Examination of Witnesses (Questions 40
- 55)
TUESDAY 2 NOVEMBER 1999
RT HON
RICHARD CABORN,
MP, MR CHARLES
BRIDGE AND
MR DARRYL
BROWN
40. My question really is how because if you,
for example, take the example of the banana issue, which I think
everyone is reasonably familiar with, and you look at the difference
between how the WTO assessed the cost of production of bananas
from Colombia as opposed to the Caribbean, within that whole assessment
that was made, there was no cost of the externalising of the environmental
costs, if you like, of not having production in the Caribbean,
so my question to you really is how do you start going about actually
building sustainability within those MEAs?
(Mr Caborn) That is not covered by an MEA, is it,
that particular one?
41. Well, it might not be covered by an MEA
as such, but the issue is about sustainability and how we actually
build sustainability into it. How do we actually go about making
those linkages?
(Mr Caborn) That is exactly the point we are making.
We believe there ought to be a building up. If you are going to
deal with the environment, the multilateral environmental agreement
is or is not the way forward. We are saying that it is the way
forward and then once we have got that clarified and to the best
of my knowledge, and I will be corrected, there has not been a
challenge by the WTO of any MEA that has got trade-related issues
in it, therefore, there is now an acceptance and what I believe
is necessary is to indicate that that is the way we are going
to deal with sustainability of the environment, that we have the
proper linkages between the WTO rules and the emerging MEAs if
that is how we are going to manage sustainability, if that is
the way forward, and that is debatable. That is the one we are
putting forward as the way of managing that. I think Mr Brown
might be able to give a little bit more technical detail to the
background to that.
(Mr Brown) As the Minister was saying, it is a matter
of protecting and strengthening the integrity of two systems.
You have got the system of MEAs and you have got the system of
WTO rules and both apply within their own domains, but there is
an interface between them when you come to the matter of trade
measures within MEAs, so how do you clarify that relationship?
Well, we have not reached a final decision on what mechanism is
the best to use.
Chairman
42. You have not reached a final decision because
the Royal Institute gave you three alternatives and you were saying
that you have not made up your minds which path to go down.
(Mr Brown) Well, there are a large number of possible
alternatives that you could adopt. The discussion is being taken
forward within the EU and within the UK and we are in the process
of narrowing down the options within those discussions. Now, the
point that we have reached is that the accommodation between the
two systems should be a legally binding accommodation, not just
a sort of voluntary agreement as that would be definitely very
much second best, so we favour a legally binding accommodation.
Mr Gerrard
43. Could I just pursue that particular point
about the relationship between the two systems, between an MEA
and the WTO rules. If you start to go down the road of amending,
say, GATT, Article XX, is there not a possibility that you will
end up then in a position where it is the WTO that is making the
decision whether an MEA should be exempted from the GATT rules?
Is that where we want to go when the WTO is making that judgment
about the environmental issues and should there not be somebody
else making that judgment?
(Mr Brown) That is definitely not the route we want
to go down and you have to avoid putting the WTO in that position
because, as the Minister has explained, that is not the WTO's
competence, so it is MEAs that put in place the rules about protection
of the global environment. What we want to do is to stop any damaging
challenge to those multilaterally agreed rules for environmental
protection within the WTO because you have got two equal systems
which need to be in harmony with one another and not at loggerheads,
so that is the danger that we are trying to prevent.
44. The issue is who makes that decision?
(Mr Caborn) Well, you can reverse it. The other one
that we are looking at, another option is to reverse the burden
of proof and this would offer great protection for the MEA trade
measures as they will presumably be compatible with the WTO rules,
and it is an assumption that we get that put into place, and then
the burden of proof would lie with the complainant to demonstrate
otherwise, so what we would have is an agreement that is effectively
putting the MEAs into the driving seat, for them then to become
compatible with WTO rules, and the burden of proof would then
have to be on the person who was making the complaint. That is
one of the options and I think the problem, the danger we are
always in in this is that we are actually starting the negotiations
before we have even got it on to the agenda of Seattle. The number
of groups I have met around who are saying, "Are you going
to do this? Are you going to do that?", and I say, "Hang
on! We have not even got this on to the agenda to discuss yet",
and there is always the danger of going down that course. What
we are saying, and I repeat, is that the basic principle is to
have a comprehensive agenda there. This is one of the areas that
we believe needs exploring. It will be part of the negotiations.
