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6.4 pm
Mr. Andrew Rosindell (Romford): The issue of trade justice is of immense interest to the constituents of all Members, and this weekend I will participate in local events in my constituency of Romford. That is demonstrated by the fact that our mailbags have been full of letters and post cards in the last few weeks highlighting the issue. I congratulate my hon. Friend the Member for Meriden (Mrs. Spelman) on ensuring that this important topic is debated on the Floor of the House today.
The aims of the Trade Justice Movement of eradicating world poverty, protecting the environment and assisting developing economies in their development are noble ones, which have the support of most if not all Members of the House. It is how that can be achieved, however, which is most important, and that is something that the trade justice campaign must review. The path from third world economy to first world economy must not involve endless intervention, regulation and international rulings. Those may provide short-term fixes but could also lead to dependency and the creation of false, unsustainable markets in the long term.
The first of the main demands by the Trade Justice Movement, as found in its literature, reads:
- "stop forcing poor countries to open their markets".
Mr. Simon Thomas: Will the hon. Gentleman give way?
Surely the best way forward would be to implement strategies that leave poorer economies free to develop in the most appropriate manner, given their individual nature, resources and circumstances. Countries must be left free of interference and free from those who would rather spoon-feed developing economies than prepare them for true international competition.
The next trade justice aim is to "regulate big business", which is the kind of typically socialistic reaction that presumes that politicians and officials know best. Even this Government have ditched that outdated view. If we regulate, we stifle and, in turn, will stunt growth. That is simple economics. Big business will not respond to new regulation in the manner anticipated by the anti-globalisation movement.
Mr. Simon Thomas: Will the hon. Gentleman give way?
Mr. Gummer: Will my hon. Friend give way?
It will not suddenly be a case of multinationals giving the third world a big hug and paying double for the produce. Regulations and barriers in the market drag everyone down. In the long term, that will include third world producers.
Mr. Simon Thomas: The hon. Gentleman is in danger of doing a gross injustice to the Trade Justice Movement in confusing it with the anti-globalisation campaigners. One of the things that he must recognise is that the Trade Justice Movement has accepted, and welcomes the fact, that there should be international laws and regulations on trade, and wants to work within the
WTO, but requests simply that individual countries, as he has said, should be free of interference and should be able to join in world trade as they think is best for their economies. Surely, if we are to look after the poorest people in the world, that is only right and proper.
Mr. Rosindell: I accept what the hon. Gentleman says, which is why I have not said that I oppose what the Trade Justice Movement is trying to do. I simply said that it should review some of the statements it has issued, which give out the wrong signals.
Mr. Gummer: When my hon. Friend comes to talk about multinational companies, however, is it not reasonable to insist that international organisations have the same attitude, for example, to health and safety in Ghana as they do in the United States? Is it not reasonable to insist that such companies should do that?
Mr. Rosindell: It is all a question of balance. Of course, there are examples in which certain rules need to be introduced. No one is suggesting that we should live in a free-for-all world. Trade provides wealth and jobs and gives people opportunities, so we should focus on trade. We should not only impose rules and regulations, because that does not work.
Let me give a few examples of what happens in the real world. The International Monetary Fund and the World Bank estimate that because of restrictions on the trading of textiles and clothing, 20 million potential jobs have not been created. Regulation will not solve that. According to Oxfam, import tariffs cost developing countries about $43 billion a year, and the total cost of all forms of trade barriers rises to more than $100 billion, which is more than double the total amount of development assistance. Again, how will regulation solve that? The European Union common agricultural policy and the recent US Farm Bill force farmers in poor economies to compete against massively subsidised farmers in developed markets. No regulation can solve that, only the liberalisation of trade. I hope that hon. Members will accept that those facts represent the real injustices.
I want a system that rewards success and allows businesses to flourish wherever they are because that leads to the eradication of poverty. That would require the scrapping of subsidies, the abolition of barriers and, hopefully, the slashing of tariffs. The system would embrace free markets and ditch protectionism.
Proof of the success of that lies in countries such as China where the number of rural poor declined from 250 million in 1978 to 34 million in 1999, largely as a result of expanding trade. Similarly, the level of absolute poverty in Vietnam has been cut by half in 10 years. In India, trade policy reform brought about economic growth that led to a reduction of between 5 and 10 per cent. in national poverty rates.
