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12 Oct 2006 : Column 150WH—continued
2.55 pm
John Bercow (Buckingham) (Con): It is a pleasure and a privilege to take part in the debate, and I begin by paying tribute to the right hon. Member for Gordon (Malcolm Bruce), the Chairman of the Select Committee on International Development, for his work in bringing about the report, to which all members of the Committee have signed up.
I am sad to say that, on the strength of experience, I am inclined to agree with the verdict of the hon. Member for City of York (Hugh Bayley). I fear that his pessimism is all too justified, because we do not have to look into a crystal ball when we can read the book. That said, we have an overriding obligation to try to rescue the Doha development round, and the British Government have an important role to play in that process, in the hope that some sort of arrangement can be fashioned, the net effect of which will be to reduce the poverty of the poorest at the expense—let us be explicit—of some necessary and considerable sacrifice by the richest.
In the brief time available, I should like to focus on a couple of points. First, both because it is significant on its own and because it is emblematic of the wider problem with which we are wrestling, I shall talk about duty-free and quota-free access. There was a widespread hope and a partial commitment that 100 per cent. duty-free quota-free access would be provided for the least developed countries to export their produce and to reduce thereby their destitution.
In fact, we got something rather different. We got—principally on the ultimate insistence of the United States that it was thus far and no further—an agreement only to 97 per cent. The significance of that can hardly be overstated. It would be easy to be beguiled by the rhetoricians, the spin doctors and the press release merchants—of whom a plentiful supply was in evidence in Hong Kong in the delegations both of the United States and of the European Union—and to suppose that 97 per cent. was really quite good. I might be thought rather churlish to suggest that the cup was half empty rather than half full. In fact, the situation is worse than that. The cup is not just half empty; there is scarcely any water remaining in it.
Let me explain why I say that. If we think about the 3 per cent. that has been protected, we see that we are in practice talking about somewhat more than 300—probably nearer 330—product lines that are exempt from the duty-free quota-free access arrangement. Are they a purely incidental and arbitrarily chosen 330 lines? Is it a matter of happenstance whether or not a line is included in the agreement? No, that is not the case at all. Those that are excluded and fall within the 3 per cent. have deliberately been put into the exempt category to satisfy the selfish commercial interests of states that are much more powerful, principally the United States and the European Union—a collection of states—and, to a considerable degree, Japan.
Just reflect on the facts. Under the agreement, unless it is amended and improved, the United States will still be able to resist the export of textiles from Bangladesh, and Japan will be able to resist the export of rice from Cambodia. So far as Bangladesh is concerned—to pluck out one important example—about 20 to 25 product lines account for two thirds of its exports.
When one reflects on those limited but important statistics, one recognises just how desperately damaging it is that the agreement so far is for only 97 per cent. and not 100 per cent.
I have flayed the United States, and I make no apology for doing so, because it has taken a thoroughly selfish and irresponsible approach thus far to the negotiations, but let us not suppose for one moment that the European Union can or should be let off the hook. The Chairman of the Select Committee mentioned the EU’s original insistence on large numbers of sensitive products. I think that the figure has sharply fallen since then, but even now the European Union is positing a scenario in which a significant number of products shall be judged to be sensitive so far as it is concerned, and developing countries will therefore not have an opportunity to export them. That is wrong. If we are serious about trade reform, about a development deal, and particularly about a pro-poor outcome, which was the whole rationale behind this set of negotiations in the first instance, we must resolve to secure a far superior outcome to the unsatisfactory mish-mash that is currently on the table.
Secondly, I am disappointed that far too little attention was paid to the subject of special and differential treatment. I think that the Committee also felt that an opportunity was lost. When reflecting on this subject, we have to adjust our mindset to the context of the totality of the negotiations. In this day and age, in the light of industrial development around the world, it is a mistake to view the debate as consisting of a Manichean divide between the forces of good and darkness, or even between the forces of developed and developing countries. That is part of the debate, but it is a simplistic characterisation because there is a world of difference between the position of India, China, or, indeed, Brazil, and the circumstances faced by Bangladesh, Ethiopia, or, dare I say it, Benin, Burkina Faso, Mali and Chad. If we are to create equitable and sustainable deals that respect the different circumstances of developing countries, we in the international community must be prepared to roll up our sleeves and attend politically, but, more importantly, intellectually, to the different circumstances faced by a range of countries. On that basis, we can come to arrangements that on the whole favour the poorest and the poorer, rather than the richest or richer.
My third point is that although there is a desperate threat of insecurity, collapse into failed states, internal conflict, and the acquisition of small arms and unregulated circulation of such weaponry, which kills about 400,000 people around the world each year, there is also an ultimate threat of terrorism. I have made the point before, and I make no apology for repeating it, that if as a matter of calculated policy we exacerbate the plight of the poor and increase the gap between them and us, it is only a matter of time before a proportion of them decide to pursue another route to redressing the balance. They may do it voluntarily, or they may find themselves being used by others, but it will happen.
