Previous SectionIndexHome Page

Mrs. Spelman: I am not here to repudiate and analyse history. The important thing is that we gave our support to the International Development Bill—now the International Development Act 2002—which untied aid. As part of that, we recognised the important focus of poverty reduction. I hope that, in everything I have said today, I have made it perfectly clear how committed the Conservative party is to reducing global poverty. I hope that the hon. Gentleman is left in no doubt about that.

Simon Hughes rose

Mr. Simon Thomas (Ceredigion) rose

Mrs. Spelman: I will give way to the hon. Member for Southwark, North and Bermondsey (Simon Hughes), if his contribution is on a wider point. I know that this is a short debate, Mr. Speaker.

Simon Hughes: On the wider issue of trade barriers, will the hon. Lady first tell us for the record whether the Conservative party is in favour of majority voting in the WTO? Secondly, is it in favour of majority voting in the European Union? One of the reasons that subsidy and trade barriers in agriculture have continued is that the veto in the European Union has kept them in place.

Mrs. Spelman: The hon. Gentleman may know that I spent a great deal of time working with different member states of the European Union on agricultural policy. I discovered that it is very difficult to make headway in

19 Jun 2002 : Column 287

negotiations when member states lack the good will to work together for the best result internationally, for Europe as a trading bloc, and, as I hope that I have made clear today, for poorer nations. All too easily, national interest can be over-used. I have seen it used and abused. There are times, however, when the national interest is an issue and when Governments would be expected to argue for the national interest of their country. In the past, the trouble has been that it has been used injudiciously, not by our country specifically, but by a number of other countries that have strong vested agricultural interests. That has led to the use of the national interest to defend a country's position being brought into disrepute. I am therefore wary of making a sweeping generalisation about whether it should or should not be used.

I want to move on to reform of the subsidies, which is a very important area. It is another matter that the Prime Minister should discuss in Seville later this week. Some of the worst distortions of trade are caused by the subsidy systems used by countries to bolster their domestic production. When it comes to subsidy, there is no way in which poor countries are able to compete with the power of wealthier nations.

In dollar terms, agricultural subsidies in countries in the Organisation for Economic Co-operation and Development are more than two thirds of Africa's total GDP. They account for more than a quarter of farm output in the United States, rising to 40 per cent. in the European Union and to more than 60 per cent. in Japan.

The Trade Justice Movement has provided us today with the example of rice growers in Haiti, who produce rice for local markets. However, as rich countries, notably the US, have subsidised their rice exports, Haiti has been flooded with cheap rice imports so that Haitian farmers are unable to find a market for their crops.

I have worked in agriculture for most of my working life, and I deeply sympathise with the problems that our farmers—particularly dairy farmers—face. The irony is that the common agricultural policy is meant to provide a reasonable standard of living for farmers in the EU, but it does not even provide a living wage for our dairy farmers and directly affects the viability of farmers in the developing world.

Recently, I went to India with Oxfam and Members may not be aware that India is the world's largest producer of milk. However, it cannot compete with subsidised milk surpluses from the EU that are exported to the growth market of the middle east. That is despite the fact that India is the second lowest cost producer in the world after New Zealand.

At the last ministerial meeting of the WTO in Doha, countries agreed to launch a new trade round, including the liberalisation of agricultural subsidies. That was certainly progress, and I hope that it comes to fruition. Nevertheless, the decision came after much foot dragging by the EU, and the scepticism of poor countries results from rich countries' reluctance to keep their side of the bargain in the past.

I am sure that the whole House abhors the decision by the US Congress to vote through an additional $100 million worth of subsidies for American farmers. Total US agricultural subsidies will then amount to $388 dollars per head, which represents a staggering 67 per cent. increase in farm subsidies. However, we should not kid ourselves that those sums get through to poor farmers.

