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12 Oct 2006 : Column 175WH—continued
The hon. Member for Buckingham (John Bercow) and my hon. Friend the Member for Islington, North (Jeremy Corbyn)—and, implicitly, other hon. Members—reminded me, and the House more generally, of the need to restate the moral case for progress on trade to be made. At the heart of that moral case are two key statistics. All Members who have taken part in the debate will know, although other Members of the House may not, that 1 billion people in our world live on less than $1 a day. Too often, that means that they do not have a regular source of food, that they may have to walk miles to get access to water, which we in the UK take for granted, and that essential medicines that we rely on are unknown or unthinkable because they are inaccessible. Surely, in a world of plenty such as we are used to, that statistic should shame us into wanting more progress.
If that statistic were not enough in itself to make the moral case, there is another one: 100 million children do not have access to primary education—not secondary or university education, but primary education—and therefore do not have the opportunity to read and write, and do not have access to the computers or whiteboards that our children take for granted, or to teachers who can help children to lift their eyes beyond the communities in which they live and to think about the world beyond them.
The world’s youngest and most vulnerable citizens do not have access even to primary education predominantly because their Governments do not have the resources to invest in building schools or to pay teachers’ salaries. Those Governments do not have those resources because there is not economic growth to fund taxation revenues, and there are not trade opportunities to fund and drive the economic growth that they need. Those two statistics are at the heart of the moral case.
The Government have made many efforts to make that moral case—and to make it successfully—to the British people. The fact that the Government have created a Secretary of State with responsibility for such issues, the fact that they have given a commitment to make progress towards the 0.7 per cent. goal, and the fact that they seek regular opportunities to make the case for innovative sources of finance are proof not only that have we accepted and exercised the responsibility to show leadership on such issues, but that the British people want us to make progress and support the efforts that we are making.
However, in the context of the suspension of the talks at the end of July, I accept the sense of pessimism and frustration, and the desire to restate the case for progress and to make one last heave to get the agreement that we want. I understand the pessimism, but I believe that now is not the time for it. Now is the time to redouble our efforts to get an agreement, and that is why the meeting of parliamentarians under the auspices of the Finnish presidency is important. That is why the meetings initiated by Oxfam that took place this week in the UK and across Europe have been important, bringing people together from the developing world to discuss their concerns about the trade agenda, but implicitly recognising the benefits if we get the trade agenda right for those countries.
My hon. Friend the Member for Islington, North made an important point. He reminded us that the people who stand to gain the most from a good
development outcome to this round of talks—the very poorest—must have the opportunity to have a say. They must have a stake in the discussions about the priorities in the negotiations. The Department has sought, through the national development planning processes of the developing country partners with which we work and through the paper process of the poverty reduction strategy, to encourage Governments to engage with civil society so that the voice of the poorest is heard on trade issues as well as other, wider issues.
Jeremy Corbyn: I thank my hon. Friend for the way in which he has dealt with this point. At the Geneva talks, what particular representation was available for representatives of Burkina Faso, for example, and the poorest countries? The very poorest often lose out at the preparatory stages and the agenda-setting for the big talks.
Mr. Thomas: I cannot comment specifically on Burkina Faso, but I shall make a general point. Through trade-related capacity building support—I know that that sounds like a terrible piece of jargon—and our funding for that programme, we have funded research by UN groups, by civil society organisations and, on occasion, by negotiators. We have also funded computers for different people in key negotiating teams so that they have the most basic infrastructure that they need to engage in those talks. We have done a lot, and other countries and the European Commission have helped to pick up the tab. Support has been provided and we will continue to provide it.
In response to the frustration at the lack of progress that was referred to by all hon. Members, I want to return to the point made by the right hon. Member for Gordon and the hon. Member for Richmond Park (Susan Kramer), which was that one or two non-governmental organisations say that the worst possible thing now would be for the talks to resume. That flies in the face of what developing countries want to see. No Minister from a developing country that we have visited has ever said to me—nor, I believe, to the Secretary of State—“Please do whatever you can to derail progress in the Doha round of talks.” They want progress to take place. Even the least developed countries, which will not be able to take advantage immediately of the opportunities that the Doha round might offer, want progress to take place so that they know that those opportunities will be there for them to take advantage of in time.
