Examination of Witness (Questions 280
- 299)
WEDNESDAY 3 MAY 2000 (Afternoon Sitting)
MS JOYCE
QUIN
280. So would you have made an assessment of
the possible impact on our food sector of the elimination of export
subsidies since clearly to remove them immediately would have
some impact and therefore it would be prudent to plan such a process?
(Ms Quin) Yes. Certainly we feel that simply reducing
export support without any corresponding reform of the price and
production support regimes in the European Union will harm not
just our food industry but also the food industry in other countries.
And one of the things that we have been trying to do with our
allies is get a better recognition of this issue, that we are
not here just talking about self-contained agricultural subsidies,
we are talking about subsidies which have a very important knock-on
effect in terms of the food industry more generally and the economy
more generally because a lot of wider jobs are connected. We have
said to the Commission that in terms of their desire on budgetary
grounds to reduce the cost of export subsidies that we are in
sympathy with their aims but, firstly, we do not want to see any
United Kingdom industries targeted unfairly in this reduction
of export subsidies and, secondly, we do want to see it as part
and parcel of a wider agricultural reform process.
281. Would you be able to share with us any
analysis that has been made of the impact of the removal of export
subsidies on UK producers?
(Ms Quin) I could certainly look at what information
we have in MAFF with a view to sending it to members of the Committee.
I know we have had representations made about this and we have
responded to these in various ways.
282. Tariff reductions, again it would be consistent
with the Government's overall position that we would support greater
tariff reductions than are indicated in the initial EU negotiating
position.
(Ms Quin) We certainly want to see a reduction in
tariffs. We also want to see a situation, which again I know Clare
Short has explained, about particularly arrangements which help
the least developed countries. The phrase that is used is giving
"duty free access" to essentially all products from
the least developed countries and we are certainly amongst those
countries who are pushing for a more generous settlement in this
respect.
283. Would you be thinking of differential settlement
between different nations so that certain countries receive more
favourable tariff treatment—and obviously this happens anyway
but on a selective basis—perhaps on a broader basis than
is currently there?
(Ms Quin) The question goes a little bit wider than
my own brief so perhaps I should not pontificate too authoritatively
about it. I would say that we are certainly open to measures which
help the least developed countries in particular. Some of those
least developed countries will already benefit from good arrangements
perhaps because they are members of the ACP, but not all LDCs
are members of the ACP and we would certainly be wanting those
countries to benefit as well.
284. Would you also recognise that there are
perhaps some sectors where tariff reductions would cause less
difficulty than others? Historically virtually every country with
a sugar industry, and most countries do, have chosen to protect
this industry extremely vigorously. That may be one example but
there may be others where protected barriers appear to be commonplace
around the world and their immediate elimination would cause dramatic
harm. Are there some where we ought to be particularly focusing
our attention on reducing tariffs and others where we ought to
be rather more permissive and allow them to remain?
(Ms Quin) I think again in terms of LDCs the old formula
is—
285. I was thinking more broadly than LDCs.
(Ms Quin) Even in terms of countries more generally
our view is in favour of tariff reductions. We cannot go, and
are not seeking to go, on a different route from the EU position
as a whole but we are seeking within the European Union to look
at particular areas where protection in the European Union is
particularly high. Sugar is a good example in that (I think I
am right in saying, certainly the last time I looked at it) the
EU sugar price was something like four times the world sugar price.
There is a huge discrepancy.
286. It is very hard to get a proper world sugar
price.
(Ms Quin) That is a very fair comment, of course.
I do accept that point.
287. It tends to be the dumped price.
(Ms Quin) Nevertheless, it has been a sector where
on the face of it the difference in price has been particularly
sharp. We need to look at these areas. There are arrangements
anyway in WTO to look at the tariff peaks and seek to reduce those.
288. Do you think the word "multifunctionality"
is really an intellectualisation of protectionism?