19 Jun 2002 : Column 288

Americans may be our staunchest allies in time of war but, on trade, that increase is a retrograde step for the principles of liberty that their nation espouses. The move will cause incalculable damage to the lives of farmers in the developing world as well as to the livelihoods of farmers in this country. I clearly recall the outrage that resulted from the US decision to impose tariffs on its steel imports, but have the Government expressed similar condemnation of the US Farm Bill? When the Prime Minister goes to Canada for the G8 summit, I hope that he will use his good relations with the US President to make plain the damage that the Bill will do.

The US is not the only culprit. EU agricultural subsidies amount to $276 a head—to use the same currency—compared with $338 in the US. The last thing that we want is the equivalent of an arms race in farm subsidies. To prevent that, the CAP must be reformed. Some 1.6 million Africans live on less than $2 a day but every cow in the EU is subsidised to the tune of $2 a day.

Roger Casale: Will the hon. Lady give way?

Mrs. Spelman: I have already given way to the hon. Gentleman.

The Government White Paper on globalisation pledged to push for significant reform of the CAP, but that has not happened. The CAP must be reformed in a way that will ensure a reasonable living for British farmers and reasonable opportunities for their counterparts in poorer nations. Farmers in Britain face huge problems and they are not well served by the CAP. Conservative Members would like the Government to make a far greater effort to reform the CAP. In their White Paper, they said that they would use every opportunity to work for change to the CAP. When the Prime Minister attends the EU summit later this week, will he try to persuade other EU leaders to agree to a timetable for CAP reform?

There also needs to be reform of double standards. Rules that appear to benefit only the rich at the expense of the poor should not be tolerated. Those groups that accuse the developed world of double standards are right. I recognise that people may think that trade liberalisation is a one-way street for richer countries to get richer, but it does not have to be. I see it far more as a two-way street, with trade going both ways. The Government should tackle trade injustice with more vigour. We are calling on them to show leadership. If any poor nation behaved in the way that America recently did in passing its Farm Bill, it would have faced the wrath of the World Bank and the International Monetary Fund. It is one rule for some and another rule for others.

Later this month, the G8 will meet in Alberta, Canada. There has been much rhetoric about it being a development summit. The New Partnership for Africa's Development is high on its agenda. NEPAD is a partnership, and on our side that should mean free and fair market access. Partnership is a two-way process, however. In return for opening our markets, we can press for economic, political and social reform in those countries that want to trade with us. There is no doubt that corruption is one of the greatest impediments to development in such countries. One of the most important things that could be achieved in the summit would be a commitment from the G8 to address the imbalances in the trade system.

19 Jun 2002 : Column 289

Some 10,000 people have come to lobby Parliament today on the issue of trade. There can be no doubt that increasing levels of global trade offer hope to millions of people living in poverty. The Secretary of State has strongly defended globalisation in the face of its critics, some of whom are on Labour's Back Benches. The Government's White Paper on globalisation is called "Eliminating World Poverty: Making Globalisation Work for the Poor", but billions of people are still marginalised by the process. The challenge now is to make globalisation work on a global scale.

Mr. Speaker: Before I call the Secretary of State to speak, I must tell hon. Members that there is a 10-minute limit on Back-Bench speeches.

4.7 pm

The Secretary of State for International Development (Clare Short): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

This is a happy day for me. It marks a real shift in the development movement in the United Kingdom and, indeed, in the position of Her Majesty's official Opposition. Different groups have come to understand that more equitable trade rules are essential to create the opportunity for the poorest countries to grow their economies and for the poor of the world to work their way out of poverty. It is important to have such a strong new consensus across the development movement in the UK and across the Floor of the House. That is a significant change and it enables us to try to use our influence on the world stage to bring about the policy for which we all jointly argue.

My Department and I have been working to get the development lobby to take on the case for more equitable trade rules since the Department was established in 1997. Importantly, its powers were enlarged beyond being an organiser of the UK aid budget to include an analytical role

19 Jun 2002 : Column 290

in trade, agricultural reform, fisheries, environmental agreements, debt, conflict, humanitarianism and so on. The objective was not just to run a good UK aid budget that was as large as possible, but to get the rules of the international system more equitable so that the planet could be run in a more equitable and sustainable way for all.

