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House of Commons

Wednesday 25 January 2006

The House met at half-past Eleven o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Protectionist Trade Policies

1. Mr. Stephen Crabb (Preseli Pembrokeshire) (Con): What assessment he has made of the impact of protectionist trade policies on poor countries; and if he will make a statement. [45074]

The Parliamentary Under-Secretary of State for International Development (Mr. Gareth Thomas): Current protectionist policies from OECD countries prevent developing countries from accessing our markets and trading their way out of poverty. If, for example, subsidies to US and EU cotton farmers were removed, it has been estimated that cotton exports from some of the poorest countries in sub-Saharan Africa could increase by up to 75 per cent. There was some progress made in Hong Kong, but more progress is needed to secure a truly pro-development outcome to the Doha development round. We are working to that end.

Mr. Crabb: Last September, the Prime Minister warned that failure at the World Trade Organisation ministerial meeting in December would echo right round the world. Given the disappointing outcome in Hong Kong, what can the Minister say to persuade the House and observers round the globe that the WTO is not a dysfunctional organisation in which the interests of the poorest people on the planet are betrayed time and time again?

Mr. Thomas: The hon. Gentleman's fundamental point that Hong Kong was disappointing is absolutely true. There was some progress on export subsidies, for example, and on special and deferential treatment. In the run-up to Hong Kong, there was some progress on allocating more resources to help countries boost their trading capacity. However, we will need to see more movement from all sides in the negotiations if, as I indicated, we are to be able to achieve the pro-development outcome from the Doha development round that I think we all want to see.

Kali Mountford (Colne Valley) (Lab): My hon. Friend will be aware that there are people meeting today to
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think outside the box. They will be meeting alongside people like Bono and Michael Douglas. If countries really are to be able to trade their way out of poverty, particularly those countries who need trade the most, is it not important that they too are brought inside the box for these discussions?

Mr. Thomas: I want to congratulate those who are thinking outside the box about trade and negotiations. The Government, as part of our contribution to help progress in the current round of talks and more generally, published in December our long-term vision of the future of the common agricultural policy, setting out our vision of a European agricultural industry that does not distort international trade. We published that document as an out-of-the-box opportunity for discussion in Europe and more generally. I hope that those who are taking part in the discussions in Davos, to which my hon. Friend alludes, will talk to all European states if they come up with useful ideas.

Mr. William Cash (Stone) (Con): Does the Minister accept that unless the Government address the problems that arise from the EU in the context of protectionism, there is no point in talking about whether we will be in the box or out of the box. The questions are perfectly clear. There is a determination in certain countries in Europe for protectionist policies to remain. Should not the Government ensure that they get the message across to those countries and do something about the matter?

Mr. Thomas: I recognise that the hon. Gentleman has a distinctive view on all things European. However, he is a little out of date on the CAP. I am sure that he would want to congratulate again my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs for the progress that we have made already on reform of the CAP, in 2003 and 2004. However, I welcome the hon. Gentleman's continuing encouragement for us to make more progress on the CAP. That is, indeed, what the Government are seeking to achieve.

Anne Snelgrove (South Swindon) (Lab): The Minister has identified some of the successes at the Hong Kong talks. Will he tell us what we are going to do as a country to support the World Trade Organisation's cotton initiative?

Mr. Thomas: My hon. Friend is right. We have continued to provide support to a range of developing countries to help them be in a better position to negotiate at the WTO talks. We strongly support the proposal to fast-track cotton in the agricultural negotiations, including providing support, for example, to the chair of the least developed countries group, Minister Patel from Zambia, who warmly appreciated our support and the way in which it had enabled him to make his proposals to our American friends.

John Bercow (Buckingham) (Con): Given that the agreement on duty-free and quota-free access will still allow the United States to stop exports of textiles from Bangladesh and will allow Japan to resist exports of rice from Cambodia, would it not be accurate to say that the
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attitude of the United States and Japan to those developing countries is really, "You can export to us anything that you like as long as it is not competitive"?

Mr. Thomas: As I indicated in my reply to the original supplementary, all sides will have to give further ground if the talks are to be successful. We welcome the fact that some 97 per cent. duty and quota-free access has been offered, but we want to see agreement that 100 per cent. duty and quota-free access should be granted to all products from least developed countries. We will continue to make that argument over the coming months.

Andrew Gwynne (Denton and Reddish) (Lab): Clearly, it is important that the views and opinions of developing countries are heard at the WTO and in other international forums. What are the Government doing to facilitate a stronger voice for developing countries?

Mr. Thomas: One of the positive signs from Hong Kong was the continuing strength of the developing country voice, which was first evident back at the Cancun talks in 2003. Since 1998 we have given some £180 million to developing countries to help them increase their ability to negotiate and to do the research that feeds into those negotiations, and we have said that we will continue to provide such support in the coming months and years.

Andrew George (St. Ives) (LD): Before the Prime Minister arrives and just between ourselves, would the Minister care to share his views on why the Hong Kong trade talks were such a failure in development terms? After all, the UK held the presidency of both the G8 and the EU, and the Prime Minister's favoured son led for Europe. Does the Minister accept that the talks were a failure for the UK, and what does he believe needs to be done to bring Trade Ministers back together in order to iron out the problems as quickly as possible?

Mr. Thomas: As the hon. Gentleman knows, there are more than 180 members of the World Trade Organisation. All can veto progress in those talks, so it is a highly complex process to make progress. As I said in previous answers, we saw signs of progress in those talks and we need to build on that. All sides will have to give ground—within the European Union, the United States and developing country blocs. We will use all the opportunities available to us, and I welcome the fact that Peter Mandelson is meeting a number of his interlocutors at the Davos forum this week. That can only help.

Mr. Lindsay Hoyle (Chorley) (Lab): My hon. Friend is aware that it is about fair trade, not free trade, for the poorest countries. Does he recognise that special help and support ought to be given to Caribbean and African countries whose cane sugar market is disappearing and whose economies will disappear as a result?

Mr. Thomas: My hon. Friend is right to say that we must continue to argue for fair trade, as well as opening up markets, and that we need to help countries work out for themselves what reforms they want to introduce and the pace at which they want to bring them in. On his
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specific point about sugar, I accept that a number of countries are affected by the sugar negotiations, which we welcome in general terms. Some transitional assistance has been agreed for 2006. As part of the more detailed discussions about the 2007–2013 European budget, we need to agree further transitional assistance for those sugar-producing countries, and we intend to do just that.

Mr. Andrew Mitchell (Sutton Coldfield) (Con): In view of the widespread disappointment at the failure of the WTO talks in Hong Kong and the widely shared perception that the European Union is, at the least, a   substantial roadblock to progress, what specific proposals is the Minister pressing the EU negotiators to put forward in Geneva? Does he agree that there is not much point in Commissioner Mandelson making dyspeptic speeches about the failure of others to perform at the WTO, when so much of the problem is clearly caused by EU intransigence?

Mr. Thomas: I would not characterise the Hong Kong talks as a failure. As I indicated, some progress was made—on export subsidies, for example, which we warmly welcome, and on special products and the special safeguard mechanism, which is important for developing countries. In the run-up to the Hong Kong talks the European Union made a particularly helpful contribution on the commitment to provide some €2 billion for trade-related capacity building. Clearly, on agriculture and a range of negotiating briefs, the EU and all member blocs in the WTO will have to give further ground. We will continue to encourage both Commissioner Mandelson and individual member states to be seized of the urgency of that.

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