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Fair Trade

2.30 pm

Huw Irranca-Davies (Ogmore) (Lab): It is a great honour to be given this opportunity so early in the new Parliament to address the key issue of international social and economic justice, particularly at such an opportune moment. As we approach the G8 summit, World Trade Organisation talks and a six-month European Union presidency, it seems that the stars are aligned in such a way that this could be an historic moment for not only the Government and Parliament, but how we lead the world on this agenda.

I intend to address how we should be tackling what I see as a tyranny of oppression that affects so much of the developing world. It is not a tyranny that any dictator has imposed, but a tyranny of oppression that we can see symbolised by poverty, disease and malnutrition and a lack of access to water and basic sanitation, health care and education. It is a tyranny of oppression that is fixed by a set of global circumstances that it is within our power as international actors to do much to alleviate.

Today in the United Kingdom, the moment is right. We have a recently re-elected Government who are committed fully to international development, and we also have cross-party support for tackling global poverty. Crucially, the UK will also shortly assume the presidencies of both the EU and G8 in the run-up to the vital WTO talks in Hong Kong. For a brief moment, it seems that everything is lined up in the right direction.

Perhaps most significantly, the British and international publics are pressing for action, most visibly through campaigns such as the momentous Make Poverty History campaign but also through others such as the excellent Trade Justice Movement, which has lobbied us so effectively in Parliament over a number years. Several representatives of the Make Poverty History campaign have informed me that they have been overwhelmed by the public's enthusiasm for an ambitious agenda. Indeed, the campaign's ubiquitous white wristbands—even though they have become a focal point for the powerful negative externalities of global trade such as work force exploitation—are symbolic of perhaps the greatest groundswell of opinion in support of global action since Band Aid 20 years ago.

Make Poverty History is a unique campaign, because it is not asking us to pledge money per se; instead, its primary goal is structural. It asks us to challenge how we view the developing world and our relationship with it. Essentially, Make Poverty History is asking us to make a long-term political pledge, with each wristband symbolising a commitment on the part of its wearer to pressurising those in power to tackle the global inequalities that condemn billions in the developing world to grinding poverty. I firmly believe that in Britain today we have an unprecedented opportunity to respond positively and energetically to that popular pressure.

The political developments to date, with the agenda led by the Government and the popular pressure to reform, are considerable, and we have great cause to feel optimistic. Ultimately, however, our achievements to date, our ambitions on debt relief and aid, and our hopes of achieving the millennium development goals
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will be hugely diminished if we cannot combine that with similar concurrent progress on trade. Of the three main concerns of the Make Poverty History campaign—aid, debt relief and trade—it is the last that I wish to discuss today. That is because I believe that, although we can never afford to be complacent, we are already pushing the agenda on debt relief and aid, and others will follow if we keep our nose to the grindstone.

The momentous efforts of our Prime Minister, who was much criticised for spending time on international diplomacy, are to be applauded. When his personal commitment and efforts bring President Bush to the table, jointly proposing to write off the debt of 32 countries if coupled with economic reform and the measures to tackle corruption, this will be a milestone in transatlantic co-operation and bode well for the G8 summit. As the White House spokesman Scott McLellan said only a few days ago, debt relief was

On the surface, the aid package is much less hopeful, and I trust that the Prime Minister and all his Ministers will make every effort to persuade the President to go further and faster. Indeed, I note that some are already speculating that that will happen. I would welcome the Minister's reassurance that diplomatic pressure will continue behind the scenes up to G8 and beyond, because he knows that if the US were to match the 0.7 per cent. of national income recommended by the United Nations for international aid, the US would not only get the thanks of the global community but it would help us reach the target of an extra £14 billion being pledged before G8, and I would be first to send a note of congratulations to the White House.

It is on international trade justice that we face our stiffest challenge, and our efforts in that arena will ultimately define the limits of our success in the crucial months ahead. The US Trade Secretary has set his face against calls for an immediate cessation of cotton and sugar subsidies, as demanded in the Commission for Africa's report, even though the World Trade Organisation has ruled that US cotton subsidies are in breach of trade rules. Even on our own doorstep, the indefensible horror that is the common agricultural policy gives the lie to those who constantly point an accusing finger at the US alone. CAP was described by the Commission for Africa as the world's most protectionist trade regime. To make it worse, abuses of trade rules by both the US and the EU have consequences that are so transparent and obvious that no sane person would not cry out for immediate reform.

Whenever we look back at the millions of people harmed by smoking, we try to identify the point in time when the manufacturers unarguably knew what their product was doing. We did the same with health claims in the UK coal industry in order to determine liability for the billions of pounds now being paid out because someone knew that damage was being done to miners' health.

It is now clear—it has been clear for a while—what damage is being done to developing and impoverished nations and those at the receiving end of the protectionist policies of the US and the EU. We are complicit unless we move to change those abhorrent rules of trade that dump subsidised products on developing nations and undercut their indigenous
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agriculture and industry. It is only through fair trading arrangements that development can be sustainable in the long term. Although aid and debt relief are vital—they grant developing nations a breathing space—without equal terms of trade, such countries can never hope to grow and prosper.

Handouts and bail outs provide little in the way of incentive to invest in the construction of a vibrant industrial base, a flourishing agricultural sector or a robust trading infrastructure. Nor can they ever hope to provide the sort of stable, consistent funding upon which adequate vital public services can be financed. At best, they keep developing nations in a state of perpetual hope—and, at worst, in permanent despair.

From a hard-nosed western perspective, we would clearly benefit from fairer trading arrangements with the developing world. Apart from the overwhelming moral motivations, there are powerful economic and political imperatives for fair trade. For example, CAP export subsidies sting the British public twice over. According to Oxfam, not only does the policy cost UK taxpayers £3.9 billion a year, but, as consumers, the average family of four pays £800 extra more every 12 months than it would in the absence of CAP.

Moreover, aid and debt relief do not represent long-term value for money for the taxpayer. That is especially so if the recipients of the money are simultaneously denied the opportunity to repay the donors by generating their own wealth through productivity and trade.

Andrew George (St. Ives) (LD): I congratulate the hon. Gentleman on the case that he makes. Although I accept what he says about import barriers and especially export subsidies, does he not accept that the most recent and significant reform of the common agricultural policy has, from the beginning of this year, largely removed production subsidies from agriculture throughout the EU, and that although the process is transitional, at least it is now actually beginning?

Huw Irranca-Davies : I thank the hon. Gentleman for that helpful intervention. We are undoubtedly moving in the right direction, and the speed at which we do so is important. I agree that progress is being made, and that it is being made because of international pressure, applied not least by this Government. We need to continue to make progress, and to do so faster, because the implications of not doing so are staring us in the face at this very moment.