It is to get the sustainability of the environment, not just as
a bolt-on, but as part of the culture of that. We are looking
at ways that that can be achieved. We believe, and indeed the
EU agree with that, that the linkages between the MEAs and the
WTOs need to be refined and we need to get them properly dove-tailed
and linked into that, but then how do you actually operate the
systems well? That is all for the negotiations. We cannot pre-empt
that. We can only tell you what our negotiating position is as
of today.
Joan Walley
45. Can I just ask, therefore, on that particular
point, in respect of the work you are doing with the EU to steer
the EU's position on that, do you believe that there is a case
for a new wider co-ordination forum which might include the WTO,
which could include UN bodies and which possibly could include
the World Bank and the IMF as well?
(Mr Caborn) Well, our view is that we would not necessarily
rule that out. I think we have made our comment on this in our
submission. It is paragraph 25 of our submission where it is asking
whether there should be a world environmental organisation. Well,
we do not think that case has necessarily been put forward, but
as far as the UN Environment Programme is concerned, we believe
that that is as good a body at this point in time to take forward
the environmental agenda. We have subscribed to that very heavily
to the tune of—
(Mr Brown) £4.5 million per annum for at least
six years.
(Mr Caborn) So we have given a very heavy commitment
to that and I think it shows our commitment to the environment
as well, that being the lead body, as we see it, inside the global
economy, the body to take that forward, but again we do not think
these are mutually exclusive. We think there have to be divisions
of responsibility inside the various international organisations
and where they can have proper linkages and have divisions of
responsibility, we think the UN Environment Programme is the one
that should be taking it forward. If there is a case, a further
case to be argued that that needs to be strengthened, then fine,
one would have to look at that.
46. Could I ask whether or not the negotiations
on any new rounds might be tied into preparations for the Rio
+ 10 process in 2002 so that we are not always continuously behind
where the environmental agenda is?
(Mr Caborn) As has been indicated to me, there has
not been an indication yet that there will be the Rio + 10. I
asked the question yesterday actually when we were discussing
the procedure for this Committee and, as was indicated to me,
first of all, there is no set timetable for the Rio + 10—that
is the second Earth Summit—and there is no agenda or theme
to have yet been agreed, but the UK thinks it should not just
be a stock-taking exercise. I think what would have to happen
in 2002, we will be at a fairly crucial point, on the assumption
we get the comprehensive agenda at Seattle and agreement on the
three-year timetable, we will be at a fairly crucial point in
the negotiations of the comprehensive round and one could see
that the timing is one where you could actually have a cross-fertilisation
of both procedures and ideas, but I can say that it is in very
early stages, that. As I say, there is no date set and no agenda
set and we do not know quite whether the second Earth Summit will—
47. But you will be looking to influence the
agenda?
(Mr Caborn) Yes, we are influencing it. My colleague,
John Prescott, is today, I think, in Bonn discussing the Kyoto
agreement and we have been at the forefront of that. I think we
take a very responsible attitude in getting the developing countries
to sign up to that and then the linkage is in with developing
countries and we are very mindful of that. There is all that we
have done in terms of the relieving of debt which my colleagues,
Gordon Brown and Clare Short, have been doing and it is exactly
that. The reason we signed up to the EU trade agreement with South
Africa is for moving in that direction and bit by bit we are putting
into it, I think, a global order of managing a liberalisation
of trade in which we are effective. Quite honestly, if you read
the article I wrote for The Observer on Sunday about Willy
Brandt and 20 years ago when I used to sit next to Willy Brandt
in the European Parliament and discuss the whole question of the
north-south dialogue, it was just at a particular time in history
when certain things were happening and Willy Brandt was very disillusioned
in the early 1980s and we have returned to that again 20 years
on. He was calling for exactly what we are talking about and there
were people like Ted Heath who sat on that issue and it is well
worth revisiting, and indeed it reminds you of the 10,000 people
who actually demonstrated outside the House of Commons in support
of Brandt. If those organisations were as close on the WTO tail
with the same fervour as they were the Brandt report, we might
be able to get some progress. I would just like to put that on
the record!