(Ms Quin) No, I do not, but it is often in danger
of being seen that way. I strongly do not see it that way myself.
To me, multifunctionality seems to be expressing a fairly obvious
truth that agriculture does fulfil a variety of roles in terms
of not just food production but also the environment and also
rural economies.
289. Could it not be said of many things in
life? If I ran a ship building business, I would say that was
multifunctional. It provides a lot of employment to people. It
also provides a particular mode of transport, which is very important
to people around the world. There are always arguments you can
present, that almost any economic activity has an importance beyond
the mere act itself.
(Ms Quin) Yes, you can, but in agriculture, perhaps
particularly arising from recent public concerns about the quality
of the environment, about the treatment of animals, about the
methods of food production, there are some issues there which
are, if not unique to agriculture, particularly marked in the
case of agriculture.
290. Do you think perhaps then that we have
been explaining our argument poorly? This is because it clearly
is not appreciated by all and is viewed, as you have conceded,
with some suspicion. Perhaps we need to change the focus somewhat,
so that we explain more clearly the objectives we are seeking,
rather than emphasise the broad strategic statement that tends
to be made now, as you have repeated it, which is that agriculture
has a variety of different purposes; and instead to focus on those
purposes and say what it is we are prepared to do to support them.
(Ms Quin) Yes. That is a fair point. Certainly it
goes back to the response I gave you earlier: about talking to
countries about our objectives and explaining them, where we are
perhaps in a good position to do so, in a non-protectionist way;
that some of the issues we are talking about are related to the
quality of life for people generally, and also related to environmental
benefits which are not just local and regional but actually European
and global.
291. If you take the environment as a very good
example, would not the best approach be—rather than merely
to make a statement which must be a truism, which is that agriculture
clearly contributes to the quality of our environment—but
instead to say that it is possible to accommodate the environmental
objectives we have, and other countries have, within green box
measures, and suggest how that can be done? Is it not perhaps
the suspicion that these general phrases of "protection of
the environment", "animal welfare" is another one,
"multi-functionality", are produced without necessarily
pinning down precisely how we seek to meet the objectives involved?
(Ms Quin) Well, as far as the green box is concerned,
there is general agreement now that environmental measures are
part of that system. I think it is more difficult to get animal
welfare measures included in the green box, but in terms of the
environment progress has already been made. However, we need to
combine our concern about the environment with some of the specific
proposals, which we were going over a few minutes ago, in terms
of more generous access for countries to our markets, so that
we do not seem to be putting the environmental argument simply
in isolation, where I think it is more likely to be misconstrued
as a protectionist argument.
Mr Paterson: Picking up on Mark's point, I was
very struck in America by the willingness of most Americans to
acknowledge that the environment and tourism, etcetera, and maintenance
of rural communities, is a major output of agriculture. As long
as we do not damage their agricultural environment by export subsidies,
they appear to be more than happy for us to pile on quite substantial
payments into the green box. Even animal welfare came into this.
What proportion of farm incomes do you think you could get away
with, in a liberalised world trade situation, from the green box?
Mr Todd: How long is a piece of string!
Mr Paterson
292. British Government's best estimate.
(Ms Quin) I do not think there is a British Government
estimate of this particular thing. Obviously farming is an economic
activity and we want that to be able to operate in a normal market
environment as far as possible. However, we do recognise these
other elements of agriculture as well and that, therefore, there
is room within a green box structure to recognise these. Now,
whether we are talking about similar levels of support to agriculture
continuing in the future, that we have already seen in the European
Union overall, or whether we are talking about reduced—I
would say probably some reduction—but there will still be
a significant level of public support in the foreseeable future,
certainly during at least a transition period.
Chairman
293. The Japanese Ambassador in Geneva presented
us with a drawing of multifunctionality. Perhaps part of the competition
for the new Permanent Secretary of MAFF could be to produce his
own drawing of multifunctionality.
(Ms Quin) I will take that message back.