I accept the need to restate to our partners in Europe and beyond both the moral and practical cases for the need to make progress. However, beyond the moral case, we must recognise that we must be practical about the way in which we seek to make progress. Sometimes we need to be careful about the language that we use when we are frustrated about the pace of progress. Although it is true to say that one of the reasons that we did not make progress in the talks was because our friends across the Atlantic did not give enough ground in cutting the subsidies paid to farmers, we need to be careful about the language that we use when we refer to them and to our European allies. We need to see more market openings in the European Union, particularly in the agricultural sector. We all know which countries
present particular challenges about giving ground on creating more openings in the market.
We also need an increased willingness to open the market for industrial goods from the larger developing countries, especially Brazil and India. That is the key not only to encourage support for further progress from key parts of the European Union but, in the long term, to increase opportunities for south-south trade. In essence, however, hon. Members are right to say that at the heart of why we do not so far have a trade deal is the fact that political will is not yet strong enough. As a Government, and as a coalition of Governments in the European Union, we must seek to build political will and to close the gap. Although the gap has narrowed substantially, more work clearly needs to be done.
I agree with my hon. Friend the Member for City of York (Hugh Bayley) that it is unlikely that we will see more progress until after the mid-term elections in the United States. That is true, but there will be an opportunity for progress after that. It is certainly true that in public and in private we are doing a lot to try to build political will and to explore the scope to close the gaps. I am sure that hon. Members will understand that I will not go into detail about the various steps that the Government are taking, but I will say that not only the Department for International Development is playing a role. Ministers from the Foreign and Commonwealth Office, the Department of Trade and Industry and the Treasury, as well as the Prime Minister, have been making the case to close the gap, and we shall continue to do just that.
A number of hon. Members asked what progress we can secure outside the Doha round, not only to provide encouragement but to generate momentum and political will. There are two specific matters that I want to highlight. Both my hon. Friend the Member for Glasgow, North (Ann McKechin) and the hon. Member for Richmond Park mentioned aid for trade: the capacity building support for customs and the improvement of infrastructure. The ambassador for Rwanda talked about roads, electricity and bridges—key things that help to make trade easier. We are pushing hard to ensure that substantially increased aid for trade goes ahead regardless of progress on Doha. It is a good thing in itself, but it will, crucially, help the least developed countries to make progress so that they can take advantage of the opportunities. It will also be crucial for the implementation of economic partnership agreements.
Malcolm Bruce: I think that developed and developing countries accept that infrastructure investment is necessary. Indeed, they were talking about that before the aid-for-trade initiative was moved forward. However, does the Minister understand that there would be a slight sense of disappointment and frustration if all we were talking about is how we focus the promised aid budget, rather than how we create new initiatives to make any trade deal deliver real trade benefits? If the same aid is simply redefined, that does not change anything for such countries.
Mr. Thomas:
If it were the same level of aid, I would accept that. However, the commitment was given in May 2005 by European Ministers, for example, to agree a target and a date for achieving a total of 0.7 per cent. as the proportion of national income for each country’s
budget for development assistance. That means that aid budgets will rise over the next nine years. Ensuring that additional resources are available for investment in aid for trade will be crucial. Further spending on aid for trade is clearly no substitute for progress in the Doha round, but if we can develop momentum around it, it is something tangible outside the Doha round that will help progress, which we all want to see, to be made.
John Bercow: It would serve to concentrate minds if we had some sense of the difference that would be made to progress on the millennium development goals by a successful conclusion to the round. Have officials in the Minister’s Department or in the Department of Trade and Industry made any estimate as to the likely impact of a successful round on the speed with which some or all of the MDGs could be reached?