48. Can I just bring us back to a bit more detail
and ask about this issue of production process measures, known
as PPMs in the jargon, I think. There is, I think, a debate going
on as to whether or not the WTO rules would allow product differentiation
not just in terms of the actual product itself, but the process
by which products are produced. Does the UK support this differentiation?
I think there was a big issue which involves developing countries.
(Mr Caborn) I think this is an area which is growing
and there is no doubt, and it is growing because of pressures.
We know, as politicians, the pressures that are on us in terms
of the environment, but also people wanting to know what are they
eating and wanting to make sure that labelling is part of that.
Now, I think we have got to try and bring a little order to it
because it can be used as a very negative tool and again I think
we have laid our position out in paragraph 14 of our memorandum,
process and production methods and eco-labelling, and that is
our position. However, I think what we have got to be mindful
of are the pressures on politicians and indeed by that on to the
producers and also to make sure that it is fair and this is not
being used as barriers to trade, which it could be quite easily,
and again I think this is an area that we will have to discuss
inside Seattle and I think something has got to be on the agenda.
I do not think we have a definitive position other than what we
have laid out in paragraph 14, which is our negotiating position
for Seattle.
49. Finally, can I just ask about core environmental
principles because I think that the UK has been arguing that the
precautionary principle is actually embodied in WTO disciplines
already and we were wondering what refinement is being sought
by the European Union. We are particularly interested to look
at the situation with regards to the voluntary agreement which
you mentioned earlier and we are very mindful that developing
countries might not have the resources or the capacity to be able
to come up with voluntary agreements and how they might be undermined
by any outcome of the Seattle round.
(Mr Caborn) Well, Mr Brown will give you the technical
side of it as well, but I think it goes back to this question
of capacity building. It is a very, very important issue and it
is not to be underestimated because the whole credibility of the
WTO and how it operates could be about the ability of people to
go in there, countries to go in and put their case, argue their
case technically in Geneva on the interpretation and also in the
negotiations as well, and that is why I stressed in my opening
remarks that we would take that very seriously and, as I say,
I think what we are doing in other parts of government policy
show that we mean it and we genuinely want to manage change and
bring developing countries into it and it is not in our interests
not to do that. In terms of the technical detail and where we
are exactly, I will ask Mr Brown.
(Mr Brown) The precautionary principle is integrated
into one very specific bit of the WTO system which is usually
called the SPS agreement, the sanitary-phytosanitary agreement,
which is to do with measures taken to protect very specifically
and tightly human, animal and plant health in terms of measures
to protect them against disease and pests, that sort of thing.
Now, that does not, therefore, cover more general precautionary
measures for the purposes of environmental protection in a larger
sense and that is what the EU and the UK have said that they want
to look at, as part of the negotiations, how you can incorporate
that, if you like, and extend it beyond the SPS into a more general
incorporation.
Mr Grieve
50. Can I just widen the discussion a bit in
terms of the whole issue of green protectionism for a moment.
It is often argued that a major barrier to the introduction of
environmental or other non-trade considerations in the WTO agreements
is the anxiety that third world countries have about green protectionism.
The NGO witnesses we have had who have come along to see us take
the view that the true anxiety of the third world countries is
not in fact green protectionism per se, but arises out
of a fear that unfair anti-dumping provisions will be introduced
by developed countries against them. Do you agree with that and,
if so, what can be done about it to build trust with third world
countries about our attitude to the problem?
(Mr Caborn) I do not accept their argument, but I
understand their fears. I think the best way forward with that
is to move, as I said before, in trying to make sure that the
WTO is clearly a rules-based organisation which is transparent
in its decision-making and its information, and which has a credible
disputes procedure. There are 134 countries in the WTO of which,
as I said, the majority are the developing countries and, therefore,
they have a right and a say and they will exert their influence.