I am very pleased that the UK Government have recognised the central role of trade in development, and that we have built considerable momentum in that direction to date. Of course, if we are to achieve the millennium development goals, secure the conditions for a successful pro-poor outcome to the Doha round, and ultimately lay the foundations for a fairer global trading system, no one can deny that we, the Minister and his colleagues face a challenge of immense proportions. However, as the non-governmental and campaigning organisations acknowledge, we are taking important steps in that direction. Indeed, the Government have already shown their clear desire to play a leading role in tackling global trade injustice.

Perhaps the most significant recent development has been the Government's recent acceptance that the Commission for Africa's March 2005 report should
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form the basis of UK policy. That is hugely welcome. It is particularly encouraging when we consider that powerful document's central argument on trade: that developing nations should be able to manage their own trade policies and paths to development rather than having them dictated by wealthy states. Leaders of developing countries have frequently reiterated that sentiment to those who are willing to listen. The President of Tanzania expressed that view succinctly when he implored developing states to recognise that

As the Commission for Africa's report rightly stresses, it is simply inappropriate to dictate policy to fellow sovereign nations. Isolated from key decisions over their own future and often sensing little immediate progress, Governments and citizens of poor countries are also likely to become progressively less enthusiastic about taking the painful measures that developed nations have declared necessary for their reform and recovery. More often than not, the result is stagnation, opposition and even resentment both domestically and internationally. By contrast, the results can be considerable when poor nations are provided with the    opportunity to manage their own economic development.

The UK Government have acknowledged the force of that argument. In its July 2000 White Paper, "Making Globalisation a Force for Good", the Department of Trade and Industry underlined the importance of affording developing states the autonomy to determine their own development priorities. It clearly stated that

The enthusiasm of the Minister, of Cabinet Ministers, and of the Prime Minister for pushing that message in the coming months is essential, because it is only by building a multilateral consensus on the importance of enhancing the room that developing states have to manoeuvre on trade issues that we can hope to secure significant and lasting change. We must therefore have those goals in mind when we assume the presidencies of the EU and the G8. Europe will undoubtedly be our busiest arena in this respect. The fact that the UK presidency of the EU will inevitably be dominated by the consequences of the rejection of the European constitution will certainly make it even busier, but I see no reason why that should necessarily distract us from our focus on eradicating global poverty.

After all, if Europe is indeed looking for a new direction, a new purpose and a sense of collective mission, we will be extremely well placed to shape that new identity positively. To that end, we must be sure to highlight two ever-present challenges on the international fair trade "to do" list—subsidies and market access. As the Minister knows, the economic partnership agreements will provide a prime opportunity to raise the issue of market access.

With the possibility of free access to the European market, EPAs could hold great promise for the African, Caribbean and Pacific countries involved. According to the Trade Justice Movement, however, that promise will
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be negated if the EU negotiates EPAs in a way that includes reciprocal trade liberalisation and new rules regarding the Singapore issues, namely competition, investment and public procurement. The path that the EU takes could have crucial implications for poverty reduction and for development. A 2003 impact assessment by PricewaterhouseCoopers postulated that a bad EPA had the potential to destroy west Africa's manufacturing sector, so we must move forward with consideration. The pace and structure of reform must be in the interests of the developing nations, not just the western, leading developed nations.

Alternatively, the EU could back a fair EPA, or an alternative viable agreement that does not demand full and immediate liberalisation. The European Commission could also encourage its developed world partners at the WTO towards a firm agreement on special and differential treatment that empowers developing states to set tariff levels according to their specific industrial and agricultural requirements. If the EU can be coaxed, cajoled, bullied or bested down the latter route, it will represent a significant boost to the long-term development potential of many least-developed countries, and it will help to build an invaluable developed-world consensus on the benefits of empowering poor nations to choose how, when and what to liberalise. Such an outcome would be a historic coup for the UK presidency.

Halting unfettered, pure, laissez-faire liberalisation will not make developing nations any freer to manage their economies if their vital agricultural sector is simultaneously undermined by developed-world export subsidies and dumping. That point has been highlighted by the case of the EU sugar regime. Conspicuously absent from the "Everything but Arms" agreements until 2009, the price of sugar in the EU, according to the Catholic Fund for Overseas Development, has been maintained at three times the world market level by tariffs of up to 140 per cent. It is perhaps unsurprising that the WTO recently ruled that the sugar subsidies are illegal, as it did with similarly unjust American subsidies of cotton. It is vital that we interpret the ruling in a way   that enhances development opportunities by eliminating those subsidies and increasing the import quotas from less developed countries.

More generally, the UK must endeavour to ensure that a core priority of its EU presidency is the rapid phase-out of agricultural subsidies, and it must ideally aim for the Commission for Africa's goal of 2010, even though it is ambitious. Moreover, as is appreciated, progress on agricultural subsidies is central to the ultimate success of the Doha round, and we must be ceaseless in our insistence that the EU agrees a date at the WTO ministerial talks in Hong Kong in December for the total phase-out of subsidies.

In addition to the EU presidency, the G8 presidency and the Gleneagles summit give clear opportunities for the UK to press a new model of global trade on its    developed-world partners. Although there are institutional limitations on the G8 in terms of its ability to influence the WTO, the UK can still reasonably hope to build momentum for change if it uses that platform to reiterate consistently a pro-development line. After all, those Heads of State assembling in Perthshire in July
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ultimately control the bulk of global trade and unofficially dominate the major international financial institutions.

John Bercow (Buckingham) (Con): I endorse the thrust of what the hon. Gentleman says, but I hope that he will not ignore or play down the significance of tariff barriers. Is he aware that in 2003, Sri Lanka, for example, paid no less than $244 million to the United States in duties and $77 million to the European Union, and that those figures were notable by comparison with Indonesia, which paid respectively $426 million and $180 million? Does he agree that those countries recovering from the tragedies that have afflicted them simply cannot afford to dispense with $1 billion a year by pumping that money into the treasuries of already very much richer nations?

Huw Irranca-Davies : The hon. Gentleman makes a clear point about why there cannot be a blanket, universal approach. Things must be done on a nation-by-nation, case-by-case basis because of the different situations in the developing nations. The historical development of subsidies, tariffs and protectionist measures in one nation is different from another. He makes a good point.

I will return to the subject of trade talks—looking six or seven months ahead. As with the presidency of the EU, it is imperative that we approach the G8 summit with a clear set of goals. In terms of trade, foremost among those must be to bring significant pressure to bear on the issue of enforced liberalisation through International Monetary Fund and World Bank loans and debt relief packages. The recent review of conditionality by the Department for International Development set a positive tone in that respect and was most welcome. It recognised the need to place development at the heart of the constructive relationship between donor and recipient. The concept of partnerships for poverty reduction is groundbreaking in its recognition that dialogue rather than dictation should characterise the interaction between poor and rich states. Such a message must be fundamentally promoted in discussions with our G8 colleagues.

