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7.15 pm

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Denis MacShane): I congratulate my hon. Friend the Member for Glasgow, Maryhill (Ann McKechin) on initiating the debate and on making a speech of passion and care about such an important issue. Fair trade is an idea whose time has come and it is an area where the individual can make an important difference. My hon. Friend helped to launch the Fairtrade fortnight in the House and she is passionately committed to fair trade products back home in Glasgow.

It is good that the House takes the issue seriously. The Under-Secretary of State for International Development gave an eloquent reply in a similar Adjournment debate initiated by my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy).

My right hon. Friend the Secretary of State for International Development visited my constituency at Christmas three or four years ago. Clare and I—that is the only time that I shall refer to her by name, as I know she should be given her ministerial title—donned Santa Claus hats and filled a handsome shopping basket with fair trade goods at Tesco. That brought us local publicity and encouraged south Yorkshire shoppers to follow my right hon. Friend's example.

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My private office at the Foreign Office and the cafeterias and stores of the Foreign Office, the House and other public bodies try to buy fair trade products—as many of us do personally. Consumers can make a huge impact.

As my ministerial responsibilities include many poor parts of the world, however, it is right for me to offer one or two cautionary words. My friends in the United States steel industry—members of the United Steel Workers of America—insist that all they are fighting for at present is fair trade. That means that exports from steel plants in my constituency could drop by as much as half, if the full tariffs are applied. Fair trade for one person may mean the loss of a job for another.

Supporters of the common agricultural policy in France, associated with the ATTAC organisation, say loudly that they support fair trade. However, the subsidies given to farmers in the north—both in Europe and the United States—amount to more than the total combined gross domestic product of sub-Saharan Africa. Their idea of fair trade would not be that of the African or Latin American peasant, producer or small farmer who wants access to our food markets in Europe or the United States.

My hon. Friend referred to the problem of coffee, but before I deal with that we need to consider some definitions. People talk about fair trade; they refer to ethical trade, or what Anita Roddick calls "community trade". The Body Shop has perhaps done more than any other franchised chain in the world to put fair trade into practice, with a continuing relationship with producers. The phrase "community trade" comes from Miss Roddick's introduction to a little book called "The No-Nonsense Guide to Fair Trade", published by Verso, which I commend to the House even if I do not agree with all its analysis. It is a further example of how the movement is growing, and we should give as much support and energy to fair trade as we can.

My hon. Friend spoke about coffee. I have visited Chiapas in Mexico, a traditional coffee-growing area, and spoken to the people who have suffered from the collapse in coffee prices, which has been one of the contributory factors to the Zapatista movement. Again, in Colombia, the absence of good coffee-production mechanisms, defined through good prices, has encouraged peasants to produce other, far more noxious, substances. In Brazil, President Cardoso is concerned about United States protectionism preventing Brazilian agricultural produce from reaching the US market.

It is not just wicked multinationals or a rigged market that have caused the collapse in coffee prices that is at the real root of the problem. As my hon. Friend said, Vietnam has massively entered the world coffee market in the past decade by growing coffee for export. Vietnam is a very poor country, and it is not for me to say that its peasants do not have the right to enter the world market for coffee, even if that drives down prices for producers in Latin America.

I am not sure that it can be right for white politicians in the north to tell one group of workers or peasants anywhere in the south—Latin America, Africa or Asia—that they do not have the right to produce for sale, including export, what they feel best able to produce. I would not be happy, and I do not think that my hon. Friend would, if some external body said that international investment could not come to our constituencies, on the

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grounds that the products or services proposed to be made or offered for sale were already being made or exported from somewhere else. As a constituency Member, representing, like my hon. Friend, a poor part of our nation, I want my constituents to have the jingle of as much money as possible in their pockets, and that means, for them, the lowest possible prices.

Of course we accept that trade can have cruel side-effects, but the past quarter century of increasingly open trade has produced remarkable results. In 1970, 35 per cent. of all the people in developing countries were considered to be starving. In 1996, the figure had fallen to 18 per cent., and the United Nations expects it to have fallen to 12 per cent. by 2010. That is not far enough or fast enough, and the millennium development goal of halving world poverty by 2015 is an important one, but if we compare where we were 30 years ago with where we are now, we can see that trade has helped to make the world richer.

