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Mr. Alan Duncan (Rutland and Melton) (Con): I thank the Secretary of State for giving me a copy of his statement in advance. It is four years since we last faced each other across the Dispatch Box as deputies in our trade and industry teams, and I am happy to resume our friendly battle of the Alans.
To be successful, the WTO talks in Hong Kong needed to advance the cause of free and fair trade. Agreement was needed to reduce global tariffs, to give poorer countries more open access to our markets, and to remove trade-distorting subsidies, especially for EU exports. It is in everyone's interest that that should happen, and we risk failing in our obligations to the developing world if it does not do so. The outcome of the talks has been cloaked in the language of disappointment and failure. Looking back at them, they were not as good as we had hoped, but they were not all bad. In fact, we should give credit to many people who have striven to make progress in what, inevitably, is a laborious and cumbersome undertaking. In addition to the attendees listed by the Secretary of State, my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell) has just returned from the talks.
There were some undeniable achievements, such as the accession to the WTO of Saudi Arabia and Tonga, and the very fact that, unlike Cancun, the talks reached agreement and did not totally break down. The decisions that were made, however, were not quite as certain as the repeal of the corn laws. Was it not a pity that the Hong Kong talks were under way at the same time as the budget negotiations in Brussels, given that the EU position on CAP reform was a crucial ingredient for success in Hong Kong? The Secretary of State, indeed, has just called it the "motor of the round". Was it therefore not ill-advised to hold Hong Kong concurrently with Brussels? With sensible planning, it would have been better to hold Brussels followed by Hong Kong, so that a pre-determined EU position could have played constructively into progress in Hong Kong. If we had used our agenda-setting powers under our EU presidency, and the talks had been consecutive, might we not have had some prospect of securing the removal of EU subsidies by 2010, instead of 2013, as
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eventually agreed? Does he not recall that Labour's election manifesto intended to meet a 2010 deadline? Far from Europe making that happen, as has been claimed for Hong Kong, anyone can see that Europe stopped it happening better, and must shoulder much of the blame for the Hong Kong talks not achieving more.
Any sensible person will welcome the fact that 97 per cent. of product lines in developing countries will have free access to European markets, but how was that figure reached and calculated? Of course, 97 per cent. feels tantalisingly close to the full Monty, but can the Secretary of State tell us exactly what makes up the 3 per cent. that is omitted? He has just said that the 3 per cent. might contain many of the goods that developing countries most want to trade. Might it not in fact cover items such as textiles and so on, thereby penalising developing countries quite severely? While one accepts that progress in the agricultural sector was stymied by everything that was going on, or perhaps not going on, in Brussels, surely there was no excuse for failing to make progress in the service sector? What agenda will the Secretary of State now outline for future progress in liberalising the international market in services?
On aid for trade, how much new money has been pledged by the EU as a whole, and how much by the UK itself over and above the commitments outlined in the pre-Budget report a fortnight ago? We are told that world trade talks are like a sausage. It is sensible not to look too closely at how they are madeit is what we end up with that matters. The great expectations expressed by the Government before our May elections have not exactly been delivered. Things have inched forward, but at least they have moved in the right direction.
Where do we go next? If the USA is to participate fully in the next stage, the modalities must be agreed next year to allow them to come into effect by mid-2007. What plans does the Secretary of State have to renew momentum in order to get the details hammered out as quickly as possible to convert what is only an outline agreement from Hong Kong into a fully implemented scheme? Will he reconfirm his confidence in the WTO as the best global vehicle for advancing the cause of free and fair trade?
We should all be grateful for the progress that has been made, and we should not be churlish about it being less than we might have hoped for. We are but one of 150 countries, and global agreements are never easy. We must see that what was agreed in Hong Kong is fully implemented, that the WTO continues to work with the constructive participation of all its members and that momentum is not lost. We must all continue to strive for a global economic model that increases prosperity, tackles poverty and builds harmony and co-operation between the nations of the world.
Alan Johnson: I welcome the hon. Member for Rutland and Melton (Mr. Duncan) to his new position. It is a great pleasure to be reunited with him after four miserable years apart.[Laughter.] Perhaps I should say four disappointing years apart.
I mentioned the hon. Members who were in Hong Kong as part of the official delegation, and the hon. Members for Sutton Coldfield (Mr. Mitchell) and for Buckingham (John Bercow), in addition to other hon. Members, were also present in various capacities. There was huge interest in the Hong Kong conference.
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On the timing of the discussions, the hon. Member for Rutland and Melton asked whether the outcome would have been different if we had managed to choreograph the Brussels conference before the Hong Kong conference. I do not think that that was possiblethe date for the Hong Kong conference was set in stone, because it is not easy to rearrange accommodation for 6,000 delegates.
On the budget discussions in Brussels, it is almost par for the course that presidencies do not start moving until they approach their end. I do not know whether the conferences could have been choreographed differently, but I am sure that that would not have made any difference to the outcome.
The huge reluctance of member states, including France, to agree the end of export subsidies was about protecting the CAP, and I ask hon. Members to recognise that the big issue in relation to those talks and the CAP has not been tackled yet. Market access is the big issue, and it is responsible for 90 per cent. of the money made in terms of the three pillars in agriculture. To get a meaningful deal on not only agriculture but industryservices are a slightly different matternext year's discussion will be very interesting, because given the mandate of the negotiators, Commissioners Mandelson and Fischer Boel, it will be very difficult to achieve a meaningful outcome to the talks without interfering with the CAP, which is where the galvanising effect of Hong Kong is significant. Watch this space and see what happens early next year.
I agree with the hon. Gentleman about tariff-free and quota-free access for the least developed countries. I cannot say exactly what tariff lines are included in the outcome, because the argument concerned the percentageonce one has agreed the percentage, one then decides the tariff lines. The US would not accept anything higher than 95 per cent., but the developing countries wanted 99.8 per cent. immediately, with the other bit being closed over a period of time. A compromise was reached at 97 per cent., which is why all 150 member states signed up to the statement and why the developing countries were in the end happy to make progress. However, it is important to close the other 3 per cent., because, as I have said, that 3 per cent. is likely to include the very tariff lines from which poorer countries can benefit by exporting into developed markets. However, the issue concerns not only the United States, but Japan and a few others.
On aid for trade, the UK will provide new money. We think that the EU will provide new money, but there is a process to make sure that the commitment is genuine. Many questions were asked about the substance of Japan's offer, and a process is taking place to make sure that that contribution is genuine.
How do we go forward, given that, to use the hon. Gentleman's comparison, the WTO is rather like a sausageBismarck once remarked that laws are like sausages? The process is difficult and tortuous, but the timeline set out in the statement agreed on Sunday night is that the modalitiesin other words, the formulaewill be in place by April 2006. By July 2006, we will have completed the schedulesthe items to which the formulae will be applied. Given the American fast-track system, which involves the US Trade Promotion Authority, America can put the package before Congress and the Senate on a take-it-or-leave-it basis
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until summer 2007. After that date, the process will become tortuous, which could mean that the US finds it difficult to deliver on an ambitious deal. The momentum exists to get the process moving satisfactorily: the director general of the WTO and the European Commission are key players, but heads of state probably have a role to play in galvanising the discussions.
Finally, I confirm our absolute confidence in the WTO. If we were to move from multilateral discussions and agreements back to bilateral agreements, the poor would be the losers. Although some voices, some of which belong to professional sceptics, say that no deal would be a cause for celebration, I think that no deal would bring into question the future of multilateral negotiations, which would be bad for developed countries and worse for developing countries.
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