I think in that area, in response to your question, the best way
forward is to put that type of organisation that I have just described
in place as quickly as possible because then it will be able to
deal with their genuine concerns. That happens not just on green
protectionism, but also in terms of labour and in other areas
as well, and, as I say, we can understand that. I think the other
area, which again I stress, is to make sure that they have got
the capacity to be able to put their case forcibly and technically
and competently inside that organisation. I think this is not
just a case for the WTO, but I think this is a case for other
international institutional organisations as well because they
have the same problems about capacity building, so I think bit
by bit, if we are going to manage the change that we want to see,
there are elements that we have got to pay attention to, like
capacity building, in those areas and make sure that we are opening
out the way that we do business and hopefully make sure that we
can arrive at the type of solution I have put, which is a rules-based,
transparent organisation with a good disputes procedure that is
universally accepted as being fair. That is the way forward.
51. As we are on the subject of fairness, can
I then turn to the political handling of the round. What degree
of openness is there going to be during the course of the round
in terms of documents, parallel discussions with civil society
and with parliaments? You may recollect that that was one of the
problems which beset an earlier round of talks.
(Mr Caborn) All I can say is that we will be pushing
for as much transparency as we possibly can do. We will hope to
use also the electronic networks that we have got to make sure
that access is there. We are doing rounds of consultation, as
far as NGOs and the civil society are concerned, and I have had
two meetings now, or one with the NGOs and a bilateral, and there
will be meetings at the European level. Our colleagues in the
European Union and the Commission have also met the NGOs at a
European level. I have made it open to them that if they want
to feed any information back into it, we will continue to consult
them right up to Seattle and beyond, and we will try to make it
as transparent as possible. It is a matter of, I suppose, time
on the one hand, but making sure we have got an open dialogue
on the other.
52. I think we have been promised a debate in
the House at some point. When will that be—before it all
starts, when it is all happening or after it has all finished?
(Mr Caborn) No, we are not as cynical as that. As
I said, we will report to the House our position as near to Seattle
as we can because, as I said, it is a fast-moving scene, and I
think we certainly showed that last week. We will give a report
to the House before we go to Seattle and we will report back after
Seattle, as I think was the case before. Indeed it is not in our
interests not to keep people informed and that is why your hearing
here today is very important. That is why I and a number of my
colleagues are doing a number of meetings around the country,
not just with NGOs, but with other organisations as well. We think
it is important that everybody is actually engaged in the debate
and obviously the House has the absolute right, but I do not determine
the business of the House, as you well know. That is the powers
that be and they will determine that. All I can say is that I
am standing available to come and report to the House as and when.
53. Do you think there is any point in having
a special committee to monitor the way in which the WTO develops?
We have similar committees in the House dealing with European
matters and the WTO is clearly of great importance.
(Mr Caborn) Well, that is a decision of the House,
not myself.
54. Do you think it would be a good idea?
(Mr Caborn) That is a decision of the House and you
will make that decision as backbenchers and people who have tremendous
influence in the House.
Chairman: Flattery will get you nowhere!
Joan Walley
55. Do you think there is any scope for institutional
organisations in the WTO with other similar multilateral organisations
to have some kind of parliamentary assembly or what do you think
should be the case for the WTO?
(Mr Caborn) I do not know. That is a good question.
I do not want to put in bureaucracy, but I want to make sure that
there is transparency. It is a question I would like to reflect
on and come back to you on. I genuinely hope, and I think there
is now a consensus emerging, that the WTO, if it is going to be
a credible organisation and stand the test of time, it has got
to look at itself this time round and say, "Are our rules
efficient? What are our responsibilities to much older international
organisations, like the ILO and others? What is our relationship
with them?", and I think that needs to be sorted out and
then I think if we can move to refining the rules and getting
the disputes procedures more effective and, as I said, capacity
building in the developing countries as well, we will have gone
a major step forward to giving it credibility and it being an
organisation that will stand the test of time. I hope it does.
That is my genuine answer to that. How we feed back into the civil
society and the democratic process is one that I have not given
any thought to, but one that you may well want to make a comment
on which we would then ourselves respond to, but it would be wrong
for me to respond now.
Chairman: Well, we shall certainly comment
on it and we will hope for a helpful response. Minister, thank
you very much and to your colleagues. That was a very useful session.
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