If we are seriously to commit to enhancing the developmental autonomy of poor states, another key issue will be aid for trade. As the Commission for Africa report points out, developing nations struggle to adjust to changes in trading patterns and to capitalise on fairer trading conditions because of their weak capacity to trade. Targeting aid specifically at improving trading infrastructure, such as by securing efficient transport links, reliable energy suppliers or enhanced technical expertise, is therefore vital for assisting development. The costs are unsurprisingly high. Recent World Bank research estimated that an additional $10 billion to $20 billion a year will be needed to ensure adequate, basic trading infrastructure investment in the developing world. The international finance facility proposed by the Treasury, which is facing some stormy waters overseas, would go a long way towards meeting those costs, as part of our much wider efforts to achieve the millennium development goals.

Of course, there are many other issues that we could and should push our developed world partners to take urgent action on. The requirement that will determine
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success in all those areas is, above all, the need to change attitudes. We can only ever hope to nudge Governments gradually and incrementally towards a fairer trading system if, fundamentally, they see the real need and appreciate the benefits. If Governments truly believe that trade justice is critical and if they are willing to prioritise it and to think about security as a global concept, the chances of developing states gaining greater freedom to determine their own path to prosperity will surely be enhanced. That is why the popular campaigns running at the moment are so important.

There will, of course, be vested interests in any state that stands to lose out from a fundamental change to the global trading system. Given the potential for that opposition, the timing will never be perfect for any Government to approve such changes. When asked to carry out such restructuring by another Government, it is always easy to negotiate, bargain and agree small concessions dressed up in generous oratory. If Governments are asked to make such changes by a significant proportion of their electorate and with the support of their own cross-party politicians, however, it becomes much easier to go ahead and more risky to procrastinate or fudge. With a transnational mass movement now agitating for change and a Government committed to taking action on global poverty, we have genuine cause to hope that this could be the year when inertia is no longer the easy answer to uncomfortable questions.

I do not underestimate the challenge that faces the Minister and his colleagues in the months ahead. At times, it will probably seem to him that all he hears are voices in the press and the non-governmental organisations, and politicians and colleagues, berating the Government for failing to achieve every milestone that I know that he so much desires to reach. At the outset of a very tricky and turbulent period, I say to him that he has our best wishes, our support and our hopes. When any hurdle is failed, he will hear us shouting from the sidelines to get up again and take another run. That may sound critical, but it is actually encouragement. When each hurdle is cleared, he will hear the cheers and he will deserve them. This debate is part of the clamour for action. Accept the noise for what it is: a growing international mood that we cannot turn our backs on our neighbours any longer.

We want to succeed. Change the rules so that the voice of the developing nations is heard more loudly from the sidelines. Change the rules so that the developing nations are actually playing on the same pitch, on a level playing field. I am grateful for the opportunity to raise this issue and I urge the Government not to blink when confronted with vested interests. "At our best when at our boldest"—never has a truer word been spoken.

2.56 pm

Dr. Vincent Cable (Twickenham) (LD): I congratulate very sincerely the hon. Member for Ogmore (Huw Irranca-Davies) on his choice of subject at an opportune time: the lead-up to the summit. It is very appropriate that he introduced the subject and did so in an effective way, emphasising the moral dimension behind trade policy that is often overlooked. I agreed with a large part of what he had to say. Indeed, I would
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subscribe to some of his more colourful rhetoric about the indefensible horrors of the common agricultural policy, as well as his more general arguments.

I shall explain why I am speaking in an unfamiliar Back-Bench role. It is partly because I share the Chancellor's view—and that of the leader of the Conservative party expressed today—that we cannot treat trade policy as if it were in a separate box. It is part of the broader approach to global development, the international economy and the future of developing countries. There is no point trying to deal with aid and debt relief in one compartment while ignoring the trade dimension: they are part of an interrelated whole. Those of us who are interested in better economic policy, particularly helping growth in developing countries, have to attend to trade policy issues.

On a purely personal level, I spent a substantial part of my professional life dealing with development matters in developing countries, particularly trade policy. I argued for many years for a trade liberalising agenda, but things are still—alas—very much the same as they were 20 or 30 years ago. Many of the trade barriers that we argued about vehemently in the 1970s are unfortunately still there, but none the less it is important to restate the arguments.

I take a slightly different tack from the hon. Member for Ogmore; I want to reinforce what he says, but I have a slightly different point to make. Very often we use vocabulary about trade justice and fairness that is confusing. The word "fairness" in trade policy is used in several quite different, and sometimes rather unhelpful, ways. I use the term "fair trade" in the sense of free and fair trade in broadly the same way as the hon. Gentleman. In a sense, it means free trade with a purpose: opening up markets, getting rid of distorting subsidies and achieving the aim of helping poor people in poor countries.

Unfortunately, "fair trade" is often used by different people in different ways. Certainly, in the days when I was doing battle with the European textile lobby—a body called Comitextil— it would try to justify the introduction of quotas by using the term "fair trade policy". Very often, one finds American protectionist lobbies say that they are demanding fair trade, giving the term a completely different and opposite meaning.

The term is also used in a third way, which the hon. Gentleman used, to defend non-reciprocity in trade. There are arguments about reciprocity and I shall come to them in a moment, but the meaning is different and it does not just concern open markets. In some contexts, it defends protection. There is also the issue of preferences. "Fair trade" is often used as a way of justifying preferences for some developing countries over others, and defending quotas for supposedly more worthy developing countries. This is an issue in relation to textiles, sugar, bananas and so on. We need to deal with that.

Lastly, "fair trade" is used in a context that we often encounter in supermarkets, where fair trade products are advocated because they are produced with better social standards or in some other way. That may be desirable but, again, the meaning is completely different.
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The words "fairness" and "justice" are used in many ways and I want to be a little more precise about what exactly we are talking about.

Sometimes the arguments are muddled unhelpfully and a good example of that is textiles. There has been a retrograde move in international trade policy in the past few weeks. Regrettably, the Trade Commissioner in Brussels, Mr. Mandelson, who had made some effective interventions, seems to have gone backwards and accepted demands from the French Government that textile quotas should be strengthened or reintroduced, particularly for China. It is clear that those demands have come from producer interest groups in western Europe, but quotas have been justified on the grounds that we must protect other developing countries from China. That is a separate argument, but it is being used and intermingled dishonestly. We are used to that in the sugar agreement, which is a complex problem that has been with us for three decades at least. There is an unholy alliance between sugar beet producers and high-cost producers in the Caribbean and elsewhere to protect an inefficient regime that does great harm to developing country exporters. Different aspects of fairness are used in different ways and sometimes unhelpfully.

I turn to two tricky issues of trade policy, and there is a right answer to neither. The first is reciprocity, upon which the hon. Member for Ogmore touched. Should developing countries concede liberalisation when negotiating trade agreements and, if so, in what circumstances? During the election and earlier, we all received deputations from trade justice groups, Churches and so on. I agreed with 95 per cent. of their arguments, but they wanted me to say that opening up the markets of poor countries is a bad thing and that we must fight against that. That may be so, but many poor countries such as India have suffered great damage from excessively protective trade policies, and I am not sure that I want to subscribe to them.

