made lavish donations to both Democrat and Republican politicians. Fuelled by that campaign money, and paying off political debts, American negotiators took a case to the WTO that was designed to smash the preferential access that Caribbean banana producers are now given by the European Union market.

Caribbean countries and the ACP are being asked to compete in open markets with multinational producers in south America such as Chiquita, which run plantation-type operations. They pay their workers little or nothing. They contribute nothing to the environment of the community. Small, rural and often family-owned banana producers are being asked to compete with such companies. They cannot do so. Their banana production does not have the economies of scale of the south American plantations. Those involved in the family-run smaller units try to pay themselves a living wage. They do not benefit from a system which enables the big south American producers to pay very low wages. They cannot compete in completely open markets. Up to 90 per cent. of the foreign exchange of some Caribbean countries--for example, Dominica and St. Lucia--is dependent on banana production, when their trade collapses as it will do if the Americans and the WTO get their way, what will the producers do?

I have heard some of my Government Front-Bench colleagues say that they should diversify. Much of the discussion until now about the WTO and free trade has been at the level of theory. I am talking about people's lives and what free trade means to those people. What will banana producers in Dominica, St. Lucia and even Jamaica, although it will not be the country worst affected

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by a collapse in trade, do? How will they diversify? Will they move into computer programming? Will banana producers in Portland, Jamaica or rural parts of St. Lucia diversify in that direction? No. They will diversify into the only other major agriculture cash crop in the Caribbean and south America, and that is drugs.

When politicians and commentators talk about the merits of free trade, they need to work things through to understand what it means in some peoples lives. Many banana producers in the eastern Caribbean are already being forced out of business. In December 1997 the Select Committee on International Development put these issues to Mr. Eglin, the WTO's director of development, he said:

He added:

    "And then the markets do what the markets do."

The markets in the eastern Caribbean and in other banana regions are forcing thousands of people into destitution and poverty. These are people who do not want to be dependent on handouts, charity or goodwill. They simply want to grow their bananas, sell them, make a living,send their children to school and lead a genuinely independent life.

Mr. Gummer: Will the hon. Lady give way?

Ms Abbott: I would not normally stop someone from intervening, but, with respect, I have only a limited amount of time.

The WTO sees itself as operating a neutral system that allows markets to do what markets do. In the specific instance of banana producers in the Caribbean and in many other instances, which I am sure other hon. Members could cite, markets are forcing poor people to ruination.

It does not seem to matter to the WTO that Caribbean countries that are having such a dreadful time because of the threat to their banana industries are, in other respects, examples of the good governance and stable democracy of which we are supposed be in favour. It does not seem to matter that 90 per cent. of their foreign exchange earnings depend on that crop. America has come calling, backed by big multinational money and everything is subservient to that. That is why so many people are angry with the WTO. That is why so many people in the third world are worried about the forward march of globalisation and free trade.

Like a mantra, Ministers, the Opposition and the Liberal Democrat spokesman talk about the glories of free trade. What I want to know is: if free trade is so good, why do not Germany, Japan and America go in for more of it? It is a bit like hard work. One of the mantras of new Labour is that everyone should go out to work. I am an old-fashioned socialist, as the House knows. I always say: if work is so wonderful, why do not rich people do more of it? We cannot for a minute have free trade in exporting rice to Japan. Through all manner of means, the Japanese have protected their rice industry and the communities that depend on it.

As for freely exporting agricultural produce to America and Europe, one of the worst things about the free trade regime that we are asked to applaud this afternoon is that the domestic agricultural industries of small third world

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countries are forced into ruin because of competition from some of the most heavily subsidised agricultural industries in the world: those in the European Union and America. How dare American and European politicians lecture the world on free trade when their agriculture is so heavily subsidised?

Of course free trade is important. Of course, the WTO's role of setting the rules and attempting to have a level playing field is important, but let us not forget that the world operates at the level not just of abstraction and theory, but of real people and their lives. If the House could talk to some of the poor rural people in the Caribbean to whom I have talked about how they see the WTO's activities, we would not hear the unthinking praise of free trade that we have.

Something can be gained from the collapse of the Seattle round. All sides should come to the table genuinely to ensure that the WTO empowers poorer and developing countries, to bring transparency to its activities and, above all, to find a way and framework in which the issues of poverty reduction, development and genuine equality in the world order can be brought to bear in the sterile workings of the WTO.

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