There is another danger, which is a less apocalyptic scenario than that which the hon. Member for City of York validly articulated, that we will make next to no progress in the pursuit of the millennium development goals. There is a danger, in the international development
debate, that we end up discussing these issues in a compartmentalised fashion. In the conduct of domestic politics, it is often said that we need joined-up government; the Government say that they are delivering it, and we sometimes claim that they are not, but there is a regular debate about it. We need a similar approach to the formulation of policy on international development.
It is no good the European Union, the United States, Japan and others patting themselves on the back and feeling some sense of vindication, and perhaps of collective altruism, that they are doling out substantial sums of taxpayers’ money, the better to assist the poorest countries in the world, if they pursue trade policies that go in precisely the opposite direction. The danger is even greater when trade massively exceeds aid in volume—as we frankly know it does. Realistically, it always will. If we continue to operate in that way, we will be giving $1 with one hand and taking probably nearer to $6 with the other. I think that those are the denominations in which the debates should be conducted. There is a hugely greater sum involved with agricultural turnover than with the contributions made by OECD states in the form of Government assistance to the poorest countries in the world.
My final point, in expressing the hope that what looks like a calamity might be prevented, is that there is no moral equivalence between the position of rich countries pursuing unfair trade—hugely subsidising their own produce and dumping the surplus on the poorest people on the planet—and developing countries declining wholly to agree, or, perhaps, to agree at all, with the demand from the richest countries on earth that they should open their markets. The richest countries on earth are perfectly entitled to take the view that markets should be opened for services and the like, but developing countries are perfectly entitled to take the view that they do not want to do so because they prefer for substantial periods to enjoy policy space to build up their own domestic markets and to pursue their priorities. They are also entitled to take the view that they will consider doing so over a graduated period, depending on their economic strength, or when they have had the Doha offer, which they thought was the whole purpose of and rationale for the negotiations in the first place.
I do not like the fact that people, particularly in the western world, sometimes become so embroiled in the minutiae of the negotiations, or, in a professional capacity, are so stuck within the interstices of the system, that they can genuinely find themselves persuaded that it is really a question of a bit of give and take on both sides, and that if we are to consider abandoning or heavily reducing our agricultural subsidies, it is only reasonable for us to say to developing countries, “You’ve got to give us something in return”—the principle of the quid pro quo. I confess that I do not accept that principle. It seems to me that in the conduct of international trade, ethics do not have much to do with it, but they should. As well as a healthy dose of realism, which should of course inform any constructive approach to political negotiation, we should not lose sight of the need for a decent dose of idealism. It is wrong for the European Union massively to subsidise its agricultural produce in a way that hugely distorts trade and makes poor people in developing countries still poorer, and we should
commit, within a specified, and preferably short, timetable to stop it. If we are then able to persuade other countries to give something to us in recognition of our contribution, so be it, but we should stop it in any event.
Ann McKechin (Glasgow, North) (Lab): The hon. Gentleman raises an interesting point about the moral issues behind the debate. Given the rapidly changing globalised economy, does he agree that it is in the west’s long-term economic interests to accept that change is inevitable and that it would be better to deal with the issue sooner rather than later?
John Bercow: I agree entirely, but the problem is that the richest countries’ approach to negotiations is broadly similar to the Treasury’s attitude to public expenditure. In other words, given a choice between short-term saving and long-term benefit, the rich countries almost unfailingly err on the side of short-term gain for themselves. The hon. Lady is right to remind colleagues that, in the end, the richest countries need a deal; they do indeed need access, but they also need to get away from the subsidy-junky culture in the interests of their own consumers, and I hope that that will happen over a period.
Estimates vary as to how far successful negotiations would increase world trade and reduce the number of people who are destitute. Some of the figures are very high, but even if we take the World Bank figure, we are reckoning on the possibility, with a realistic deal, of gaining between $90 billion and $125 billion by 2015. Estimates vary as to whether we could release 2.5 million people in Africa from poverty or whether, if we were really bold and effective and drove the reform process forward in the interests of the poor, we could release nearer to 150 million. At the moment, we are nowhere near; indeed, we are teetering on the brink, and there is every danger of complete collapse.
We must ask ourselves whether it is right that we in the rich world should allow a situation of collapse, in which we continue to exist pretty comfortably thank you, with no destitution whatever of the kind that is found in the developing world. If we do not think that that is an acceptable state of affairs, all participating western Governments, including the United Kingdom Government, should be prepared to say, “We are willing to make significant short-term sacrifices,” and then, through explanation, communication and galvanisation, to exercise the political leadership that is required to secure support from the British electorate.
There is sometimes an assumption that a deal that involves an element of material and striking sacrifice by us in the short term will be too difficult to sell, but I do not agree. If the Government were bold and made the case publicly and vociferously, Ministers would find that Opposition politicians would sign up to it to boot. I have never been afraid to tell people in my constituency, which is in a semi-rural patch with a not insignificant number of farmers, “British agriculture policy is wrong and needs to change.” There is a case for public subsidy of agriculture, but it should not be public subsidy of a kind that is hugely trade distorting and whose effect, which we can anticipate, is to exacerbate the plight of the poorest people on the planet. That policy must change.