We must consider more critically the argument for reciprocity. Under existing rules, which were developed under the general agreement on tariffs and trade and have been carried forward by the World Trade Organisation, developing countries can seek special and differential treatment of trade in goods. Different negotiating principles are involved in services but an offer principle applies and countries do not have to offer concessions if they do not want to. Poor developing countries, particularly in Africa, that do not want to participate do not have to do so.

The World Trade Organisation specifically protects developing countries from undue pressure to open up their markets if they choose not to do so. Many of the lobbyists on trade justice seem not to appreciate how the system operates and mix it up with a separate matter: how the European Union, in its bilateral relationships, and sometimes the World Bank, in its aid packages, use trade liberalisation as a condition.

The simple answer is that developing countries should not be forced to adopt policies that they feel passionately are against their interests. There should be no coercion, but in many cases it will be in the interests of developing countries to pursue more liberal policies. Throughout south-east Asia, Thailand, Malaysia, India
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and China have radically reduced their import quota and tariff regimes to their own betterment. That should not be imposed, but it is often in their interests.

Ann McKechin (Glasgow, North) (Lab): The hon. Gentleman made an interesting point about reciprocity and referred to China and the far east—the Asian tiger economies. Does he agree that they had a period of protectionism to build up their domestic industries before liberalising their tariffs and allowing themselves to be open to competition from elsewhere? That was one of the keys to their success.

Dr. Cable : Some did and some did not. History is varied, but there is a model and Korea is perhaps the best example of a country that developed behind severe barriers to trade and foreign investment, grew spectacularly rapidly and, in recent years, opened up both to trade liberalisation and democracy. It has carried that off effectively. However, other countries—for example, Hong Kong and Singapore—never had trade restrictions. From the outset, Taiwan had a much more liberal economic system. There were big differences among the Asian countries.

At the moment, the problem area is Africa. Is it right that African countries should be asked or recommended to break down trade barriers? The answers are complex. One of the first jobs I ever had, as a young economist, was working in African government in Kenya. I was involved in the negotiation of industrial projects—concerning pulp and paper factories and textile factories—that depended for their viability on quotas and tariffs. For decades, those institutions have drained wealth from African countries in a damaging way. It would have been better for the countries concerned if they had pursued a more liberal trade policy. As it is Africa, we are not supposed to say that, but trade liberalisation might well have helped, rather than hindered, those countries in their development.

I accept the point that the hon. Member for Ogmore made that it is a different story in agriculture. When large numbers of peasant farmers are subject to the fluctuations of world commodity markets, a different set of arguments kicks in. However, we should not automatically buy the argument that it is in the interests of developing countries to pursue closed economies for a significant period of their development.

John Bercow : As usual, the hon. Gentleman is making an immensely challenging and thoughtful speech. Does he not agree that, despite the complexities of the issues and the need for a case-by-case approach, there are at least two guiding principles that are relevant to the duties of developing countries in trade policy? First, developing countries certainly should not be required to open their markets to subsidised exports by countries that are already much richer than they are. Secondly, if developing countries are to maintain some policy space to continue their own tariff or subsidy regimes, retention of those regimes should be time limited. There can be no benefit to developing countries permanently seeking to sustain themselves using a sort of dependency culture.

David Taylor (in the Chair): Order. Interventions should be brief.

Dr. Cable : Those are both good points and I agree with them. The first is especially useful. As I understand
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it under trade laws, if one is faced with competing inputs that are subsidised, it is possible to introduce what are called countervailing duties. It is recognised that it should not be allowed to dump subsidised products on other countries, so the principle is accepted. If developing countries are being coerced into importing subsidised food or other products, that is clearly wrong and those countries should be protected from it. I completely accept that point.

The point about time limiting relates to my second point, which is about the issue of preference. One of the complications that has grown up in the trade system is often unhelpful. It is that different groups of countries are protected against other developing countries. I have great suspicion about the layer of preferences that have been introduced by the European Union playing off one developing country against another. That is now happening in sensitive areas.

One of the problems in textiles, which I will come back to, is that, after decades of arguing, the rich countries have been persuaded to get rid of—eventually—the quotas that were first introduced with the Lancashire long-term textile agreement in the mid-1960s and that were consolidated in the multi-fibre arrangement of the 1970s. After three decades, they were at last persuaded to get rid of those quotas. Now, because of competition from China, the argument is resurfacing that the decision was premature and we need to reintroduce the quotas, not just to protect our industries but to help poor little places such as Lesotho and Swaziland that have cut out factories that try to exploit little loopholes in the quota regime. Although I am immensely sympathetic to Lesotho, Swaziland and the rest of those countries, which include, on a much bigger scale, Bangladesh, there is great danger of that argument being seriously abused to perpetuate a regime that is massively inefficient and causes great cost to developing countries and our own consumers. I hope that we will not go down that road.

My next point will reinforce what the hon. Member for Ogmore has been saying. It is right that problems of market access and production subsidies are the main enemies and the things that must be fought. We have to argue for access to the markets of rich countries, and for production subsidies to be got rid of, particularly in sectors such as cotton. Such subsidies are shameful and inexcusable. Those should be the priorities.

My final, simple point is that everything must take place within a framework of rules. Poor countries and small countries have more to lose from anarchy than big rich countries, such as the United States or China. That is why the World Trade Organisation is so important. One of the more dispiriting aspects of the entire debate on trade policy and fair trade is that many people who share my emotional support for developing countries and their aspirations have become hostile to multilateralism and are attacking the WTO. Any organisation has its weaknesses, but to destroy the rule of law in trade would be deeply damaging and retrograde. The debate must be located in that context.

3.11 pm

Ann McKechin (Glasgow, North) (Lab): I, too, welcome the choice of debate from my hon. Friend the Member for Ogmore (Huw Irranca-Davies). It is timely
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and appropriate given the current major debate on the best way for the international community to address world poverty and particularly poverty in Africa. As has been commented, this year will be a key period in political history if we are to achieve meaningful change.

Our thoughts are focused on the G8 summit in Gleneagles in a few weeks' time. I am encouraged that there are real signs of progress on the issues relating to aid and debt, but we need the world leaders at that summit also to make progress on the third main issue: world trade. As we can tell from today's debate, that is possibly the most difficult and contentious of those three major topics. It involves not only the simple movement of what is still a tiny fraction of our wealth to poorer nations, but substantial change in the operation of our economies and a phasing out of the huge range of subsidies and tariff rates that currently protect a sizeable amount of our own production. We need our political leaders to show courage and determined commitment to achieve change, and to do so urgently, before the opportunities fade away from us.

