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Mr. Alan Simpson: I welcome the hon. Gentleman's reference to equity and accountability in the negotiation process, wherever it is. Would he apply that also to the position of the European Union delegation? The elected members who went there as part of Europe's delegation were out-manoeuvred by the Commissioner, who was not elected by anyone. It is like a bizarre game of football in which the team that has won 15-0 is told by the referee that it has lost because he has put a bet on the other side. Does the hon. Gentleman agree that strengthening the lines of accountability should apply to the elected representatives of the United Kingdom Parliament as well?
Mr. Streeter: I have a lot of sympathy with the hon. Gentleman's point--I think that he is right. I understand that Mr. Lamy behaved in a way that was not entirely helpful, and we need to look at that.
Does the Secretary of State agree that building the capacity of developing nations and reforming the procedures of the WTO are the two most urgent tasks? If she has any specific proposals, I should be glad to hear them. Does the right hon. Lady share my concerns about the article in the Financial Times to which the hon. Member for Putney (Mr. Colman) referred? Mike Moore, the director general, is calling for a new round of talks "as soon as possible". Does she agree that although it is vital that nothing should stand in the way of further talks,
we should, at the same time, focus on capacity building and reforming the WTO. Does she also agree that the United States presidential election should not hold up the process of capacity building and reform of the WTO?
The benefit of hindsight is admittedly helpful, but will the right hon. Lady reflect on the wisdom of calling for such a comprehensive round? Was not a large part of the failure the fact that there were too many objectives at Seattle? Was it not too ambitious a project? Did we reach too far and fall over? Is there not a case for having more limited, realistic objectives and making steady progress, rather than trying to do everything and achieving nothing? I am talking not about a narrow round, but about a realistic round.
The Secretary of State for International Development (Clare Short):
If anything good came of the mess at Seattle, it was the wake-up call to people in politics to discuss more openly what globalisation is, what it means and how we should manage it. There has been a lag in the political debate. I agree with the hon. Member for South-West Devon (Mr. Streeter) that we face massive historical change that requires change in our political institutions. Much of our sovereignty can no longer be exercised at home alone. We must be willing to pool sovereignty in international agreements so that we may regulate and manage the wealth that comes from globalisation. Globalisation could be used to benefit people, or could prove destructive to the world.
Globalisation is real. It is part of history, just as industrialisation was. Blake wrote poems saying that industrialisation was a bad idea, and we all still sing his hymn. In reality, however, it happened, and it generated wealth. We simply had to manage it. The very origins of the political tradition from which I come and which I represent lay in the wealth generated by industrialisation. The squalor and inequality of our cities meant that we had to organise and to use democracy and the state locally and nationally to ensure that the wealth generated by industrialisation could be shared to uplift all the people. The same challenge faces us today over the wealth being generated by globalisation. The difference is that the challenge is world wide.
Massive new wealth is being generated, but one in five humans live in abject poverty. The challenge before our generation is to ensure that wealth is used to lift up that fifth of humanity by establishing basic, decent standards for all. The wealth gives us an opportunity.
To those of my hon. Friends who doubt that, I must say that I understand their worry about the rapid change that is taking place, but I plead with them to look at reality. The fastest reduction of poverty for the largest number of people in the whole of human history has resulted from rapid economic growth in east Asia over the past 30 years. That happened because inward investment was attracted from multinational capital, which brings with it knowledge and technology. That is how we must harness those things: by attracting investment to create opportunities to export and trade that will grow economies rapidly. That lifts up poor people as well as providing for investment in the education of the people.
There were some deficiencies in how that happened--corruption among them--which led to the east Asian collapse. There are defects in the model, but properly organised trade and investment are major instruments for massively reducing poverty in the world. Our role is to shape them to achieve our objective. For my hon. Friends on the left, I must add that history also shows what happened when the world last went in for protectionism. In trying to protect economies from change, the world threw itself into a terrible recession and depression that created fascism and world war.
