European Standing Committee C |
|
Mr. Alexander: The Oxfam letter. Mr. Brazier: I am sorry, I am referring to Oxfam again in this context. In its letter, it urges
Comparisons of the systems in the United States, Canada and the EU for assessing rules of origin bring out some interesting facts. In 1999, Madagascar exported just under $50 million-worth of clothing to the US. The following year, the US introduced the African Growth and Opportunity Act, which had far less restrictive rules of origin for African exporters. Clothing exports from Madagascar to the US more than doubled in one year to more than $115 million a year. In 2003, Canada relaxed its rules of origin for all least developed countries, and within a year exports
Lesotho, which must be one of the poorest countries in the world—I do not know quite where it is in the batting, but I guess that it is one of the 10 poorest ; it is certainly among the poorest 50—[Interruption.] The hon. Member for Workington wants to intervene, so I must give way to him. Tony Cunningham: It was the pronunciation, that is all. Mr. Brazier: The hon. Gentleman is right. I should be ashamed, as I have an historical connection with the country. Lesotho exports 400 times more to the US than to the EU, and six times more to Canada than the EU, despite the fact that the EU market is the largest. The rules of origin issue is at the bottom of that. I do not like to present the cynic’s view, but I am sad to say that we sometimes give with one hand and take a lot away with the other, although not always intentionally. The muddle that the EU got into after the tsunami, to which the Minister has referred indirectly, which has been tackled to a large extent, nearly became a classic case in point. Broadly speaking, we support the Government’s aims, and there is no question of a Division on this debate, but I am deeply concerned that we have produced too much of a philosopher’s wish list with the 27 treaties, to every one of the countries that are not among the 50 poorest will have to sign up to benefit from GSP+. Before insisting that countries sign all 27 treaties—perhaps we can do something to postpone the dates—we must go back to the issue of rules of origin. While upholding certain essential, basic standards that are agreed on both sides of the Committee, we must be careful that we do not go so far down the route of social engineering that we end up with lofty ideals that undermine the very progress that we all seek to achieve. 3.3 pmMr. Alexander: Given the length of time that I have already spent on my feet before the Committee, I shall endeavour simply to answer some of the specific points made by Opposition Front Benchers. I ask Members to forgive my earlier sedentary intervention, in which I acknowledged that I had not seen the Oxfam letter outlining the Canadian position. I discussed trade policy at some length with Jim Peterson, Canada’s Trade Minister, when I visited the Canadian capital, Ottawa, in December. I was greatly encouraged by his comments on the prospect of a successful conclusion to the Doha development round. That is one of the many areas in which Canadian and British interests are closely aligned. I assure the Committee that we have consulted Canadian scheme officials, particularly about the operation of their GSP scheme, and will continue to do so. Column Number: 23 The hon. Member for Canterbury raises an important point about rules of origin. At the beginning of the debate, I candidly acknowledged that the regulations do not deal with rules of origin, but we fully accept the significance of the issue in terms of the effective operation of access to the European market. I reiterate that, given the publication of the Commission for Africa report tomorrow and much of the work being done by the so-called sherpas, some real progress could result from the G8 summit in Gleneagles in July, enabling us to make further progress during the Hong Kong ministerial meeting at the WTO in December. The hon. Member for Canterbury mentioned Kyoto and, more generally, conventions, and asked whether something could be done to reflect concerns. The conventions apply particularly to GSP+ countries—a more limited number, therefore—but in the case of Kyoto it would be an obligation by 2008. However, there will be an opportunity to review problems during the review period in 2006–07, and his concerns about the application of the treaty to some of the countries in question will be covered then. The hon. Gentleman ranged more widely when he raised the issue of economic partnership agreements. He expressed concern about the possible loss of revenue as a result of the present negotiations. I have a couple of points to make in response to the hon. Gentleman’s two queries, one of which is a matter of principle and the other is a point of practicality. First, we support the move to a more open system of international trade. In that sense, we are not instinctively in favour of the tariff and import taxes that some countries still charge. The reason for that is not, as some would allege, simply a concern to ensure that British or European businesses are able to trade more widely. There is an accumulating level of evidence showing that those countries that have most