Our last substantive debate on world trade took place about 18 months ago, when we had the opportunity to discuss the excellent report prepared by the International Development Committee, following on from the Cancun ministerial summit. I attended that summit as part of the parallel parliamentary conference, so I had the opportunity to witness at first hand the frustration of many nations that their priorities on development issues were squeezed out by an overloaded agenda that eventually toppled over, with no real progress in any of the major areas. At that time, there seemed little sign that any substantial agreement would be reached, and there was a danger that major players, such as the USA, would slip back into relying on bilateral trade agreements and establishing free trade areas. However, there are now signs that most nations see the benefit of reaching a comprehensive multilateral trade agreement and, particularly in the west, there is increasing public pressure on leaders to consider the needs of the world's poorest in a development-focused round.

The Commission for Africa report highlights the fact that unless Africa increases its diminishing share of world trade, it will fail to achieve sustainable growth and poverty reduction. However much aid we put into the continent, if we do not increase its share of world trade, we will never achieve the goals. As the report points out, in stark contrast to what has happened in the emerging economies in India, China and Brazil, the last 30 years have seen stagnation in Africa, with the composition of its exports essentially remaining unchanged.

The commission identifies the two main causes of the collapse in Africa's share of world trade. The first is its low capacity to produce and trade, which has been consistently hindered by protectionist policies such as those in the European Union, as my hon. Friend identified. The commission does not hold back in condemning current trading systems. It states that

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Secondly, the commission identifies the advance of other nations such as China and India as having made it more difficult for Africa to break into world markets at this time, as competitors have established strong advantages on the world market. Any new trade agreement that we consider this year must take into account both those issues, and it must ensure that there is a proper sequencing of the reforms and that special and differential treatment obligations are an integral part of any final deal.

It is important that, when we reach agreement, a distinction should be made between the needs of middle-income and often larger nations, and those of the poorest nations, which include all those of sub-Saharan Africa. For a time at least, it will be vital to provide the poorest nations with some form of protectionism, so that they do not simply swap one form of export dumping from the USA and the European Union for a huge tide of exports from emerging economies, with which they cannot, at this stage, be reasonably expected to compete on anything like equal terms. We need to meet that challenge this year.

Since the Cancun summit, the EU has agreed to drop three of the most contentious Singapore issues: competition, investment and transparency in public procurement. The continued strength of the G20 group, which encompasses nations such as China, India and Brazil, shows that middle-income nations—we should recall that they comprise more than 50 per cent. of the world's population—are willing to show their weight on the world scene.

The recent cases brought by Brazil at the WTO tribunal against the EU and the USA on subsidies for cotton and sugar show that the G20 has a new and sophisticated political strategy, to which the richer nations will need to adapt quickly. That was completely underestimated at the Cancun ministerial summit, but now there is a growing realisation that the EU and the USA need to engage in the talks, out of not only altruism, but a recognition that they need to co-operate with emerging world economies if they are to protect their own trade positions in turn.

John Bercow : Does the hon. Lady agree that it is important that there should be a synchronisation of reform and relief in relation to sugar, for example? Does she accept that there is a real concern that if EEC reform takes effect in 2006, relief provision for developing countries suffering from that reform will take effect only between 2007 and 2013? There is an inequity that needs to be addressed.

Ann McKechin : Yes, I agree. The hon. Gentleman makes a very good point. The EU has a duty to ensure that a proper agreement is made multilaterally and that a tribunal ruling on which it has to make an immediate decision is not made against it. Unfortunately, in such a case, developing countries' needs would probably end up being ignored. Increasingly, the EU and the USA are realising that nations from middle-income countries are now prepared to take cases against them to the WTO and that they have to respond to that challenge, while taking into account, as the hon. Gentleman rightly pointed out, the needs of the poorest nations.

The agreement reached at the WTO last July involved concessions to eliminate, in principle, all agricultural export subsidies in the richer nations and substantially
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reduce trade-distorting farm supports, including specific action on cotton. That shows a new trend in the current trade talks. Crucially, the EU and the USA came to an agreement, even though each side had a tendency in the past to blame the other when pressurised on its own agricultural support. They agreed that a €3 billion reduction in EU export subsidies will be accompanied by a matching reduction in the USA's trade-distorting export credits and food aid.

That is a good sign, but the crucial test is whether a timetable for those changes can be agreed. They also have to agree about a large number of other outstanding issues concerning industrial products and services.

Prior to the ministerial meeting in Paris at the beginning of last month, the WTO director general, Dr. Supachai Panitchpakdi, indicated that a high level of convergence was still needed in five areas if there was to be a breakthrough at the Hong Kong summit in December, moving to a final agreement during 2006. He mentioned agreements on agriculture and on non-agricultural goods, the need for a critical mass in service officers under the general agreement on trade in services, on which there has been little progress since Cancun, as well as significant progress on rules and trade facilitation, and a proper reflection on the development agenda.

The Paris meeting last month concentrated on agriculture, and there was a welcome breakthrough on something that is so technical that I had a bit of trouble understanding what it is. Apparently, it is an agreement to calculate tariffs on a percentage basis of the goods value. I understand that that has held up negotiations for many months. All sides recognise that much more needs to be done before the next ministerial summit, which is due to take place in July. That is why the G8 summit, which will take place prior to that meeting, offers an additional opportunity for reaching further agreement on producing a clear timetable for tariff reductions. It is a good sign that the new US trade negotiator, Rob Portman, has declared that an agreement can boost jobs and prosperity, and can help lift millions of people out of poverty, if we do the right thing. I hope that our Government will continue to strive for further major concessions at the G8 summit, and will hold the USA in particular to its statements on supporting a multilateral deal.

Time is beginning to run short, particularly for the USA, in reaching that final agreement. The second term of the Bush presidency has witnessed an increasingly stormy relationship between the Senate and the President, and it is clear that there are strong protectionist tendencies in both the Senate and the Congress. In 2007, the President's fast-tracking negotiating authority will run out, and there is little prospect of it being renewed. Accordingly, it is vital that we have a skeleton agreement by the time of the December conference, and I hope that the prospect of success in getting that can be improved in the next few months.

I also support the statements of my hon. Friend the Member for Ogmore about the recent negotiations on the EU economic partnership agreements with the African, Caribbean and Pacific nations, and I especially support our Government's position on those negotiations. I share the concern of many that there seems to be an attempt to reintroduce the Singapore issues through the back door without equal rights to
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negotiate on EU regulations and subsidies, when it was patently obvious from Cancun that there is no call for this from developing nations. That is the group of countries that needs the highest level of concessions in their favour. I agree with the Government's approach: developing nations must be able to choose the pace, sequencing and product coverage of economic partnership agreements, and remaining EU tariffs should be eliminated, without conditions on the poorest nations. I hope that the Minister can give an assurance today that there will be no change in the United Kingdom's position on that.

