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4.24 pm
Mr. David Curry (Skipton and Ripon): Those who argue against the virtues of free trade should consider the opposite, which has been tried for a long period and has demonstrably not worked. I happen to be the director of an organisation that seeks to help countries that were within the Soviet orbit and are now democracies to build capacity, democratic institutions, a neutral police force and a neutral civil service. One of the things that they all seek to do is join the World Trade Organisation to establish free trade because they see it as a buttress of the democratic process. The creation of open markets is seen as part and parcel of that process.
Therefore, in talking about free trade, let us not think that we are talking merely about something that represents the self-interest of multinational corporations and that it is remote from the way people lead their lives. There is a close link between being able to choose what we buy and being able to choose whom we vote for. We should keep those two things closely in correlation.
It has been an interesting debate. The right hon. Member for Chesterfield (Mr. Benn) talked about the problems of the global economy and multinationals and then praised the protesters. Of course, the protesters were brought together by the exploitation of the industry that perhaps represents global technology at its most efficient: the internet and e-mail. We should call it the Microsoft soft round if we were to acknowledge the role that Mr. Bill Gates is likely to play in the final outcome. Here is a global industry that has empowered the individual. The individual with a computer and a terminal has never been so powerful, able as he is to participate so effectively in world affairs. Global business is being matched by the global lobby, so the balance is maintained but in a different dimension.
I still think that the argument for free trade is overwhelming because it has been the motor of economic growth since the war. The growth in trade has run ahead of the growth of the economies of all participating members. It is a moral as well as a material argument. Cutting trade barriers is cutting taxes cut for every citizen.
The WTO is obviously the victim of its own success. It is being asked to deal with problems that are not its to deal with; they are the business of other bodies. That is not to say that we should not recognise those other concerns. The argument is not about whether they are legitimate, but about the correct way in which to progress those concerns. What is the mechanism that works without destroying what we have already?
A trade body cannot deal and should not be asked to deal with labour conditions. It should not be asked to deal with the environment. If we are going to tackle those issues--frankly, the WTO neither creates nor solves environmental problems--we need effective international bodies. The WTO should be the model for those bodies, not the model to be demolished.
We have to recognise--as the Secretary of State for International Development and my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) have said--that issues are interrelated. For example, the great Kyoto negotiations took place some years ago. I have a strong suspicion that my right hon. Friend was at those as well. He appears to have a particular entree to such negotiations. It is a particular predilection, but it is one that he has so I can understand his wishing to pursue it.
The Kyoto agreement has not yet been ratified. It would be absurd to seek an agreement on a new world trade round that made it impossible to implement the Kyoto agreement. That is what we mean by the establishment of relationships between separate processes, but it is important that Government should attribute the same importance to those different processes, so that they are not seen to regard one as mandatory and another as discretionary.
Again, the concerns about labour market conditions and the environment are important, but, as my right hon. Friend the Member for Suffolk, Coastal has said, labelling, which gives the consumer a choice, is one of the ways in which to deal with those concerns. If developing countries are not satisfied with what we have at the moment, they will need a new round as well. If they like what we have at the moment, that is fine. If the exploitation that the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) talked about really is a problem, surely that will indicate the urgency of a new world trade round, not that we should withdraw from the structure that seeks to create a framework of regulation.
Let us remember that Europe has proposed duty-free entry for industrial goods from the least developed countries in the face of hostility from the United States. It has to be repeated: the choice is not between global capitalism and a village economy that is based on three acres and a cow; the choice is between the existence of an international trade framework and the non-existence of such a framework, whereby the richest and most powerful world corporations will be even more powerful than they are now.
It is the job of politicians to try to promote globalisation upwards so that if business is globalising, we develop political frameworks that are capable of operating at the multinational level. We should seek also to push down to people political democratic responsibility so that they are able to deal with their own affairs. Globalisation is one phenomenon of the modern world, but atomisation--
pushing down responsibility to, for example, a school board or to a community group, perhaps to administer a regeneration programme--is another, complementary one.
At Seattle, the real crisis was provoked by the inexcusable behaviour of the United States in insisting not only on provisions on labour conditions, but on conditions backed by trade sanctions. It is worth remembering that it was the United States that called for the new round, that designated Seattle and that decided on the high-profile presidential launch. If the United States decided that the interests of protectionist trade unions mattered more than other considerations, it might have been better if it had made that choice earlier. We have been there before, and we know the destructiveness of such demands.
Three years ago, at the previous WTO ministerial meeting, in Singapore, we heard exactly the same row, over exactly the same issue, and it took five days to resolve. It was resolved only because a group of developed and developing countries--including India and Pakistan, with South Africa acting as go-between--managed to construct a compromise that dropped the demand for trade sanctions to back rules on labour market behaviour.