successfully lifted their peoples out of poverty in recent decades have all been trading nations. In that sense, whatever we can do to incentivise more effective trade, whether by rules of origin or more generally in terms of the WTO round, should be encouraged. All that has to be judged against the backdrop of the structural adjustments that some fragile economies have to make—a problem that makes us determined to continue to work closely with the European Commission on economic partnership agreements. We want it to hold true to the words that Peter Mandelson recently offered on what was effectively a development review of EPAs. One of the initial changes that Mr. Mandelson made on assuming his position was to accept that it was necessary to prove that economic partnership agreements were in reality as development-friendly as they were designed to be. I was heartened to hear him acknowledge that the European Union does not have offensive interests in relation to economic partnership agreements; and I was further heartened when he announced a review mechanism whereby the Governments of African, Caribbean and Pacific
Mr. Brazier: What the Minister is saying is welcome, but it is not only about protecting infant industries. The other problem for some very poor countries is that putting the infrastructure in place to raise taxes by other means requires a certain level of development. After all, in this country nearly all our revenues in earlier centuries used to be raised—it is so much easier to collect money through customs than through a revenue department. That is why the transition towards free trade that we all support is so important. Mr. Alexander: The hon. Gentleman makes a couple of important points. The Government acknowledge the importance of a significant uplift in development assistance. I discuss such matters with NGOs regularly, and I believe that their concern about free trade—what they sometimes describe as forced liberalisation—and our concern to ensure a more open trading environment can be reconciled and resolved by ensuring that, at the same time as opening markets, we prove our good faith by significantly increasing the development assistance provided to those countries. They can thus achieve exactly the kind of infrastructure investment that the hon. Gentleman describes. It is humbling and challenging to realise that Africa, which according to a relatively recent report will feature prominently in tomorrow’s newspapers, has fewer fixed line telephones than the island of Manhattan. Underdevelopment on that scale makes a strong case for increased development assistance. It is a matter of pride that, through the international financial facility, the British Government are advocating a mechanism that could result in an uplift from approximately $50 billion to $100 billion of development assistance, as long as agreement can be reached this year by the leaders of the major industrialised economies. Tony Cunningham: Does the Minister accept that although we talk about dialogue with developing countries, many of them have a tremendous lack of capacity? For instance, Lesotho will not be sending 100 delegates to the WTO—it does not have the capacity to deal with such negotiations. We need to tackle that problem as well. Mr. Alexander: My hon. Friend makes an important point. That is why the Department for International Development supports developing countries being represented at the world trade talks and in discussions with the European Union. Often capacity in such discussions is thought to involve simply the capacity to negotiate, which is important; however, I argue that two points be borne in mind—the countries’ capacity to negotiate and their economies’ capacity to benefit from the opportunities that a more open environment gives. We need to continue to work on both those issues, to ensure that those countries can negotiate, and at the same time we must provide further assistance. Column Number: 25 My final point, before taking a couple more interventions, is that I have little sympathy with campaigners who say that because we need to build the capacity of the countries in question to participate in an organisation such as the WTO, there is a case for getting rid of multilateral institutions of that kind. The experience following Cancun, which was mentioned by my hon. Friend the Member for Workington (Tony Cunningham), was that the United States signed a growing number of bilateral trade agreements around the world. As my hon. Friend made clear, there was concern—considering the relative negotiating strength of the United States on one side of the negotiating table and a country such as El Salvador or Jordan on the other—that the cards were stacked heavily against the developing world. That is why, although it is important to uphold the principle of a multilateral rules-based system of trade, we need to prove our good faith in that endeavour by ensuring that additional support is provided to give countries the practical ability to negotiate. Richard Younger-Ross: The Minister has responded well to the point about negotiations and powers, but, in reality, forced liberalisation, as it is sometimes termed, means that the countries in question open their borders and