I congratulate the Fairtrade Foundation on its continued success in the United Kingdom, in terms of both its market share, which increases by significant amounts every year, and its important advocacy work in trade issues and the need to secure trade justice for the world's poorest. I have been fortunate in being involved over the past few months in the arrangements to try to achieve fair trade city status for Glasgow; it would then have the accolade of being the biggest retail centre in the UK to have attained that status. I also welcome the announcement last week of the Scottish Executive First Minister, Jack McConnell, who wants to follow on from the excellent example set by the home nation of my hon. Friend the Member for Ogmore by achieving fair trade nation status for Scotland.

Many thousands of our constituents are greatly concerned about trade justice, and I know that they, along with Members present, hope that 2005 is the year in which we achieve the real breakthrough, by making world trade much fairer and freeing millions of people from poverty.

3.24 pm

Andrew George (St. Ives) (LD): I echo the final point made by the hon. Member for Glasgow, North (Ann McKechin): all who examine the opportunities to make poverty history recognise that 2005 is a pivotal year. If we fail this year, there will be a less rosy picture of the future for all the non-governmental organisations and campaigners who have campaigned for many years. They are hoping—with the G8 summit, the UN millennium council in September, the WTO talks later this year and the opportunity for the UK Government to take an important lead as a result of their presidency of the EU and of the G8—that this is the year of major change.

I also congratulate the hon. Member for Ogmore (Huw Irranca-Davies) on securing the debate, on doing so in such a timely fashion and on making such a strong case, which I endorse. I am well aware that as a new boy to these debates I could easily fall into the trap, as perhaps others have, of believing that coming new and fresh to them enables one instantaneously to find an inspired policy solution that has strangely bypassed armies of policy thinkers and academics over the past few decades. I do not hold that view and I reassure Members that I do not start from the position of thinking that I will inject the debate with that flash of inspiration, although I would like to think that one day I might. This is a question of probing the issue so that we can move it forward and of an Opposition party encouraging the Government.

The debate is largely consensual, which is good because we can concentrate on the positive things, but it could become weak and flabby and lose the sharpness of
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the challenging debates that the Chamber often experiences. The background is not just the opportunities that I mentioned, but the Live 8 rock event and the gathering of people concerned about achieving a positive outcome from the G8 summit in July. That has helped to raise the issue's profile. Those who have campaigned for years are aware that away from the glamour of the rock concerts, the hard graft on the ground in developing countries still needs to go on.

The fundamental principles of wanting to establish trade justice for developing countries is based on our understanding of a policy of enlightened self-interest: we have an interest but we must be enlightened to the extent that we are aware of the impact of our policies on those countries when we implement things. Let us consider the development of the policies, particularly by the west, over the past 10 or more years. My hon. Friend the Member for Twickenham (Dr. Cable) has much more front-line experience in that regard than me. There is much emphasis on the west's having involved itself in pursuing the self-interest part of the policy, but the enlightenment bit does not appear to have kicked in a great deal. I hope that that element of "enlightened self-interest" is kick-started in 2005.

Although I welcome what I hope is not momentary compassion from those who will attend rock concerts in a few weeks' time, the way that the debate is developing suggests that there is a certain schizophrenia among the public in this country and in the west in general. Sometimes difficult decisions have to be taken and people start saying, "We want to cut hospital waiting times", "Deal with the potholes in our roads" or, "Improve the rail service"; often the same people who turn up at the rock concerts or who wear the campaign wristbands will question why so much money is spent on debt relief and aid in other countries for people we do not know when we still have not got things sorted out in this country. We must bear that theme in mind. Political pressures will inevitably fall on us politicians, and we will have to face difficult decisions about the development of, and poverty in, less-developed countries when those topics are not in the media or the subject of public attention. However, we must sustain momentum.

When people in the west realise that the implementation of trade justice policies might mean that some parts of their country's economy become less profitable as the cold winds of global trade make some companies more marginal, and when they realise that improvements in labour standards in other countries might mean that we cannot buy our trainers, footballs and fashion accessories as cheaply, people may question why we have gone down that route. We must keep the public on board when pursuing those policies and we must recognise that there will be implications for our lifestyles and standards of living.

The hon. Member for Ogmore rightly emphasised the tyranny of oppression on the world's poor and the golden opportunity that we have this year. My hon. Friend the Member for Twickenham, who has a great deal of experience on this subject, while supporting the contribution made by the hon. Gentleman, pointed out that there may be more disagreement behind the scenes and behind the language used than there appears at first sight—for example, about the definition of the word
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"fair". Everything looks fair from someone's perspective if it benefits them but it is never fair for others on the receiving end of policies that do not benefit them. The language used in the debate masks more disagreement on the world stage than our debates here give the impression of.

My hon. Friend also rightly argued against the one-size-fits-all policy for future trade relations and emphasised the need to move as rapidly as possible away from export subsidies and trade barriers, which are unjustifiable across a large number of economies and commodities.

The hon. Member for Glasgow, North discussed the important role that the United States plays, and, in that context, we had the announcement of the outcome of the Prime Minister's recent visit to the US President. Although there were agreeable words at the press conference last night, I have significant concerns that the fact that the United States spends about $100 billion a year in pursuit of its policy in Iraq compared with $4 billion in Africa indicates its priorities. If we are to make a significant difference to the way in which the G8 and other countries pursue policies, it will be essential to bring the United States further on board.

I have a number of questions for the Minister, as I am sure he will be delighted to know. The first follows up a question I raised during departmental questions. I asked the Secretary of State about economic partnership agreements, which have been mentioned by others, and especially by the hon. Member for Ogmore. I asked for reassurance that ACP countries would be given a genuine choice between signing up to EPAs and pro-development alternatives. The Secretary of State answered:

That was said in the context of a letter of 11 April sent to the UK Government, in which the European Commission said that a statement made by the UK Government on 21 March

The letter goes on to list a number of concerns about the way in which the UK's interpretation of EPAs, and of giving ACP countries a genuine choice, is not reflected in the views of other European countries or in the agreement by the Council of Ministers. The letter says:

I would be grateful if the Minister would let us know what progress has been made in those negotiations with Peter Mandelson. One assumes that the Government speak the same language as the Trade Commissioner, both literally and politically, and so I hope that the Government can make progress in ensuring that less-developed, ACP countries genuinely have a choice.
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Also, I would welcome the Minister's clear interpretation of the revised line taken by the European Commission regarding EPAs and would like him to say whether the Government agree in principle that debt relief and aid should not be conditional on enforced trade policy. I am aware of the time, and of the fact that the Conservative spokesman and the Minister need to respond, so I shall end my remarks now.

3.38 pm

Mark Simmonds (Boston and Skegness) (Con): First, I should like to say how much I welcome this debate, which is timely. Secondly, I congratulate the hon. Member for Ogmore (Huw Irranca-Davies) on securing the debate and on the excellent way in which he introduced it. It certainly was not a weak and flabby introduction; his remarks were strong and taut. I share many of his concerns, particularly those relating to the difficulties faced by developing countries as a result of agricultural subsidies, particularly those to do with dumping and western protectionism.