Hugh Bayley: Will the hon. Gentleman give way?
John Bercow: I would give way if I were continuing my speech, but I am not, so I hope that the hon. Gentleman will understand.
3.14 pm
John Battle (Leeds, West) (Lab): As the Chairman of our Committee said in introducing the report and as other hon. Members have said, things have moved on since it was presented in April. The negotiations have been broken off and elections are looming in America. Moreover, as my hon. Friend the Member for City of York (Hugh Bayley) said, there is also an economic factor.
To pick up on some of the remarks made by the hon. Member for Buckingham (John Bercow), the economic context in the west is worsening. Hon. Members may have seen an article in the financial press yesterday stating that wheat prices in the US have hit
“a 10-year high...on fears of a further decline in global wheat production”
at a time when stockpiles are at a 20-year low. The article continues:
“The latest rise is expected to lead to higher food prices, affecting bread, breakfast cereals, pizzas and pasta”
throughout the western world in the next 12 months. I read that out simply because there is a debate on climate change on the Floor of the House and because there is now pressure on food prices following the failed harvest in Australia and drought elsewhere. Who will pay the highest price in that worsening context? As ever, it will be the poor of Africa. They will not get a chance to catch up as wheat prices increase and the rest of us scrabble to keep our heads above water.
Since the 1970s, when pressure built up for aid, and the 0.7 per cent. target was first established, it has always been recognised that the real key to development would be fairer trade, not aid. There was a wonderful cartoon of a Mexican peasant facing a well-dressed business man who was holding a teaspoon out to him with the word “aid” written on it. However, the business man’s other hand was round the peasant’s windpipe and emblazoned on his arm was the word “trade”. That has ever been the situation: a little teaspoon of aid cannot make up for the stranglehold on the windpipe of international trade. We should not resile, therefore, from insisting that trade and development go together, even if that seems to move back from an international agenda.
Over the past few years, there has been real progress on aid and debt cancellation, not least by this Labour Government. However, all the pressure that built up around the immensely popular Make Poverty History campaign, with the focus shifting to trade justice, is in danger of evaporating, not only because of the complexity of the issue, but because of the disillusionment about the Doha round.
Following the second world war, and even before globalisation became a major economic theme, it was generally recognised that there was a need for an international, multilateral, rules-based trading system, and that was the whole point of the general agreement on tariffs and trade. In 1995 the World Trade Organisation was set up. Encouragingly, it shifted the focus a little later by suggesting that we work towards establishing
trade rules that worked for the benefit of those who were locked out of the economic system—the world’s poor. It set out on purpose to enable poorer countries and their peoples to break into the dominant world economic trading system.
However, the rounds of talks, as we have debated endlessly in parliamentary Question Time, have repeatedly broken down. They have become enmeshed in the most incomprehensible arguments about intellectual property rights, investment measures and special product exemptions, and everything has been buried under complex acronyms, such as NAMA—non-agricultural market access—and the rest of them. Those of us who pay attention to the detail get stuck into the debate, but such problems are leading to increased disillusionment in the outside world, with people wondering whether the talks can ever deliver any change or justice for the poor. That generates disillusionment among those of good will, who believe in building, not an anything-goes free trade system, but a fair-trade, rules-based system that would at last be weighted in such a way as to deliver basic economic justice to poor people and their countries. There is now despair that that cannot possibly happen. As a result, we will lose all the pressure that built up around the Make Poverty History campaign, and people will believe that politics cannot change the world and nothing can be done.
There is therefore some onus on us as politicians, on Governments and on international bodies to tackle the agenda before us, even at this late stage. The Doha round is in suspension and is proving to be the most deeply disillusioning round of all time. It is not only blocking development progress, but making things worse by leaving a vacuum. Into that vacuum will move the bilateral agreements, which will increase inequality between the powerful and the poor trading countries.
During the development rounds, we talked about the limited negotiating capacity of the poorer countries, but that problem will be magnified in bilateral negotiations, when those countries will try simply to negotiate on a product-by-product basis. They will have no chance at all of getting a fair deal. “Bilateral” will mean that the poor get poorer.
In general it is recognised that poorer countries lost ground in the last negotiating rounds. Since 1994 the world trading system has reinforced the position, reach and access of the powerful, not the poor. Things have gone the other way. Deadline after deadline has passed and the Doha round has shown no sign of a development breakthrough.
Jeremy Corbyn (Islington, North) (Lab): Does my right hon. Friend acknowledge that one of the problems in Hong Kong was that the medium-income countries, such as Brazil and India, ended up negotiating on behalf of the world’s poorest, and that in reality the very poorest countries, representing the very poorest people in the world, were, in effect, totally shut out of all talks and invited in at the end to hear the results?
John Battle: I tend to agree with my hon. Friend. The message cannot be that we back away from complexity and getting down to the detail; nor should we have such a crude map of the world that we see it as rich versus poor, with the poor locked out again. I think that that is how things have worked out.
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