Examination of Witnesses (Questions 20
- 39)
TUESDAY 2 NOVEMBER 1999
RT HON
RICHARD CABORN,
MP, MR CHARLES
BRIDGE AND
MR DARRYL
BROWN
20. If we could move back to the Uruguay Round.
What assessment has been made so far of the implementation, and
what still remains to be done on the Uruguay Round
(Mr Caborn) There is continuous assessment being made
on the Uruguay Round. As has already been said, there is some
criticism about the lack of progress in some areas. That is going
to be an area for discussion at Seattle. TRIPs is one, and intellectual
property rights is one there has been some criticism about. The
whole question of tariffs is another area where they believe certain
countries have not been as pro-active as they believe they ought
to have been. There is that continuous assessment in terms of
Uruguay, and it will be part of the discussion on the Seattle
agenda.
21. Given this Committee's obvious main interest,
can I ask you particularly what assessment has been made of costs,
impacts and implications for sustainable development of the Uruguay
Round agreements by the WTO, UN, EU and by ourselves?
(Mr Bridge) The WTO recently produced quite a substantial
piece of work which was attempting to assess the relationship
between trade liberalisation rounds and environmental matters,
and obviously they looked at the Uruguay Round in the context
of the whole of their approach.
Chairman
22. Is that publicly available?
(Mr Bridge) Yes, it is. It was widely commented on
in the FT and other newspapers about a fortnight ago. I am sure
we can send you a copy. As I recall, I think the conclusions were
rather similar to the conclusions which have been the basis for
EU policy; that is to say, the effect of trade liberalisation
on the environment and on sustainable development is not completely
straightforward; it very often is beneficial but there are occasions
on which it can be the opposite. In particular, if there is an
unsustainable activity, or something where prices do not reflect
environmental costs, then openness in trade could in theory magnify
the distortions, so to speak.
Mr Savidge
23. On EU policy, what is your view of the Sustainable
Impact Assessment commissioned by the EU, and has anything similar
been done by any other member or group of members of the WTO?
(Mr Bridge) We have not got the EU Sustainable Impact
Assessment yet. As my colleague, Mr Brown, will explain, that
is all being put in place. We have not got the results of that
yet. As for others, certainly the United States have said they
will conduct open and public assessments of environmental issues
during the course of the Round. There may have been some other
countries which have said so, but I cannot remember which ones,
but certainly the US.
(Mr Caborn) Canada was the other one. I read an article
that Canada was also doing an assessment. We will probably bring
all those together and they will inform the discussion at Seattle.
I think ours is probably the most comprehensive.
(Mr Bridge) I think so, yes, but the proof of the
pudding is in the eating.
24. Does the WTO have any plans to promote a
multilateral environmental review as, some would say, was rather
belatedly done in the OECD discussion; and do we feel it should
do so, and what exactly is the UK doing on this at present?
(Mr Caborn) I do not know whether there is any work
being done. What we would like to have discussed on the agenda
at Seattle is how you get the linkages between the MEAs and the
WTO. I think there is a blur at the edges of what some of the
MEAs are trying to achieve where it is involved in trade and the
rules we have got inside the WTO. I think these are areas where
we have to have some discussion. There may well be areas where
we say if a MEA has certain conditions laid down in it then we
would actually take that out of the operation of the WTO. There
are a number of areas we can both clarify and make more efficient
and more effective MEAs and the running of the WTO, which will
make the two things more compatible. These are areas we have to
discuss at Seattle.
Mr Blizzard
25. I would like to focus in on some of the
mechanics, which strike me as fairly important when negotiations
are going on over three years. Stage one is getting our own Government
policy right. What mechanisms are in place to ensure we have proper
cross-departmental integrated strategy? I believe the Performance
and Innovation Unit in the Cabinet Office is involved. Do you
know what work they are doing on non-trade issues, such as environment?
Do you know what terms of reference the Unit is working to; and
will its report be made publicly available?
(Mr Caborn) We have a Cabinet sub-committee, E(D.P)T,
which we all report back into in our various negotiations so that
the whole of Government is informed. Today I said we have DTI
and DETR here, and DFID are also involved. Indeed, we wrote a
submission and the three Departments submitted a memorandum to
your Committee. We are trying to make sure we have as much joined-up
government as is possible. E(D.P)T is the decision maker in that
sense for Government; it is a Cabinet sub-committee; but the Performance
and Innovation Unit is also looking in the medium-term, after
the negotiations, as to how we apply those policies. We will be
coming to the House before we go to Seattle to make a statement.
As in the normal course of events, we will be reporting back to
the House. Obviously very important committees like your own here
are keeping the executive under scrutiny, and that is absolutely
right; we are here to answer questions and give the views of the
Government; and we are trying to move that into the European Union;
and I think we have been modestly successful with influencing
what will be going from the EU into Seattle. The lines of decision
making in government are reasonable, and informing the general
public and Parliament itself are also in place.
26. You talk about feeding into the European
process, are you confident we will be able to push through our
priorities?