The Conservative party is supportive of the broad aims and objectives of the Make Poverty History campaign and the fair trade movement. They have certainly made a very important contribution to placing these issues right at the top of the political agenda. It is important to present a united British front to tackling the problems of Africa. We are supportive of the aims and objectives of the millennium development goals and we are committed to British development work overseas.

It is important to state that increasing aid budgets alone is not sufficient: Africa needs trade. To maximise the benefits of trade, international trade needs to be both freer and fairer. We understand that this cannot happen immediately, but we are committed to working towards genuinely free and fairer trade by supporting developing countries and less-developed economies through the transition period.

It is clear that international trade has lifted millions of people out of poverty, particularly in China and south-east Asia. Tragically, however, sub-Saharan Africa has not only been left behind, but its share of global trade has declined from 6 per cent. to just 2 per cent. in the past 20 years, despite significant levels of aid, particularly in recent years.

The economic benefits resulting from greater openness and freer trade are immense. Countries across the globe have benefited through trading, which has led to faster growth rates, cheaper imports, new technologies and stronger political ties, as well as increased security. Protection for developed countries at the expense of the developing world must come to an end. For every pound in aid that rich countries give to poor countries, the poor countries lose £2 through protectionist barriers. It is clear that opportunities for international development are being restricted by western protectionist policies. As the World Bank has said:

This is a critical time for the UK to play a role, particularly as it takes over the presidencies of the G8 and the European Union. The Government have a duty
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to use their influence to promote freer and fairer trade in the developing world. The EU and US should allow poor countries tariff-free access to our markets for raw materials and added-value products, thereby ending tariff escalation.

The global marketplace is a highly uneven playing field. The following example has been used before by other hon. Members. The ACP cotton producers have liberalised and removed their subsidies and could easily compete with US cotton producers, but the protectionist policies exercised by the US mean that the ACP farmers are not competing with US farmers, but with the US Treasury. That is not acceptable. Burkina Faso, Mali, Benin and Chad have all suffered. This is neither free trade, nor fair trade and it is preventing many African countries from successfully developing and exporting good quality, efficiently produced products.

We all accept that the international trading agreements are immensely complex. As the hon. Member for Twickenham rightly said, it is essential that we have an international framework. However, there is concern regarding a number of aspects of the trading agreements. Economic partnership agreements have already been mentioned and there are issues with the current EPA negotiations. First, there is a lack of scrutiny over the negotiation. Secondly, the ACP groups will be moving from non-reciprocal preferential access to reciprocal trading agreements. Thirdly, in direct contrast to the WTO Doha development round, no commitment has been made on the consideration of an ACP country's development status. If the Minister has time, I would welcome his stating the Government's position on those three issues.

There are also concerns regarding the "Everything but Arms" agreements. The Minister will be aware that the utilisation of those agreements among least-developed countries has been very small—only 3 per cent.—the main reason being that many countries prefer the Cotonou agreement, because the EBA is non-contractual and offers less stability. Unfortunately, the stringent rules of origin within the EBA arrangements have deterred the ACP countries, as they are prevented from sourcing products from other ACP countries. I support the argument that the rules of origin have been set excessively tightly and should be relaxed to allow poorer countries to gain maximum benefit. It is also debateable whether the EBA agreement should require LDCs to provide reciprocal market access to the EU prior to graduation from LDC status.

Other hon. Members have rightly mentioned the common agricultural policy, which has encouraged over-production until recently, and continues to do so, distorts prices, imposes high tariffs on imports and subsidises exports. Over the past five years, EU export subsidies have amounted to a staggering £20 billion. Further reform of the CAP is essential. It has been estimated that food and farming in developing countries would increase by $7.5 billion per year, making a significant contribution to alleviating poverty, particularly in Africa. There is an argument that ACP countries should not have to open their markets to EU agricultural products until all the EU's trade-distorting subsidies have been removed. There must be a transition period before full reciprocity occurs in the agricultural sector and that should be linked to CAP reform.
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Export dumping, as the hon. Member for Ogmore said, is one of the most damaging of all current distortions in world trade practices. Developing countries' agricultural sectors, which are vital for food security, rural livelihoods, poverty reduction and trade, are being crippled by the practice of major commodities being sold at well below the cost of production prices in world markets. EU consumers and taxpayers are forced to finance policies that damage developing countries. Oxfam recently calculated that EU wheat is exported at prices that are 34 per cent. below the cost of production. The price of skimmed milk powder is 50 per cent. and that of sugar 25 per cent. below the cost of production. I hope that the Minister will agree that the continuation of such trade policies is completely unacceptable. Would he outline the Government's position towards export dumping and tell us what steps the UK is taking to work with EU partners and the US to end that practice?

The Conservative party supports much of what the trade justice lobby has done in bringing fair trade to the top of the political agenda. Protectionist measures that shelter some EU and US farming products are not free and fair trade. The trade justice lobby believes that fair trade requires some protectionism on behalf of developing countries. However, as the hon. Member for Twickenham rightly pointed out, high levels of infant industry protection, including total bans on competing imports, particularly in the absence of offsetting incentives to exports, are extremely inefficient. That has been tried before. In the 1950s and 1960s in Latin America, local industries were protected behind tariff walls in a bid to make them more competitive. Unfortunately, they remained uncompetitive infant industries. The ruling elite merely raked off monopoly profits. The hon. Gentleman rightly mentioned India, which had high protectionist barriers. When the tariff barriers were removed, the Taiwanese, in particular, destroyed much of the heavy industry, especially the steel industry, that was protected in India.

The newly industrialised countries of Asia have tried a much more export-orientated approach that exploited foreign investment to boost local capacity and to compete internationally. The result is two decades of growth that have lifted many millions of people out of poverty. However, we must be aware that as countries move towards freer trade, they will not be able to make the transition overnight. It is our duty to support such countries during the transition period.

There are also serious concerns about the pace of liberalisation, particularly as it affects the fiscal situation of developing countries. If the ACP countries reduced or were forced to reduce their tariffs too fast, there would be significant problems for their revenues. The World Bank has estimated that the EU's tariff-free access to their markets will incur losses amounting to 1 per cent. of GDP and 10 per cent. of the Government revenue for sub-Saharan African countries. This must be closely monitored.

We must also recognise that much of the poverty across Africa is a result of economic mismanagement, misrule, corruption and the misguided ideology of certain African rulers. The failure of many African countries to establish good governance, the rule of law
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and economic stability has clearly contributed to poverty and suffering. To arrest that trend and lift populations out of poverty, African Governments must create the conditions in which a market economy can develop and thrive: the rule of law, stable Governments and the establishment of private property rights.

In conclusion, the level of poverty around the world    is unacceptable. Nearly half the world's population live on less than a dollar a day. One billion people do not have access to clean water; 100 million children do not go to school and 40 million are suffering from HIV/AIDS. We have a moral duty to take action. Trade, both free and fair, is the best means of alleviating poverty in a sustainable way in the developing world.