The Committee suspended from 5.27 pm to 5.33
pm for a division in the House.
Chairman: We are now quorate. Mr Drew is going
to take us on to the subject of animal welfare.
Mr Drew: I was surprised at Owen having said
that the Americans were somewhat willing to see animal welfare,
as an issue, go in the green box. I would see it as a much more
stark issue than that. One, they see it as pure protectionism,
whenever we wish to introduce it into discussions; but, secondly,
blinding indifference. I will just paint a picture. We have a
very strong and effective animal welfare lobby. That is the most
important issue that we can be taking forward in the discussions,
yet the Americans see this as blindingly unimportant. If it is
brought forward, they think there is another agenda, ie, a protectionist
agenda. I wonder how you try to bring those two completely contrasting
positions together because you obviously have to in some respects.
Chairman
294. I think I am right in saying that there
is one specific reference to the WTO Round in the Government's
paper on agriculture, which came out about a month ago, which
was a reference to animal welfare.
(Ms Quin) I do recognise the difficulties of making
an argument in the WTO in relation to animal welfare. It is extremely
difficult to reconcile our United Kingdom position with the position
of the Americans and others. Also, although we have had some support
for it within the European Union—the words "animal
welfare" appeared in the text of the mandate, which the General
Affairs Council agreed—nonetheless, even within the European
Union, there are different attitudes towards animal welfare. I
personally do not think this is an issue that the United Kingdom
can somehow succeed in on its own. Therefore, the need to try
and explain the position and build up support is tremendously
important. There are two ways in which I would like to signal
to you that seem to me to be important in this respect. Certainly
I know that my colleague, Elliot Morley, will be attending a World
Society for the Protection of Animals Conference in June in London,
and he will be giving a key note speech there. That will be one
occasion in which some contacts can be made on the importance
of animal welfare in the world trade context. The other area is
not really one where, as a United Kingdom Government, we would
be involved, but I am very much aware of the importance of lobbying
and presenting the arguments in this respect. If I can remind
you, Chairman, that you and I were both familiar with the Euro
Group for Animal Welfare in the European Parliament, which was
one of the most effective inter-groups. Although the United Kingdom
MEPs were seen to be in the vanguard of animal welfare, we did
have active members from other countries and other parties. It
was actually quite a good forum for building up a consensus on
these issues. That is important also in terms of continuing to
bring the matter to the attention of the European Commission.
This is because through such devices as Question Time in the European
Parliament, if Members are bringing up animal welfare concerns
and saying they feel those are important issues to address in
terms of the WTO negotiations, it can again help to create a little
bit of pressure. We know that it is an important issue in its
own right but we also, of course, know that it is a very important
issue in terms of the costs that our own producers face, and in
certain sectors that producers across the European Union face
in comparison to costs elsewhere.
Mr Drew
295. Let us imagine that the Americans, as Owen
suggested, may be more willing than I felt they were, the way
I looked at it. Let us suppose they say, "Yes, we can understand
the logic of putting this into the green box." How would
that actually work in terms of the mechanism and who would pay
for it?
(Ms Quin) Again, those are important questions. We
have not a finalised Government view on this. In that respect,
the work that the Committee is doing will, I hope, help inform
our deliberations across Government as we work towards, hopefully,
the launch of a new round. Certainly Nick Brown is interested
in exploring the possibilities of having animal welfare payments
in a green box system but there is a difficulty in how these are
defined. This is because obviously they are, to a certain extent,
related to production and, therefore, some would argue that they
were blue box rather than green box. We have to look at what kind
of measures could be brought in under this heading. I have not
got a definite answer to give to you today on that. Obviously
it is much better for payments to be definable as green box payments
and to be seen as non-trade distorting. That is really what we
have to look at. There are other aspects, I suppose, of the animal
welfare issue, which also need to be taken into account, but also
have complexities attached to them. The issue of labelling, which
I know the Committee has focused on, is an important one; and
which I think can make a useful contribution to making consumers
aware of animal welfare standards; but nonetheless is quite complicated
in the WTO context. This is partly because it is the technical
barriers to trade routes that you have to go down; and partly
because it is possible for people to come up with all kinds of
other things they want on labels as well; and, therefore, the
debate can be quite a wide ranging one on the labelling question.