I should like to pay tribute to the quality of officials in the Department. It is respected as one of the most high-quality development organisations in the world in both its delivery and its analytical capacity. It is staffed by highly motivated high-quality officials. My first permanent secretary, Sir John Vereker, is no longer with us, but he made an enormous contribution to establishing the new strengthened Department. The UK should be proud of the quality of the people who lead development work for us across the world.

The new Department was established in 1997 with the remit to consider trade and development. Our first hurdle was posed by the Department of Trade and Industry. The official, now retired, who led on trade in that large Department was struck with apoplexy at the thought that the Department with responsibility for development dared to have views about trade. There was an enormous battle between the trade part of the DTI and my Department. Up to then, the DTI had been asked to promote only UK trade interests, and suddenly we were changing the grounds for discussion by saying that it was in the UK's interest to have an equitable set of international trade rules that allow the poorest countries to grow their economies.

That change has taken place. There was a lot of joint work and a lot of research, and by the time we got to Doha, DTI representatives—Ministers and officials—were more progressive than trade representatives from most other OECD countries because they saw more equitable global rules as being in everybody's interests. Today we are celebrating a long journey, and the first part of it involved legitimising the DTI's concern with the global management of trade rather than the simple duty to promote UK trade interests, regardless of the interests of others.

From there we moved forward to Seattle. Everyone will remember that almost every lobby and force, including the whole British NGO development movement, was opposed to a new trade round at Seattle. Many voices called for the WTO to be closed down. We had a debate in the House of Commons—I see the right hon. Member for Skipton and Ripon (Mr. Curry) nodding—in which a few of us argued that the WTO is a useful organisation that gives us a chance to strengthen global trade rules and make them more equitable.

The Clinton Administration, particularly President Clinton himself, the entire international trade union movement, led most strongly by the US but including Britain, the whole British development lobby and all the British environment NGOs were completely opposed to a new trade round. They believed that the WTO was a reactionary organisation that wanted to add to trade rules and conditions on labour and environmental standards, making it impossible for developing countries, which of course want to raise those standards, to meet the rules and have access to global markets. At that time, the trade spokesman for Her Majesty's Opposition did not mention, in explaining the party's position, the interests of developing countries.

19 Jun 2002 : Column 291

Let us remember where we have got to. Today, with the movement of Churches and development NGOs, there has been an important shift forward. The last time there was trade competition in the world and countries were erecting barriers against each other, as we see with steel and with the US Farm Bill, was in the 1930s, when there was depression in some parts of the world. Country after country imposed tariffs, which threw the entire world economy into the most terrible depression. That led to the second world war and to fascism and all that flowed from that.

Following the second world war, we started off with the general agreement on tariffs and trade. I believe that the first trade round after the war was called the Torquay round, which is rather sweet. Not as many countries were members of GATT, and the negotiators were blocs of rich countries. There were rounds of trade talks to try to reduce the tariffs that remained from the 1930s. That was a worthy process, and it was better than what it took over from, but following the Uruguay round, the WTO was born. It is only five or six years old, and it really was an advance.

The WTO is an organisation which countries join by choice, and which is based on rules that apply equally to all. It negotiates by consensus. I do not think that any hon. Member will agree with the proposal made by the hon. Member for Southwark, North and Bermondsey (Simon Hughes) that the WTO should make decisions by majority. These matters so deeply affect the interests of individual countries that we have to move forward by consensus. It is remarkable that, in negotiating multilateral agreements on the environment and trade at Doha and elsewhere, we manage to reach global consensus.

In my view, and I think that this position is now more widely recognised, the shift to the WTO gave us a chance to get more equitable trade rules. Now, the majority of WTO members are developing countries, and if they come together in a trade round and work together, they will make gains. It is possible now to have a set of global rules that are fair and that give developing countries the chance to grow their economies.

Next Section

IndexHome Page