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8 Jun 2006 : Column 160WH—continued

3.23 pm

Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op): This is indeed an important debate on an important subject, particularly for developing countries. It is fair to say that if a network of economic partnership agreements is eventually established, it will be probably be more significant for relations between the EU and ACP countries than the original Lomé convention, which was drawn up some decades ago.

I agree with everything that has been said about the potential gain for developing countries, including the poorest, from an expansion of trade. There is no doubt that developing countries stand to make a particular gain from an expansion of trade, and such expansion will be important if we are to have any hope of reaching the millennium development goals. Free trade can be an immense opportunity for developing countries, but as has been mentioned, free trade also has to be fair trade, and the relationship must have beneficial, not negative, consequences for developing countries.

In some of the time available this afternoon, I want to put on record issues that, as I am sure that the Minister and the various Front-Bench spokesmen will be aware, have been raised by developing countries and
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non-governmental organisations concerned with these matters. I hope to get a response in those areas, and some expansion as to Government policy in them.

Let us not forget what is being asking for. Ultimately, we are asking producers in ACP countries to put themselves in direct competition with European competitors, who in many cases will have had decades of subsidies, support and protections from their Governments, in which they have been able to build up strong, competitive industries. We want ACP countries to be able to compete on fair terms with those producers, and it is important that the transition to that new trading relationship benefits the ACP countries. We are all aware of the danger that, if we simply open up markets in developing countries, products from Europe will flood those markets, and even existing industries and producers in ACP countries will lose out; it will be a question not of benefit to those developing countries, but of actually setting the relationship back.

The issues about which many developing countries and NGOs are concerned have been made well known to Members of the House, so I shall not set them out in great detail, but will describe them in headline terms. There is concern in some quarters that even the loss of tariff income could be important for some ACP countries, because it would have an effect on their Governments’ expenditure on social provision, particularly health and education. There is a concern that once ACP countries have entered into economic partnership agreements, their ability to change their own trade and development strategies in future to take account of changing circumstances will be limited.

Above all, I have already referred to the concern that ACP countries could find themselves unable to protect their domestic producers and infant industries from EU imports—not just imports without any EU subsidy or assistance, but imports that are actually subsidised in various ways, whether indirectly or directly, by EU countries. The consequences for infant industries and domestic producers in ACP countries could be severe.

Concerns have been expressed about what can be described as the premature lowering of import tariffs in Ghana and Senegal on products such as tomato paste, chicken parts and meat. It is suggested that there was a subsequent flood of cheap European products undercutting locally produced goods, causing factories that added value to local produce to close, and causing hardship in poor rural communities where livelihoods depended on the sale of surplus food.

Concern has already been raised about the Singapore issues. I certainly welcome the Government’s clear statement that they will not take an approach that insists on the Singapore issues as part of negotiations, but I am sure that the Minister will appreciate that it is one thing to make that statement at European Council meetings, and another for it to be immediately put into effect. When a series of detailed negotiations is taking place, the Singapore issues can be pressed much more strongly than the Government would wish, through the back door.

Concerns about the capacity and ability of some trade negotiators, including regional secretariats and ACP trade negotiators, to engage in equal negotiations
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with the EU have already been mentioned. I know that the Government and the EU have given some support to try to level the playing field for those negotiations, but more needs to be done. It would be interesting to hear today what steps the Minister thinks can be taken to secure a level playing field in the negotiations not only for the EPAs but for the World Trade Organisation, and to hear how some levelling of the playing field can be achieved by providing resources to the negotiators from the ACP fund.

It has already been suggested from across the Floor that one of the issues is who leads for the EU in negotiations. The suggestion has certainly been made by some in the development lobby that the development wing in the EU institutions—to put it in those terms—does not have the same input as those concerned with trade policy. Those are important concerns, which mean a substantial review is required of the approach taken to the EPA to date. That is why I welcome what the Minister has said regarding the review of the EPA negotiation process and it would be interesting to hear—either today or later—about the terms that the Government think the review must comprehend to ensure that it is not just a “light” review, as the European Commission originally described it. We want to know a bit more about how extensive that review process can be.