Chairman
296. Could I ask you one question just to crystallise.
There is a whole series of issues, where there have been demands
at various times, which should be associated with the WTO talks.
Animal welfare is one, which British Government has mentioned
specifically, and which comes up quite frequently in the United
Kingdom. One could argue that one of the reasons why Seattle fell
out was because of President Clinton's insistence that labour
market conditions should be part of the round. Other people talk
about environmental conditions. There are two ways, are there
not, of going about this? Either you say we have a world trade
round, which up to now has stood autonomously, but we must now
bring Britain into consideration with these other elements; or
the second way is to say: it has worked autonomously, it has been
successful, and we have developed a series of parallel institutions.
What we really need to do is to make sure that parallel bodies
begin to acquire some of the authority which the WTO has had,
but let us not compromise the WTO's integrity by attaching many
things to it so that it is incapable of working as a rules-based
system. Given those two—and I realise it is a simplification
but in broad terms it is a justification—of those two sorts
of pieces of geometry, which commends itself to you?
(Ms Quin) I suppose I am reluctant to see the WTO
become overburdened with a lot of other considerations, particularly
in cases where other bodies exist to deal with these, but the
other bodies and the WTO cannot be hermetically sealed from each
other. Therefore, the deliberations in those bodies, particularly
the ILO, for example, need to somehow inform the discussions in
the WTO. I certainly would not want the WTO to start subsuming
a lot of detailed work, which really needs to be done by different
experts in different fora. In terms of animal welfare, of course,
there is not really a world organisation that kind of corresponds
to that, so it is hard to see that being dealt with other than
as a non-trade concern, which nonetheless the WTO should look
at.
Mr Drew
297. If I can look at one specific problem which
relates to animal welfare, but would become certainly a very live
issue if the WTO made no moves at all with regard to animal welfare,
that is the issue of battery hens. I wonder, looking ahead, not
putting you too much on the spot, let us say animal welfare does
not figure apart from, in some limited way, within the green box
of individual countries' responsibility. The Directive is to move
towards battery-free hens by 2005. Is there any possibility, if
the WTO does not pick up this issue, that there could be an attempt
to rescind that decision and say, "This is purely of national
importance", and there is no international attempt to draw
these matters together? Where would that leave the British Government?
(Ms Quin) I think I am right in saying that the final
implementation of the Battery Hens Directive is not actually until
2012, is it?
298. The importance is that if you got it into
the round now, the country would not be moving in that direction,
would it?
(Ms Quin) Well, because it is a long transition period
anyway, and because within that time poultry production will be
investing in new equipment, it is still possible to respect the
terms of the Battery Hens Directive. I think probably at this
stage I would prefer not to speculate as to whether it would ever
be abandoned at some stage.
299. It identifies the specifics in terms of
a particular problem that would arise, unless there was some movement
on the animal welfare aspect.
(Ms Quin) It is an important aspect to put into the
negotiations to say that, "Look, as result of public pressure—not
as a result of protectionism but as a result of public pressure
and concern about animal welfare issues—the Europe Union
is moving down this route. Therefore, this is why we attach importance
to animal welfare as being part of the round." That is a
very valid approach to make. But, you know, there is a lot of
public support behind the Battery Hens Directive and, therefore,
I think on that basis, in terms of public support, it would be
difficult to change direction. However, I was very struck by the
evidence that has been given to you so far during this inquiry
from a range of people, including the animal welfare organisations,
saying that at the very least we should be looking at European
Union measures, not distinctly national measures, and that we
should do our very best to ensure that these issues are raised
in the wider international context.
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