President Clinton has dropped the demand, which itself was another example of destructive high-level bombing with inadequate identification of the target. It is difficult to appreciate the logic in, for example, negotiating with China on WTO entry but saying that sanctions to back labour market regulation are an indispensable United States demand. The statements are incompatible and are simply an invitation to Congress to refuse to ratify Chinese WTO membership. It is a regrettable incoherence in the American position.
My hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) mentioned agriculture. Agriculture is not merely the dog that did not bark in the negotiations; it is the dog that does not need to bark in such negotiations. The future of agricultural reform was prescribed in the Uruguay round of negotiations--not only the direction of agricultural reform but the reform timetable has been prescribed in those negotiations.
The matters that the Government agreed at the most recent round on common agricultural policy reforms were more academic than important. However badly the Prime Minister behaves, the European Union is locked into those negotiations and has no option but to reform. The European Union knows that if it wants to participate in world food markets, the time is limited in which it may do so with the aid of subsidy. Reform is an inescapable part of those negotiations, which have already been signed and sealed, and does not depend on the Seattle process to continue.
In earlier negotiations President Reagan made the same extreme demands, which were dealt with. President Clinton is now repeating the demands, although it is perhaps worth noticing that, for the past few years, he has been hurling money at American farmers in response to some of the crises in American agriculture.
We therefore have the familiar ritual between the Europeans and Americans. To avoid too much focus on agriculture, the European Union tables lots of other demands, which are meritorious in their own right, as a form of electronic interdiction; to avoid those demands, the United States and the Cairns group table offers that the European Union finds attractive and important.
The European Union is tempted by, for example, proposals addressing important issues such as intellectual property. Anti-dumping is another important issue which is used abusively, particularly by the United States.
The demonstrators were often arguing against each other. However much the trade unions ascribed to themselves the right to prescribe what the developing world wanted, they were arguing against the stated interests of the developing world.
There is a real moral choice in the matter. What is the moral response to a situation in which a child in India is making footballs to pay for food for the family or for education? How many people in India, perhaps working in airline ticket processing offices, come from families who owe their start to practices that we should not wish to have in our own country and should like to see ended in India? Addressing those issues will involve a moral choice, and not a simplistic one. As the Secretary of State for International Development said, the danger is that we will push developing countries further into poverty by blocking the one avenue that they have to exploit a resource they have--currently, cheap labour is a resource that they have.
Targeting globalisation seems to be politically easy, but is intellectually and economically misplaced. Globalisation is a much smaller cause of job loss than is technical change, deregulation, competition and changing consumer tastes. The response to globalisation should entail a much greater emphasis on training and education. Labour standards, like birth rates, are largely a function of economic development. Trade sanctions cannot effectively improve labour standards.
I do not think that there are irreconcilable differences. The WTO is now on its ninth round, and there have been crises before. However, the round must be launched as soon as possible. Although, realistically, we shall probably have to wait for the new American President to be in office before the new round commences, reform should not depend on that.
There are various interesting reform proposals, such as opening up the disputes procedure, which was an improvement on previous mechanisms. We now have a system whereby disputes are brought into a forum that provides a sanctioned retaliation process. Previously, the retaliation process was wild.
The disadvantage is that the current system is a prism that tends to focus debates on, for example, bananas--which the hon. Member for Hackney, North and Stoke Newington was talking about--or on beef hormones, which my right hon. Friend the Member for Suffolk, Coastal dealt with. We have at least to ensure that, in those arguments, perhaps non-governmental organisations are able to make representations so that the balance of argument may be weighed more transparently, and perhaps also so that a greater range of arguments is considered in the debate.
I sympathise with the view expressed by my right hon. Friend the Member for Suffolk, Coastal that perhaps a parliamentary scrutiny body could at least enable the WTO to explain and make its case more effectively.
I hope that the Government will do two things, the first of which is to argue the moral case for free trade. The Government often show a marked reluctance to argue their case. Although they say that they are intellectually convinced on an issue, they do not seem to want to
convince anyone else of it. The Secretary of State for International Development is an exception to that. I noticed that the recent problem with the euro was dealt with by having the Minister of State, Foreign and Commonwealth Office, the hon. Member for Leicester, East (Mr. Vaz), trundle around on a train or on a bus, whereas the Chancellor of the Exchequer remained in absolute Trappist silence throughout. There has not always been such silence.
Although the current argument on Anglo-French defence has much merit in it, the running has been made entirely by opponents of joint defence. The Government do not seem to want to get out and argue their case. World trade is more important than either of those issues; the Government must therefore get out and argue their case.
Secondly, the Government must recognise the validity of the concerns that have been expressed, at least when those concerns are not simply protectionism masquerading as altruism. However, they have to pursue the matters in appropriate bodies, with sensibly established relationships and structure. That is where process really is important.
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