It is a difficulty in all negotiations about the EU’s relationships with ACP countries and the developing world more generally that there is a tendency for the Government or others in the EU to take a position about the direction in which they want to go, only for it to change somewhat when it comes to detailed negotiations. We then have to wait for an intervention by the Secretary of State or someone else to get the negotiations back on course. I am interested to hear how the Minister envisages the development of the review process. Will he reassure us that as far as possible, the Government, along with our European partners, will keep a grip on the review process?

I shall make my final point briefly because some of my original points have already been made. I would like to know how we can meet the objective of the Cotonou process to ensure that the development of the new relationship between the EU and the ACP countries involves not just Governments and institutions, but civil society and parliamentarians at all levels—particularly those in the developing countries, but those in the EU as well. That is an area where some progress still has to be made.

Britain is perhaps an exception as far as the involvement of civil society in debates on this issue are concerned. Like the hon. Member for Taunton (Mr. Browne) and most other hon. Members, I know that the public’s interest in these issues is deep, wide ranging and considerable, and it forms one of the largest single elements of the correspondence and contact I have with constituents. That is not the case in all EU countries, and an important task must therefore be undertaken to ensure that these discussions and negotiations involve wider civil society.

I shall make one further point, if I may, given that there is a bit of time available, about the process that we take part in during such debates, and the involvement of wider civil society in the terms to which I referred. I am not sure at whom my comments should
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be directed—the Government or even the Chairmen’s Panel—but I note that our position in discussing this Select Committee report is not untypical. The report began in the Select Committee in November 2004 and reached the end of the Committee process in March 2005. The Government responded quickly in June 2005, but for all sorts of reasons, we have finally got round to debating it in the House in June 2006.

As it happens, that may have caused a problem—not a substantial one, because, fortuitously, there is already a debate on the issues. I have raised concerns elsewhere about the way in which we ought properly to discuss such matters. I will not press the point further, but if we are talking about involving parliamentarians in the wider process, as well as Government, it may well be salutary for us, as parliamentarians, to consider that.

3.34 pm

Mr. Thomas: With the leave of the House, I shall try to answer some of the questions and points raised during the debate. I hope both Opposition spokesmen will forgive me if I start with the contribution of my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz), because he articulated a number of the underlying fears of many of our constituents—particularly in the NGO community—about how EPAs might turn out in practice. I hope to mention one or two things that will address the perhaps understandable scepticism about the direction of travel of EPA negotiations.

One of the reasons why the Government sought this debate—I am grateful to Mr. Speaker for allowing it to take place—is to allow the House to understand and discuss the way in which negotiations have developed since our position paper was published in March last year. Given that the Doha round of negotiations has understandably taken considerable precedence in media, NGO and Government activity, we wanted to use the debate to set out the considerable amount of work that has been going on, often behind the scenes, to ensure that the EPA negotiations genuinely deliver the development outcome that we think they can.

I shall give some additional reassurance on Singapore issues. I have made clear our position up front. We sought to persuade the vast majority of EU member states and the Commission that forcing the discussion of Singapore issues would not be possible, and would not be desirable in any case. I believe that we have been successful in that. Our officials who tracked the negotiations across Government—whether in the Department for International Development, the Foreign and Commonwealth Office or the Department of Trade and Industry—and the Ministers with responsibilities for the negotiations in those Departments, are monitoring whether there has been any attempt to force discussion of Singapore issues by a back-door mechanism. If there were, we would oppose it. Our position, which I believe has prevailed, is that it is genuinely for the negotiating teams of the six blocs to decide which, if any, of the Singapore issues they want to be discussed. As I say, trade facilitation is being discussed in all groups at their request, and the Caribbean and the Pacific groups want to discuss investment, too.

My hon. Friend the Member for Edinburgh, North and Leith is right to say that there was a genuine
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concern that some wanted just a light-touch review of how negotiations have gone, as I outlined earlier. We made it clear that we wanted a much fuller review of the negotiations, and the EU Council conclusions from 10 April have made it clear that it wants a much fuller review. Our position led to that genuine success and I welcome the support that we have had throughout all member states.