(Mr Caborn) I do not think "push through"
is the right term. We will be negotiating our priorities. We have
got intellectually based arguments which are very compelling which
the EU always accept.
Chairman
27. There is no tit-for-tat stuff?
(Mr Caborn) Absolutely not. You know better than that,
Mr Chairman!
I have only been involved in the last ten weeks
or so, and I have had three or four meetings at the EU, as well
as a number of bilateral meetings. I think there is a general
consensus that we are moving in the right direction. There have
been one or two problems around labour. Surprisingly, there has
been unanimity about environment very quickly. Obviously there
are some areas like subsidy on agriculture which can be a bit
problematic, but we have got agreement on the way forward as far
as the comprehensive agreement is concerned.
28. In terms of competencies, obviously on trade
issues EU competence is straightforward. It is probably less clear
cut in areas such as services and investment. How do we deal with
that question of mixed competencies?
(Mr Caborn) They have the competence on that if it
is inside the WTO, because they have got the competence both in
direct negotiations and ancillary matters as well under 133. The
Commission lead on the negotiations as far as WTO is concerned—that
is their competence—both for direct trade and also related
matters.
(Mr Bridge) There is an important difference, however,
on voting. The Commission speak for the Community as a whole throughout
in the WTO; but on matters which are directly related to Article
133, trade in goods, qualified majority voting applies. In principle
we could be outvoted. In the other areas, services, investment,
intellectual property, it is national or mixed competence. The
Commission retain the right to do the speaking, but it is sometimes
a little more difficult to elaborate a European line because it
has to be agreed by consensus rather than by QMV.
Mr Blizzard
29. Finally from me, do you think the DG on
Trade will have problems with its capacity to implement an integrated
approach to negotiations across the sustainable development agenda,
as indeed required by Article 6 of the post-Amsterdam Treaty?
We discovered in our inquiry into EPI, environmental policy integration,
that there is no sector specific integration strategy required
yet for international trade.
(Mr Caborn) I am not in a position to answer that
question. We can write to you about it if that is a concern you
have.
(Mr Bridge) The question was whether or not the DG
of the Commission has the capacity to carry out?
30. We understood from our previous inquiry
that different sectors have had to come up with strategies. As
yet there is no sector-specific integration strategy for international
trade; yet we are wanting DG Trade to implement an integrated
approach in the negotiations, but it has not got a sector strategy
in place.
(Mr Brown) It is absolutely right what you say. Article
6 of the Amsterdam Treaty requires that environmental protection
requirements are integrated into the definition and implementation
of Community policy, in particular with a view to promoting sustainable
development. I think the EU approach to the Round, which is set
out in a number of papers by the Commission—there are tables
proposed in Geneva at the WTO—could be said to very well
display that integrated approach. It definitely is a step forward
in that respect because the EU's approach to the Round is clearly
in support of sustainable development, and the comprehensive Round
is judged to offer the best balance of benefits in terms of sustainable
development. We have got special focuses in there on trade and
environment; a very strong position on trade and environment and
trade and development and, as the Minister has explained, looking
at other areas like trade and labour. I think you could argue
the EU's approach in terms of current policy formation does represent
a very integrated approach.
Chairman
31. Coming back to that point, do you think
the Trade DG has the capacity to deliver on these fine words?
(Mr Caborn) I honestly cannot answer that. I hear
what the Committee is saying. It is a point we may want to take
on board and write to you about. We will investigate exactly how
they believe they are going to manage that.
Mr Blizzard
32. That would be helpful because the concern
is we have learnt they have not yet got a sector strategy on international
trade.
(Mr Caborn) That is news to me. It is a concern of
the Committee and it is also a concern to myself. If we are going
to go to all these negotiations and get the thing there, and then
we cannot manage it, that would defeat the object.
Chairman
33. The information we have from our own enquiries
into European environmental integrated policy is that it is still
very embryonic. Because of the problems they have had this year
in the Commission and so forth, they have not mainstreamed environmental
policy in the way they hoped to do. Therefore the question comes
back to this point: there are a lot of fine words around but are
they really integrating environmental policy, and can trade really
deliver this integrated approach?
(Mr Bridge) There are regular meetings in Brussels
between the Commission and Member States on all these issues.
In particular, there is an experts meeting on trade and the environment,
which has been meeting once every couple of months or so in recent
times. DGXI, the Environment Directorate, have always been well
plugged into that process. DGI has been in the chair but it has
been very much a double act by the two Directorates. I do not
believe there is a problem about joined-upness on that particular
point. Perhaps your point about capacity is more about whether
they have the resources to do the negotiation. I must say, I would
not like to commit myself to saying anything very much on that.
(Mr Caborn) On the Sustainable Impact Assessment,
is that going out to contract or is that being done inhouse?
(Mr Bridge) It went out to contract.
34. That is an external consultant?
(Mr Bridge) British, as it happens.
Chairman: Manchester University. Interesting.
Joan Walley
35. Before we move on to the environmental agenda,
Mr Blizzard asked you about the Performance and Innovation Unit
in the Cabinet Office—are you saying that report will be
publicly available before the negotiation in Seattle starts?