Furthermore, the Centre for International Economic Studies says that if developed countries fully liberalised barriers to imports, such action would generate gains of more than $600 million for Indonesia, more than $2 billion for sub-Saharan Africa, more than $3 billion for India, China and Brazil and more than $14 billion for Latin America.
I urge the Government to use up and coming trade rounds to implement market liberalisation and to help developing economies to help themselves. People in developing countries should be treated as people, not charity cases. Above all, developing countries should be given a truly fair deal.
6.12 pm
Sandra Osborne (Ayr): If it is not a contradiction in terms, we have had an enjoyable debate, despite its serious topic. We have heard interesting contributions and although it is slightly unfortunate that the consensus has been broken by the hon. Member for Romford (Mr. Rosindell), the debate has been welcome.
I welcome the Minister of State's commitment that prioritisation will be given at Cancun to reduce agricultural support for rich countries and to ensure that the world's poorest countries have access to affordable medicines. The Opposition called the debate—I congratulate them on that—at least in part because the Trade Justice Movement's campaign will happen this weekend. I want to raise several of its fears and concerns, especially about decision-making processes in the World Trade Organisation, as I mentioned in my intervention.
I have often heard Ministers say that one of the advantages of the WTO is that decisions are made by consensus—the Minister of State repeated that earlier. We all know that there are official decision-making processes but that outside that pressure may be brought to bear that does not necessarily reflect a consensual approach—the word blackmail springs to mind, if that is not too strong a word. I appreciate that that is a cynical view but it is widely held, especially among my constituents who are involved in the Trade Justice Movement. I shall raise several issues that they highlighted.
The Minister needs to tackle the issues head on so that we can address our constituents' concerns when we meet them this weekend. The Secretary of State for Trade and Industry has acknowledged the deep mistrust felt by developing countries, which believe that the richer nations are once again trying to dictate the terms of economic engagement. However, we have also been told that we began to put all that behind us at Doha and we now have a more transparent process of negotiation. A trade round was launched which, for the first time, put development at the heart of the negotiations.
I applaud the Secretary of State's undertaking not to accept or agree to any trade proposal that would damage the prospects of developing countries trading themselves out of poverty, but, in many ways, it is those countries that she will have to convince. In spite of much talk of consensus, which I would support if it were genuine, severe misgivings have been expressed by many developing countries about expanding the WTO agenda to include what are known as the new issues, not least because, as the Minister of State admitted, little progress has been made on agricultural reform and health care. Most hon. Members have agreed that those should be the priority at Cancun.
I want to specify instances in which dissent has been voiced to the WTO. I know that the Minister will be aware of that dissent, which contradicts the seemingly consensual approach and is cause for concern. In May 2001, a report of the meeting of the G15 summit level group, which now consists of 19 countries, stated:
- "The WTO should focus on accomplishing its current work programme rather than entertaining new issues which will create additional obligations on developing countries."
- "The Singapore issues"
- "not within WTO competence in developing multilateral rules",
- "Members are not convinced that negotiation in these areas would deliver benefits to African countries . . . These issues would overload the WTO agenda."
Developing countries continued to express concern as recently as April 2003 at the WTO trade negotiations committee in Geneva when the Africa group and the least developed countries reaffirmed their opposition. The Government know of those concerns, but I have highlighted them because I do not want to tell my constituents not to worry about the developing countries having their place at the negotiating table, where consensus prevails, if that is a cruel deception. I look forward to my hon. Friend's comments on that.
Like the hon. Member for Richmond Park (Dr. Tonge), I, too, should like the Minister to clarify the position on the general agreement on trade in services. Fears have been expressed that GATS poses a threat to UK public services. The Government's consultation document states that most WTO members are content and that none is challenging the "accepted interpretations" of article 1.3—that public services supplied in the exercise of governmental authority are excluded from GATS. But fears are still being expressed.
I have an active local branch of the World Development Movement. I congratulate it on its good work and look forward to meeting it this weekend. Only last week, however, I attended a local gala where the WDM had a stall. It was festooned with posters saying, "A threat to UK public services by GATS". So if an agreement has been made that poses no threat, someone, somewhere is telling lies. I seek clarification on that so that we can reassure our constituents at the weekend.
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