Regarding how the review might progress, it is for ACP regional blocs, member states and the Commission to feed in their assessments of it. One of the things we discussed with at least one regional negotiating bloc country, which might help in the review process, is the carrying out of independent work in each of the different regional areas—if the negotiating blocs want it—to feed into the review so that no one can say that it is simply a further negotiating position by the regional bloc or the EU. It will be genuinely independent. If the regional negotiating teams want that, we are willing to consider supporting such a process.

I hope that that provides further reassurance about the seriousness of our intent in relation to the importance of the review. It is a cross-Government position, so my right hon. Friends the Minister for Trade and the Secretary of State for Trade and Industry, as well as Ministers in the Foreign and Commonwealth Office, are also engaged in watching how the negotiations proceed.

I come to the usual battery of questions from the hon. Member for Boston and Skegness (Mark Simmonds). His first concerned how—and, indeed, whether—arbitration of disputes would be needed. Let me be clear that, to date, there are no such apparently intractable differences of opinion between the EU and the ACP. If there were, we would think that the best way to resolve them would be through independent negotiation, perhaps facilitated by an independent arbitrator. I bring the hon. Gentleman back to the review that will take place this year, which will again provide an opportunity to see how matters are moving forward. I hope to continue to build consensus around the direction so that there will be no need to resolve such disputes.

The hon. Gentleman also asked about the relationship between sustainable impact assessments and economic partnership agreements. He may be aware that the need for sustainable impact assessments is specifically mentioned in the Council conclusions to which I have referred. Some such assessments have been conducted. Those that were done for the ACP are confidential to the ACP grouping, and neither we nor the Commission have seen their results. They are clearly designed to inform the negotiating position of the ACP grouping. Some have been done for member states and the Commission, which we have seen but which, frankly, were not terribly informative. We are trying to work with the Commission to come up with a more effective methodology for further such assessments for precisely the reasons outlined by the hon. Gentleman, so that we can properly understand what certain negotiating positions and agreements might mean.

The hon. Gentleman also asked how we will ensure that the benefits of the extra trade that EPAs might deliver will be spread down to the very poorest.
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Obviously, in the context of the specific EPA negotiations, it is difficult to put in particular benchmarks. That is where the wider context of development discussions with each developing country becomes important and where work on national development plans and poverty reduction strategies becomes crucial. That wider development dialogue seeks, in effect, to extend the benefits of growth to the very poorest in developing countries. That is where we can make sure that the benefits of trade and economic growth are spread to those who most need them.

The hon. Gentleman also asked about monitoring mechanisms and whether they will be independent. A key outcome that we secured in the Council conclusions was the recognition that further work needs to be done on the design of the monitoring mechanism, with not only the European Commission but ACP Governments and stakeholders, for that very purpose. We expect that to be ready by the time that any EPA comes to be negotiated. Obviously, I will continue to keep hon. Members up to date on the ongoing discussions on EPAs.

The hon. Gentleman asked how negotiations might be speeded up, for want of a better phrase, and how they linked to the Doha development round. He is right to say that the Doha round negotiations are an important backdrop to the EPA negotiations and will have a considerable impact on them, not least in the context of the discussions on special and differential treatment, which are very important in relation to whether particular problems will develop from the food security issues that have been the concern of some in the NGO community and some in-country capitals. The current discussions on that in the Doha round will be particularly important in the EPAs dimension.

The hon. Gentleman’s broad point was about how we can speed up the process. That is one reason why it is crucial to have an extensive and full review of EPAs this year and not just a light-touch review. We need to consider what further progress is needed and what member states and the Commission can do to support the negotiations more effectively, so that, if possible, we get them to a stage at which they are ready for implementation by the time the WTO waiver comes to an end.

