Commission Communication on fair trade.
||Trade and Industry|
|Basis of consideration:
||Opinion of the Trade and Industry Committee of 13 December 2000
|Previous Committee Report:
||HC 23-ix (1999-2000), paragraph 4 (16 February 2000)
|To be discussed in Council:
||No date set|
||Cleared, but relevant to the debate recommended in European Standing Committee C on duty-free access for products originating in the least-developed countries
16.1 On 16 February 2000 we reported on
the Communication on fair trade, which the Commission had produced
following an undertaking it had given at the June 1998 European
Council and the increasing political interest being shown in the
issue within the Community.
16.2 We concluded that the Communication
was a useful piece of research but that it made only a few tentative
proposals for what action, if any, should be taken by the Community.
We commented that this modest document was not produced until
29 November 1999, on the eve of the WTO meeting in Seattle and
nearly 18 months after the Commission's earlier undertaking.
16.3 We decided not to clear the document,
pending receipt of the views of the Trade and Industry Committee,
which had published on 9 March 1999 a report on Ethical Trading
in which it welcomed the UK Ethical Trading Initiative and discussed
a number of issues relevant to this report on fair trade, such
as monitoring and verification to inform consumer choice, labelling,
trade union and labour rights, and preferential tariffs.
Opinion of the Trade and Industry Committee
16.4 Following our reference to the Trade
and Industry Committee, we received on 13 December 2000 from its
Chairman (Mr Martin O'Neill) a letter setting out the Committee's
views. The Committee noted that the scale of Community interest
or active involvement in fair trade was "lamentably slight",
and that the Commission Communication was mainly devoted to a
brief account of the present situation. The Committee did, however,
refer to one concrete step taken within the Community's trade
system which deserved a separate mention. This was the "special
incentive scheme" within the Generalised System of Preferences
(GSP), which offers small percentage reductions in prevailing
rates of duty for countries which are able to demonstrate full
compliance with ILO Conventions on freedom of association, collective
bargaining and child labour. The Committee said that, when it
reported on ethical trading in March 1999, it observed that only
Moldova had applied, and that the Department of Trade and Industry
had noted in its reply that there would be an annual report on
the scheme, and that the UK would press the case for a more generous
scheme, not least when it came up for review in 2001.
16.5 The Committee's letter also referred
to the proposal
which the Commission had recently put forward for duty and quota
free access to the Community for all exports (except arms) from
the world's least-developed countries (LLDCs). It suggested that,
although the Communication on fair trade on its own was not of
sufficient importance to require debate, it might be relevant
if we were to recommend a debate on the "everything but arms"
proposal, so as to bring in the fair trade or ethical dimension
of free trade agreements. In particular, it said that some LLDCs
would presumably be more likely than others to qualify for preferential
treatment on grounds of observance of international labour conventions,
whereas some ACP countries
now given preferential access might have difficulty in meeting
the criteria. In the Trade and Industry Committee's view, this
was a matter which might benefit from a fuller airing.
16.6 We have noted with interest the
views of the Trade and Industry Committee on this subject. Having
recommended last week that the "everything but arms"
proposal should be debated in European Standing Committee C, we
are, in the light of the Trade and Industry Committee's comments,
tagging this document to that debate.
35 Ethical Trading: Sixth Report from the Trade
and Industry Committee, HC 235 (1998-99). Back
(21715) 12335/00; see HC 23-xxxi (1999-2000), paragraph 9 (29
November 2000), HC 28-ii (2000-01), paragraph 3 (10 January 2001)
and HC 28-vii (2000-01), paragraph 2 (28 February 2001). Back
Caribbean and Pacific. Back