Examination of Witness (Questions 80-98)|
WEDNESDAY 31 OCTOBER 2001
80. There is going to be an awful lot of work
to achieve that in the time available?
(Ms Hewitt) Yes.
81. What do you see, and obviously we hope this
will not happen, but if you fail to get agreement again at Doha,
if the talks break up, what do you see as a consequence of that?
(Ms Hewitt) It would be a very real setback for the
World Trade Organisation and for the world economy; but we are
not planning for failure, we are working incredibly hard to make
this a success.
82. On environmental matters, with Europe and
the developing countries, there are some differences of view,
and obviously these have a bearing, and have had a bearing, on
how the developing countries see the whole agenda, about their
take-up, about their opportunities to evaluate what is on the
table, and the resources they can actually put in to considering
these options, which for very small countries are quite different.
How can you manage to allay the concerns of these countries about
environmental protectionism and the whole raft of things that
they want to really turn over and investigate in that limited
(Ms Hewitt) It is a very big challenge, and there
is no doubt at all, for many of the developing countries, they
see the European Union putting this very big emphasis on the environment
and they see it as protectionism. And part of what we have been
seeking to do is really to reassure people that the environmental
concerns that our public have and that we share as a Government
are not a disguised form of protectionism, they are about ensuring
sustainable development, right across the world, in everybody's
interests. And what we are seeking to do is to clarify the relationship
between the WTO rules and the multilateral environmental agreements,
we are trying to clarify the status of labelling initiatives,
under the WTO rules, so that voluntary labelling schemes do not
risk falling foul of the WTO rules, and we want to look at the
role of the precautionary principle within the multilateral trading
system. Those are big and difficult goals, and we will just go
on, both individually and through the European Union, seeking
to win an understanding of our goals there as well as support
83. And how do you see the role of the European
Union co-ordinator in all of this?
(Ms Hewitt) I think Commissioner Lamy has played an
outstanding role in advancing the negotiating position, advancing
the goals of the European Union as a whole, and he has developed
a very effective working relationship with Robert Zoellick, the
American trade negotiator, and that has been very helpful in getting
the preparations to the point at which they now are.
84. Do you think that is going now as you would
want to see it and you are reasonably comfortable now about that?
(Ms Hewitt) We are making good progress. The issue
of implementation, for instance, which I referred to earlier,
was a huge barrier two months ago; we have made very real progress
on that. We still need to make more progress on the environmental
85. You said that you saw a new trade round
as absolutely critical for developing nations. I think, when the
Committee looked at this issue before Seattle exactly the same
thing was being said to us then, a new trade round is critical
for developing nations. But the view that was coming, I think,
from developing nations was, `Well, before we go into a new trade
round we want to really see what has happened, we want a proper
evaluation of the outcome of the last round;' how confident are
you that that sort of view will not still be there?
(Ms Hewitt) Some countries, particularly India, are
still taking that position; it is one reason why the implementation
issues were so important. On evaluation, there is some work already
being done on evaluation, there are, of course, issues, like the
multifibre agreement, where the phase-out will not be completed
until 2005, so it is actually too early to evaluate. What I hope
we can persuade other developing countries, or those who are still
concerned about it, is that it is worth moving forward, not just
in implementing the Uruguay Round agreements but actually starting
to negotiate new agreements and giving that fresh impetus and
confidence really to the world economy, and also strengthening
the rules-based framework for world trade, which is absolutely
crucial to protect the interests of developing countries and to
prevent protectionism in the developed countries, which is a very
real barrier to developing countries' development. We are, as
all of you will know, probably the main proponents of reform of
the Common Agricultural Policy within the European Union, we have
to reform the CAP in the interests of the new entrants to the
European Union as well as developing countries, and, frankly,
if we can get agreement at Doha that will strengthen our hand
in achieving that goal as well; but, of course, there are different
views on that within the European Union, we have to manage that.
86. I understand the point about the need for
a rules-based system, because people from developing countries
will say to you, "We don't want a system which has no rules,
it's a question of what the rules are." There was a slightly
different issue last time as well, which was not just that there
would be a comprehensive new round but what came out of it, and
fears that what was going to be the outcome would be a single
package which it would be demanded that a country would sign up
to, just a single undertaking that everybody would be expected
to abide by, and that was another source of worry for some developing
countries. How would you like to see this new round develop, if
it does get off the ground, because Doha is going to be more about
whether a new round happens than what the new round actually consists
(Ms Hewitt) Yes; clearly, we are not going to start
the substantive negotiations at Doha. There is considerable merit
in the principle of nothing is agreed until everything is agreed,
because it then enables you to do deals across this very complex
organisation that moves the whole thing forward rather than allowing
countries to take the pieces they particularly want and not contribute
to the rest of it. But I think within that overall strategy it
is possible to have some flexibility; and, for instance, on the
issue of trade in services, which is part of the permanent negotiating
remit of the WTO, and therefore, in a sense, not an issue for
Doha, there is already a very clear principle within the agreement
that each country decides for itself which services to liberalise.
Now, in the context of Doha, part of our objective is to get the
so-called new issues, competition and investment, onto the agenda,
because we think part of bringing developing countries into a
good framework for world trade is to ensure that they have some
sound rules on investment and competition, and certainly, particularly
on the competition side, that will help on foreign direct investment.
But it is an issue of concern to developing countries, partly
because they fear they do not have the capacity to deal with that,
the issue I referred to earlier, so there are suggestions there
not only that we have a couple of years of preparatory work before
we negotiate but also that we might have a similar opt in, opt
out procedure, once we get into those substantive negotiations.