The hon. Gentleman is rightly worried about the overload on the negotiators in each of the various developing countries. The hon. Member for Taunton (Mr. Browne) also raised that issue, and they are right to raise that concern. The pressure on a number of key Ministers and key officials in developing countries is considerable, not least because of their importance to the Doha round, EPAs, internal trade discussions, and bilateral trade agreements that might be being negotiated within each region or with key developed countries. We have sought to ease that capacity dimension through our trade-related capacity building support. We have given £1.6 million to support the Caribbean regional negotiating machinery in that process. We have also given £8.9 million to the southern and eastern Africa regional trade facilitation programmes, and various other financial supports to the other negotiating blocs, precisely to try to help with
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some of the capacity constraints that hon. Members and people in the NGO world have understandably drawn to our attention.

The hon. Member for Boston and Skegness also asked whether I still think that the Doha round will be a success, and mentioned a speech made by Commissioner Mandelson. There is no doubt that we are getting close to the wire with the Doha round. It is clear that all the key blocs in the negotiations know that there is potentially a huge prize with a successful outcome to the Doha round, and that they recognise that all blocs will have to give further ground. Clearly, it is necessary to make some progress on the sequencing of revealing more details of the final position of each country or bloc, which needs to happen quickly. My right hon. Friends the Prime Minister, the Secretary of State for Trade and Industry, the Foreign Secretary, the Chancellor and other key Government members have all been involved in seeking to move those negotiations forward. Commissioner Mandelson has made it clear that he is still hopeful that there will be a successful outcome to the Doha round, and we continue to work for such a conclusion both within our discussions in Europe and, more broadly, on the international stage.

I do not believe that there is a conflict between the EPA negotiations and the Doha round negotiations, which is another concern that the hon. Gentleman raised. Multilateral negotiations are always better for individual developing countries, because developing countries coming together to negotiate their positions inevitably strengthens them against the big, regional negotiating blocs. Bilateral agreements offer potential for countries to be bullied, and can mean that the best possible outcome for those developing countries is not secured. Our position is very much that multilateral negotiations are the best way forward, which is why we continue to put as much political and official effort into trying to secure the Doha round outcome that we want.

All Members present asked about development assistance to support the implementation of EPAs. I suspect that we will continue to provide increasing development assistance to support the implementation of EPAs. It is difficult to say how much will be required until we see what the negotiations bring forth. As I indicated, we have been spending an increasing amount on building trade-related capacity to support negotiations across a variety of settings and on implementing the outcome of those negotiations.

We will provide money bilaterally, and money will also be made available through the European development fund. Hon. Members may know that the latest development fund negotiations—EDF 10—were successful, with a 15 per cent. real-terms increase in the size of the total. How those extra resources will be allocated has yet to be decided, but there is clearly a potential for further resources to be made available to implement the EPAs once they are finally negotiated.

The hon. Member for Taunton asked about the timing of any asymmetric liberalisation—how much time developing countries would need in order to decide the pace at which they wanted to open up their markets. Our policy to date—in a sense, it was alluded to in the Commission for Africa report—is that 20 years is the essential time frame, and that that time might be needed. It is possible that complete opening up by ACP countries cannot be envisaged. Inevitably,
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the length of time that it takes for markets to be opened up will vary in each ACP group, so that is an important part of the negotiations.

World Trade Organisation rules provide some flexibility. Part of our negotiating position in the current round of WTO talks is to press for further flexibility, but we know that there is likely to be resistance to that from developing countries that are not taking part in the EPA discussions, so we have to be realistic about the level of flexibility that might be available. The EU Council conclusions that we secured on 10 April reinforced the need for more flexibility and asymmetry in the final outcome—an important point to bring home to negotiators.

I hope that I have provided further reassurance to hon. Members about how the negotiations are going,
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about the way in which Departments across Government are following those negotiations and the seriousness with which we are taking those discussions, and about the fact that we are working to persuade other member states and the Commission of our position. We believe that EPAs have a huge potential for good. They will help to facilitate economic growth, which is crucial for tackling progress on the millennium development goals. However, it is by no means a done deal, which is why the review later this year will be so important. We will keep hon. Members and people outside the House up to date on our progress.

Question put and agreed to.

Adjourned accordingly at seven minutes to Four o'clock.

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