Between 1990 and 1999, adult illiteracy rates in low-income countries, for males aged 15 and above, decreased from 35 to 29 per cent., and the percentage for females aged 15 and above decreased from 56 to 48. Again, that is not far enough or fast enough, but without the material benefits that come with open trade, not even those reductions would have been possible.

In 1970, only 30 per cent. of people in the developing world had access to clean drinking water. Today, about 80 per cent. do. That is why we need to make the case for open trade. Yes, we need fairer trade, but we must not give the final say to the protectionists, the anti-globalisers and those who would restrict trade to the profit of existing groups only. That would only make our world poorer. It is also why the world trade agreement at Doha was important. The new three-year trade round launched at Doha now has a development agenda at its core. If we can succeed, as Doha suggested, in opening up trade in agricultural products and removing subsidies, defeating protectionism, developing countries stand to gain substantial commercial benefits under the negotiating mandate.

Today, rich countries pay out $1 billion a day to their farmers in agricultural subsidies. Annually, the figure is more than four times all the development assistance that goes to poor nations. Our Government are at the forefront of advocating the need for change; the Prime Minister has spoken eloquently in Latin America and at the Dispatch Box about the need to defeat protectionism and open up trade in different countries. Markets will be opened up, as was said at Doha,

and trade-distorting domestic farm support.

My hon. Friend the Member for Glasgow, Maryhill spoke about the increasing trade in processed foods; it is not raw materials which arrive here, but processed foods, which have been value-added in developing countries. She is right, which is why the Government are taking the lead in every international forum in seeking to remove those tariffs. I invite her to persuade the anti-globalisation campaigners that open trade—the lifting of tariff barriers—is the right way forward.

We have been at the forefront of pushing the European Union to to agree the "everything but arms" initiative for duty-free and quota-free market access for the least developed countries; there are now phase-in periods for

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rice, sugar and bananas. I would like those phase-in periods to be shorter, but I must take on, intellectually and politically, colleagues on the left in France and Germany, and many people in this country, who oppose the removal of protectionist tariffs and the fight for free and open trade. Government support for fair trade therefore has to be seen in the context of their wider commitment to reforming national and international trade to benefit the poor. Examples of that commitment include Traidcraft Exchange; the Government support business agencies and individual enterprises in developing countries with exporting, wholesaling and importing facilities, linking them to commercial buyers in Europe. Countries that the Government are helping through that initiative include Malawi, Zambia, Tanzania, India, and the Philippines.

We are supporting the start-up costs of the Day Chocolate Company in Ghana; manufacturers and markets which trade fairly get access to markets in the United Kingdom. We are seeking to help southern producer groups to meet changing market demand and assist with sustainable improvements to their livelihoods. We want capacity-building programmes for business service providers in developing countries which link producer groups with domestic and international markets. We want to support marketing campaigns to promote the principles

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of fair trade, and we want to support further the fair trade labelling system. Labelling a product, whether a T-shirt or a packet of coffee, to show that it was produced in accordance with the values of fair or ethical trade is one of the best ways of making progress. We want independent auditing of the fair trade label to ensure the validity of its guarantee to consumers and to prevent it from being suborned by some of the companies to which my hon. Friend referred. Shoppers in Britain should be sure that when they pay a little extra, it will get to the producers.

I am therefore particularly proud that, in the past five years, the UK, alone of the G8 or the major EU countries, has increased its share of gross domestic product devoted to aid; it has increased by 45 per cent. That, if nothing else, is an achievement of which every Labour MP and the Labour Government can be truly proud.

The fair trade debate will continue. The House has my pledge and, I am sure, the pledge of all Ministers, that the Foreign and Commonwealth Office and the Department for International Development will co-operate closely and continue to promote fair trade in the context of open trade, so that all the world can grow and we can finally defeat the scourge of poverty which, as the Prime Minister said of Africa, is a scar on the conscience on the world.

Question put and agreed to.

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