So I think there is room for flexibility on matters like that.
87. Just to touch briefly on climate change,
and you referred, and I think the whole Committee agrees with
you, to the Herculean effort that our Deputy Prime Minister made
in respect of Kyoto. Can I just ask you two questions on that:
(a) will you be out at Marrakesh at the next summit, and can I
also ask you how the DTI is preparing work for that, and how you
are working jointly with the position that our Deputy Prime Minister
has, in respect of taking further forward the climate change talks
(Ms Hewitt) We very much support that; obviously,
we are not the lead Department in those negotiations but we strongly
support the Deputy Prime Minister and other colleagues in seeking
to move beyond Kyoto, and in particular to persuade our American
colleagues to sign up to multilateral agreements on that. We have,
in particular, a joint team with DEFRA on climate change, and
that is working on the preparations for Marrakesh.
88. And will you be going to Marrakesh yourself?
(Ms Hewitt) I do not think so, but I have not specifically
looked at that yet.
89. I think we would be interested to know if
you were going?
(Ms Hewitt) I will certainly tell you.
90. Good. And really one last thing: export
credit guarantees. Could you just tell me, first of all, in a
wider perspective, how you track the environmental sustainability
in respect of decisions which DTI makes in respect of export credit
controls and guarantees?
(Ms Hewitt) The Export Credit Guarantee Department
has been looking at basically how it greens its own operations.
In December last year, they published a statement of business
principles, and if you have not seen them I would be very happy
to send them, I will send them to the Committee; but they included
a commitment to look at the environmental impacts of the projects
they were being asked to support, as well as the social, human
rights and health and safety impacts. Obviously, it depends on
the particular project, but need I mention the enormous amount
of environmental assessment work that is going on in relation
to the Ilisu Dam project, which is, of course, still outstanding.
Now in January of this year the ECGD introduced an enhanced environmental
assessment system, and the aim of that is to ensure that all the
projects they support comply with internationally accepted environmental
standards, including, for instance, those used by the World Bank.
They have got a dedicated unit that deals with their business
principles, and that includes qualified engineering and environmental
experts. So there is a lot going on there to make sure that we
do not fall into the trap of giving export credit cover to projects
that actually are environmentally damaging, which is something
that, of course, has happened in the past.
91. Given, as you quite rightly say, the enormous
controversy that there is about the Ilisu Dam, and the way in
which there have been assessments done by other Departments, including
the Foreign and Commonwealth Office, and so on, and given what
you said earlier on about the events of September 11 and how the
coalition needs to be underpinned by an economic relationship,
how do you square that with the environmental assessment in respect
of the Ilisu Dam from within the DTI? What conditions would you
feel would have to be absolutely minimum in respect of environmental
sustainability, what mechanism have you got for making sure that
you are not going to be bull-dozed into a decision to support
it at any cost?
(Ms Hewitt) The criteria for that decision were spelled
out by Stephen Byers last year, and they include the environmental
assessment and the human rights impact. Now I am sure you will
have seen the very substantial pieces of work that have already
been produced on the human rights and on the environmental impacts
of that particular project. We have commissioned from independent
consultants an evaluation really of those assessments; no decision
has yet been made.
92. Could I ask who the independent consultants
(Ms Hewitt) I am afraid I do not actually have that
information with me. I am sure it is not secret.
93. It would be helpful to have details of who
the consultants are, and to have details as well of the remit
and the specification that was given to the independent consultants
when they were asked to undertake this environmental assessment,
because, presumably, events have changed since 11 September and
I think we need to see that within the wider context. It would
be helpful to have those pieces of information?
(Ms Hewitt) Let me see what further
information I can let you have on that. As I say, the criteria
were very clearly spelled out, and those have not changed.
94. In one of your replies, Minister, you did
say there had been an environmental impact assessment of the decision
by your Department on the MOx issue; is that right?
(Ms Hewitt) No. Sorry, what I said was that our own
view of that project had been based both on environmental assessments
and economic assessments; the decision, of course, was one for
the Secretary of State for Environment.
95. And she, Mrs Beckett, would have done an
environmental assessment of that?
(Ms Hewitt) Certainly, environmental assessments were
done, and they were taken fully into account in making that decision.
96. What would be useful is if we could have
sight of those?
(Ms Hewitt) Yes; let me see what further I can send
you on that.
Chairman: Thank you.
97. If I can return to the Ilisu Dam, I got
the clear impression from your predecessor that he felt that the
conditions that had been set were most unlikely to be met. You
do not feel in a position to indicate to us what your present
(Ms Hewitt) The criteria were very clearly spelled
out by Stephen Byers; they have not changed. But we have not made
98. He certainly indicated to me that he felt
that it was most unlikely the criteria would be met. I wondered
if, given the sort of canards one gets in the press, you could
at least dismiss the story, that I think was in the Sunday Times
on Sunday, that there might be some rather unpleasant deal done
in order to please the Turkish Government and keep it in the coalition,
despite the fact that, all the evidence, of course, was to the
contrary? I wondered if I could give you the opportunity to lay
that fear to rest?
(Ms Hewitt) I did not see that piece, but I am sure
you know a great deal better, as do I, than to believe everything
we read in the Sunday Times, particularly that kind of story,
from the sound of it.
Mr Savidge: That is why I was giving you the
opportunity to respond to it.
Chairman: Secretary of State, thank you very
much indeed for your attendance today. We are most grateful for
your evidence. Thank you.