The general agreement on tariffs and trade was born out of that experience as we tried to link the world together, opening trade to build a better future. My right hon. Friend the Secretary of State for Trade and Industry tells me that the first of the nine rounds of talks--organised, of course, by a Labour Government--was the Torquay round.
Mr. Harry Barnes (North-East Derbyshire):
Should not a distinction be made on where free trade should take place? Countries such as those in Africa obviously need free trade into the western world, and the developments in the European Union of which we have heard are very welcome. But such countries sometimes need to protect themselves against trade coming from western countries that would destroy their economies without allowing them to build up. They need buffer agreements so that they can work together on the sale of cocoa and coffee--the equivalent of the operations of the Organisation of Petroleum Exporting Countries. That way, they could sell their products better within the western world. It is not a matter of being against free trade; the argument is about where it is appropriate, and about protection for the third world.
Clare Short:
History says that my hon. Friend's thesis, which is reasonable in itself, is not right. Many African countries tried to develop behind protectionist barriers. They had very inefficient, expensive and highly subsidised local industries and they paid lousy prices for local crops to the very poor people in their rural areas. Their economies did not grow, but their population grew and poverty grew invincibly. Those who point to that sort of failure and say that it is a result of free trade are misreading economics and history.
Member countries need to discuss these issues more and to take our publics with us, because many people have become genuinely confused. We need to go back over our history to see what it teaches us.
The failure in Seattle was partly due to the success of the World Trade Organisation, which is only five years old. Ironically, that was the first time that trade talks have
been attacked. The WTO is the most democratic body that ever met to try to reach agreement on trade in the world. The general agreement on tariffs and trade was always dominated by the big, rich countries; the WTO is a rules-based membership organisation.
To those of my hon. Friends who say that the WTO is against the interests of the third world, I say, "Please do not be so arrogant as to tell the third world what is in its interests when country by country has chosen to join." Those countries obviously have decided that it is in their interests. Surely we should respect and honour their opinion and their judgment about their own interests.
We went from a sophisticated, rich-country dominated GATT to the WTO with 135 members and 31 more waiting to join. The procedures did not cope. There was a terrible delay in the appointment of the new director-general, which meant that he did not have time to prepare for the round particularly well. There are major lessons to be learned about the procedures. We must open the organisation up and think about how it can work.It must work by consensus. All the international environmental agreements and so forth must be reached by consensus. We have to get all the countries in the world to agree to move forward, or we cannot do so. We do not have a parliament of the world, which says that we can do all this by majority vote. Therefore it is difficult.
We can have better procedures that help to include people. We can make the process more transparent and debate more thoroughly the preparatory processes in each country, so that Governments arrive at the talks with a more advanced and developed agenda. We need massively more capacity-building for developing countries. However, we have to proceed by consensus--that is the only way.
To those of my hon. Friends who talk as though we are going backwards, I point out that 30 years ago one in four children in the world died before the age of five, but now it is one in 10--even that is disgraceful and we need to make more progress, but it is not true to say that we are going backwards. Thirty years ago, average life expectancy in developing countries was less than 40 and it is now in the 60s.
We need more. We are getting more wealth and we could share it more rapidly. We could have a period of great uplift for the poor of the world. It is not true to say that we have been going backwards; it is a false account of what has been happening.
Because we agree on some of the fundamentals on trade, the hon. Members for Tiverton and Honiton (Mrs. Browning) and for South-West Devon ended up saying that Britain should have fixed it all. We are a pretty good Government and we got a lot of respect in Seattle. We were all there talking to developing countries, talking about the environment and talking to our own non- governmental organisations--I can assure the House that no one was having fun in Seattle and we did not go there for a freebie--but even we cannot make all 135 countries in the WTO, including the United States of America just before an election, do our bidding just like that. We are honoured by the deep respect that those on the Opposition Front Bench obviously have for us, but even we are not capable of quite as much as they appear to think.
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