cut their income, as was described earlier; there is a capacity in those countries to export but new produce may take three years to come on line. Does the Minister accept that they need to be in a strong enough position in negotiations to argue for stepped liberalisation, encouraging them to build their exports and retain a level of protection? Mr. Alexander: I accept the hon. Gentleman’s point; that is why we advocate asymmetric reciprocity. The sometimes mind-bending complexity of trade policy makes it a challenging focus for campaigning; we do not often hear campaign slogans that run: “What do we want? Asymmetric reciprocity! When do we want it? Now!” None the less, that idea answers the hon. Gentleman’s point, because we want, and are obliged to ensure, market opening consistent with the WTO rules. The hon. Gentleman is right, however, to acknowledge that the capacity of the countries in question to deal with potential imports from the developed world is considerably less, often, than the developed world’s capacity to deal with products from less developed countries. That is why the Government’s position, as set out in last year’s White Paper, used the idea of asymmetric reciprocity and same destination—that is more open markets—but different speeds of opening. There is a particular awareness, to which the Chancellor of the Exchequer referred in his remarks in Mozambique at the turn of the year, of the importance of sequencing market opening with the poverty reduction strategies of the countries. If those countries are to benefit from market opening of the kind that the WTO holds out as a prospect, investment in infrastructure—whether physical infrastructure such as telecommunications or roads, or systems of
Mr. Brazier: Will the Minister confirm, pursuant to his answer to the hon. Member for Workington, that the Government will now adopt the policy that we have for several years been pushing for, of introducing an advocacy fund to pay for professional economists, lawyers and others to assist poorer countries in their negotiations at the WTO and other bodies? Mr. Alexander: This is the second admission that I must make of my ignorance in the face of questions from the hon. Gentleman. I have not seen the letter that he referred to, and I cannot admit to knowledge of the Conservative party’s policy on the issue. I can, however, tell the Committee that £174 million has been spent by the Department for International Development since 1997 on capacity building, to ensure that countries have the capacity to participate in negotiations. I am sure that hon. Members on both sides of the Committee would see that as the way forward. Mr. Hugo Swire (East Devon) (Con): The creation of the advocacy fund has been my party’s policy for some time now. The fact that the Minister has not had time to study it suggests that we have not got our message across. In principle, does he not agree that it would be a good way of progressing? Mr. Alexander: I am sure that everyone would agree that we would not want to make party political points on an issue such as this. I would generously acknowledge the conversion of the Conservative party to having concern for the issues given the real-terms cuts in the aid budget during the 1980s and 1990s and the absence of the then Prime Minister from the events of Live Aid 20 years ago. By contrast, the fact that in Britain today those campaigning on trade policy, aid and debt reduction are doing so with the Government, rather than in opposition to them, shows just how far we have come. Mr. Brazier: May we just put on record, so that there cannot be any discussion about it, that it was a Conservative Chancellor of the Exchequer who started the worldwide programme of debt reduction? Let us clarify that historical point. Mr. Alexander: If, as I presume, the hon. Gentleman is referring to the right hon. and learned Member for Rushcliffe (Mr. Clarke), who knows a great deal about the developing world given his commercial interests, I am happy to accept that he took some action. However, any objective assessment of the work since 1997— The Chairman: Order. I do not think that it is suitable that we talk about a Member in such a way when he is not present. Mr. Alexander: I respect your point, Mr. Caton. I shall return to the substantive point, which is that whether we are talking about trade policy—which we are endeavouring to discuss today—debt reduction or
It is also fair to say that the incoming Trade Commissioner of the European Union, Peter Mandelson, has in recent months candidly acknowledged the importance of driving forward the agenda. That is to be welcomed, notwithstanding the smirks coming from Opposition Members. We must recognise that we are only one of 25 countries in the EU, whether that is in relation to GSP, GSP+ or the EU’s wider approach to the Doha development round of talks in Hong Kong later this year. That said, we have a unique opportunity this year—with the G8 meeting in July, the Government’s proposals for an international financial facility to uplift aid, and the Government’s ongoing work with
Question put and agreed to. Resolved,
Committee rose at eighteen minutes past Three o’clock. |
| |
| ©Parliamentary copyright 2005 | Prepared 11 March 2005 |