(Mr Caborn) I do not know.
(Mr Bridge) It is correct the final report by the
PIU is made publicly available fairly shortly, but this will not
be ready until the spring some time.
36. My concern for raising this is, amongst
the NGOs and certainly amongst some of the parliamentarians concerned
about Seattle, if not so much government ministers, there is concern
there should be absolute transparency. It seems to me to be a
matter of concern that if the British Government is actually commissioning
this report, it would be enormously helpful for its conclusions
to be publicly available, at least perhaps to parliamentarians,
at the earliest possible opportunity; because that clearly can
play a key part in influencing subsequent discussion that takes
place inside Europe.
(Mr Bridge) It will be available at a pretty early
stage of the Seattle Round. Nothing moves very fast in the world
of trade negotiations. If it is available in the spring, I think
it is likely, whatever happens in Seattle, nothing very substantial
will have happened in the Round.
(Mr Caborn) I hear the points you make and we will
take those back. We are not controlling that. It is a Cabinet
Office. The Performance and Innovation Unit is looking at how
the implementation, medium to long-term, is going to be affected
as far as government is concerned. How much bearing that has on
the setting of the agenda at Seattle, I do not know. I do not
think it will have that much bearing, but I hear what you say.
I think what will guide it much more will be the Environmental
Impact Assessment done by the EU, by Canada and by the US. That
is the type of thing to guide the setting of the agenda at Seattle
probably more than the implementation of the PIU, which is cross-cutting
the departments basically.
37. I am grateful for that, because I think
there are issues which relate to the DTI having the competence
in terms of the UK Government, in terms of what happens within
the EU, in terms of what happens then subsequently at Seattle—as
opposed to the other input there will be from DETR in respect
of investment policies and sustainability issues as well. My next
question is, how that then has a bearing on the work of the green
ministers forum, and what role that will take in trying to coordinate
a fundamental agenda for sustainability right at the heart of
whatever goes forward at Seattle?
(Mr Caborn) I think that is the ongoing agenda, which
is interesting. It is an integral part of how we do business.
It is not a bolt-on any more. It is part of the culture. There
is a continued assessment going on in terms of the impact on the
environment. That is why the EU is doing the assessment. We have
taken the approach in negotiations, both in terms of the EU and
moving it on to the Seattle agenda. One thing I must make clear,
it is not the WTO's sole responsibility for the environment. What
we are talking about is one part of that. How does trade affect
the environment and vice-versa. That is why we are quite clear
a) we have to have an Environmental Impact Assessment, and that
is what we are doing; but b), in terms of the day-to-day operation
of agreements, we want to do that through the MEAs and the proper
linkages into the agreements and the rules of the WTO. We are
not the vehicle for delivering the sustainable environment across
the globe per se. The WTO is there as a trade organisation,
which the environment has an impact upon. You cannot keep loading
everything on to trade, whether it is labour, child labour, environment
or whatever; trade is just not that vehicle; it is an important
part and the linkages have to be made.
38. I think it is those linkages we want to
turn to now. In the light of comments you made earlier on, that
the world moves on, I think those of us concerned about sustainability
do not want the role to move on at such a rate it actually destroys
itself because we have not made those linkages between trade and
environment. Could I just ask you specifically: we have had evidence
from the Royal Institute of International Affairs that actually
set out options to us for clarifying the relationship between
what was the GATT and the Multilateral Environmental Agreements.
Could I ask you what your preferred options are for addressing
the EU's stated objective of clarifying the relationship between
MEAs and the disciplines of the multilateral trading system? Do
you think it could be done, for example, through amendments to
GATT Article XX, which you referred to earlier on; or that it
should be a WTO declaration; or a separate WTO agreement. If we
are all agreed about linkages, surely it is how we make those
linkages?
(Mr Caborn) It is and it was mentioned in our submissions
to you and I think it was paragraph 18, "'Prospects for the
Environment in the Millennium Round'", and this was organised
by the Royal Institute of International Affairs and that was in
July 1999.
(Mr Bridge) What happened in July was that Chatham
House had a seminar at which a paper was first, I think, made
public which was submitted to you as a memorandum for this inquiry
by Mr Brack, Duncan Brack.
39. Really it is the nuts and bolts of how we
start doing what everybody agrees should be done, how we make
those linkages.
(Mr Caborn) I think if we discuss paragraph 11 of
our memorandum which we submitted to you, it is saying, "There
are a growing number of multilateral environmental agreements,
some of which include provisions for trade related measures",
and, as I say, there are roughly about 200 of those, of which
20, I think, or about that, have trade-related issues in them.
"The Government believes that MEAs are the best way to tackle
international environmental problems. WTO rules should not undermine
non-discriminatory, non-protectionist and proportionate trade
measures being taken in implementation of existing MEAs or negotiation
of future ones. At the same time, trade measures taken within
MEAs should only be to the extent necessary as part of an integrated
policy package, and should not be used to introduce new forms
of protectionism."
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