3.48 pm

The Parliamentary Under-Secretary of State for International Development (Mr. Gareth Thomas) : I join others in congratulating my hon. Friend the Member for Ogmore (Huw Irranca-Davies) on the quality of the case he made. At the risk of upsetting other hon. Members, I suspect that only a true Welshman could have managed such lyricism, passion and fluency. I agree with the first point that he made very strongly: as a Government we warmly welcome the Make Poverty History campaign, the Live 8 concerts and the campaigning of Bob Geldof and others. It is helpful to have so many groups and individuals campaigning hard not just in Britain but across Europe and the rest of the developed world.

As my hon. Friend and others rightly said, we recognise that there is a huge opportunity for the developed world to do something for Africa and to make a real difference this year. Britain has a particular responsibility as we will host the G8 summit and hold the presidency of the European Union. There is a real opportunity this year, not only because of the G8 summit, with Africa as one of its centrepiece agenda items, but because there will be a five-year review of the millennium development goals at the UN summit in September, and because the World Trade Organisation talks are taking place in December. The Government have made it clear that, for 2005, we want to prioritise Africa and to see more progress on aid, debt and trade.

I also welcome the contributions made by the hon. Member for Twickenham (Dr. Cable), who in this debate is lurking on the Back Benches. I agree broadly with the thrust of what he said. The World Trade Organisation is an absolutely critical body, democratic in its structures. He was right to make the points that a rule-based trading system is crucial in protecting the interests of developing countries and that we must continue to work to support and develop its effectiveness.

If I had one slight quibble with the hon. Gentleman's broad analysis, it was on the issue of food security, where I believe that there is a case for protection of some products, although the question is: what products? I flag up to him and to other hon. Members that we are working with ActionAid and the Food and Agriculture Organisation to try to identify what products should be given that special product status.

I also welcome the contribution made by my hon. Friend the Member for Glasgow, North (Ann McKechin), and I take this opportunity to pay tribute to
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her campaigning work on debt relief, particularly during the last Parliament. I hope that a series of objectives in respect of debt relief will soon be achieved, including the 100 per cent. write-off of the poorest nations' debts to the World Bank and the African Development Bank. As she knows, my right hon. Friend the Prime Minister is engaged in talking about that issue and also about aid.

That brings me to the point about the US made by my hon. Friend the Member for Ogmore and by other hon. Members. We will continue to have very active discussions with the Americans across a whole range of development issues between now and the end of 2005. It is crucial to get their agreement and support for development across that range of issues—not just on debt relief, which is attracting so much attention this week, but on aid. The announcement that President Bush made yesterday is welcome, but there is a series of other things that we want the US to make progress on, particularly on trade, and we will continue to talk to them in the run-up to Hong Kong.

I agree with the fundamental point made by all hon. Members that despite rapid globalisation and growth in trade over the past decade, Africa's share of world trade has more than halved. We should not continue to accept that situation. Oxfam estimates that a 1 per cent. increase in Africa's share of world trade would be worth five times as much as the continent's current share of aid and debt relief. There is therefore a huge prize to be won for those of us interested in development and helping Africa and in making progress in the current round of trade talks.

Although few would disagree that trade is an important engine for growth, we must also recognise that for that engine to push full steam ahead, there are a series of other obstacles, in addition to unfair trading rules, on which we need to try to make progress. That is related to the point about aid for trade made by my hon. Friend the Member for Ogmore. The series of other obstacles that we need to work on may concern infrastructure—to which, I believe, the hon. Member for Twickenham alluded—or developing the capacity of Ministries of Trade, or access to capital for businesses to develop. Indeed, we are in discussions with our G8 partners and with the other international financial institutions on aid-for-trade support. Trade and development are global issues; they require a global response. The UK and the EU on their own can make a difference, but they are not the sole solution to the situation in which we find ourselves.

It is clear that the failure of the Cancun talks remains in the back of everyone's mind. None of us want a repeat in Hong Kong of what happened in Cancun. As my hon. Friend the Member for Glasgow, North rightly made clear, several positive things emerged from Cancun, not least the clarity of the developing nations' voice in the process. The agreement on the trade-related aspects of intellectual property rights is also welcome.

Like my hon. Friend and other hon. Members, the Government also welcome the breakthrough last year on the terms of the July framework agreement, which paved the way for negotiations to continue. As she said, there is a long way to go before the aims of the Doha development round are realised, but we expect by the end of July to have the first draft of the package of
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measures for discussion at Hong Kong. Again, that is part of the process to build up the momentum that will be necessary if we are to achieve an effective and ambitious agreement.

Undoubtedly, agriculture is central to the trade talks and to securing a good outcome from the Doha development round. We are addressing the grave distortions in agricultural markets that prevent developing countries from trading their way out of poverty. The hon. Member for Boston and Skegness (Mark Simmonds) referred to cotton. In Benin, cotton accounts for some 85 per cent. of total exports and 20 per cent. of the national income, but its producers, who are very poor, must compete with heavily subsidised EU and US producers. Bearing in mind that, in 2001, the US gave more in assistance to its cotton farmers—$4 billion—than the entire gross domestic product of Benin, one gets some sense of just how unfairly the WTO rules are stacked against developing nations.

The EU has committed itself to abolishing all its export subsidies. We need to agree an end-date with the Americans and other developed countries during the WTO negotiations. The hon. Member for Boston and Skegness and others asked how the Government were taking forward such negotiations. We are pressing in the discussions for the end-date to be 2010, as we made clear in our manifesto. We have not changed our position on that, and we continue to have discussions on that basis.

Let me deal with economic partnership agreements and try to reassure my hon. Friend the Member for Glasgow, North and other hon. Members that our position on them has not changed. The letter that the hon. Member for St. Ives (Andrew George) referred to was from a particular EU official, albeit a senior official. I do not agree with his attempt to assess our motives in the position paper that we drew up in March. We are having a series of discussions with other EU nations to try to secure their support for the position that we have advocated. In talks that my right hon. Friend the Secretary of State and I have had with partners in Europe, we have pressed the case for our position on EPAs, and we will continue to do so. Indeed, at the end of this month, I shall be meeting counterparts at an ACP-EU ministerial meeting, and I hope to hear from them at first hand how negotiations are proceeding.

On the point of the hon. Member for St. Ives about alternatives to EPAs, the Government have funded some research on what alternatives might look like, and have made it available to those who are taking part in the negotiations so that they have the information to hand. The ACP negotiators whom I have met have indicated that they want the discussions around EPAs to continue at present—they are still very much in the early stages—but we shall keep in touch with them should they want further discussions with us about alternatives to EPAs.

The Government made very clear their views on forced liberalisation. We do not believe that policy choices should be forced on developing countries through aid and debt relief. We shall try to increase the transparency of our arrangements by publishing the conditions that we attach. I hope that that answers most of the points made by hon. Members.
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