Mr. Thomas: A number of surveys and analyses have been undertaken by a variety of organisations on what the benefits might be of a good Doha round. For example, the United Nations Conference on Trade and Development has suggested that a good outcome to the NAMA negotiations might generate gains of up to $100 billion. Similarly, the OECD has suggested that cutting tariffs and subsidies in agriculture and NAMA by 50 per cent. would generate gains of $44 billion. Research and analysis have considered possible scenarios for the Doha round, and they all show that the gains would be hugely significant in making progress towards the millennium development goals.
To return to the question of UK spending on aid for trade, we have made commitments before. Just before the IMF and World Bank annual meetings in Singapore, my right hon. Friends the Chancellor and the Secretary of State announced a new forecast for our spending on aid for trade, and we expect to see spending increase by some 50 per cent., to about $750 million, by 2010. That reflects a definition of aid that includes economic infrastructure, transport, energy, ports and communications, as well as support for capacity building work—the customs improvements—to which I referred.
The second factor that offers an opportunity for progress—it would help the Doha round outcomes but it stands in its own right as it, too, will be crucial in ensuring that economic partnership agreements are development-friendly—is if we move forward on the rules of origin in trading arrangements. They are crucial for developing countries because they determine the real level of market access that an agreement can provide.
Rules of origin made under the EU’s current trading scheme are completely out of date, are complex and unnecessarily restrictive, and they impede developing countries in benefiting from the trade agreements. We want simpler and more liberal rules of origin, so that developing countries can source the materials that they need from other developing countries without losing their eligibility to trade those goods into our markets. We are determined to work with other member states in the months ahead to speed up the European Union’s review and to seek implementation of the findings of that review, regardless of the state of progress on the Doha round.
My hon. Friend the Member for Glasgow, North was the first to mention economic partnership agreements. Whatever happens on the Doha round, there is a separate track of negotiations for economic partnership agreements. Those negotiations have their own energy and deadlines, but they are nevertheless related to the Doha round because of their importance.
Properly designed, EPAs have the potential to deliver genuine economic benefits and to contribute seriously to poverty reduction in African, Caribbean and Pacific countries. However, I must add a number of crucial caveats to that statement. The development potential of EPAs will be realised only if ACP countries make their own decisions on how and when to open their markets, in line with their development plans. That is the sequencing point referred to by the hon. Member for Boston and Skegness. We will not support the forcing of liberalisation on developing countries through either trade negotiations or aid conditionality.
We are also clear that three of the so-called Singapore issues—Government procurement, investment and competition—must be dropped from the EPA negotiations unless the negotiators of the ACP group specifically request their inclusion.
Jeremy Corbyn: I welcome what my hon. Friend said about not forcing trade liberalisation. That is clearly the Government’s position, but how will it play in the EU?
Mr. Thomas: Another of the issues that the Minister for Trade and I will have the opportunity to discuss at the EU Council next week is economic partnership agreements. My hon. Friend will know that in March 2005, the Government published their position on economic partnership agreements, and we have been using that to lobby other member states and our friends in the Commission. A series of discussions under the Finnish presidency will provide us with the opportunity to restate those arguments, and a crucial review of the EPA negotiations is about to get properly under way. We will take advantage of those opportunities to press the case, as I have described.
John Bercow: There is a precedent here; we are not talking merely about what will happen in the future. If I remember rightly, in July 2005 the British Government set out their position as part of the G8 communiqué, which explicitly stated that there should be no forced liberalisation. However, as I understand it, the Government signed up to the EU position at the Hong Kong negotiations. Did the British Government feel constrained by the principle of polite chairmanship, or presidency, and thus less able to argue their case effectively?
Mr. Thomas: As the hon. Gentleman knows—he is an enthusiastic supporter of the European Union—the reality is that we are one of 25 member states. The negotiating position of the European Union is therefore achieved through negotiation and, in the end, a consensus position. We cannot just put our documents on the table and expect every other member of the European Union to roll over instantly and agree with our position. If only that were the case.
However, we are using the document that we published in March 2005 on EPAs to make the case for development-friendly economic partnership agreements. At the heart of what we think a development-friendly EPA should look like are more liberal and less complex rules of origin and, crucially, maximum flexibility as regards developing countries’ own market opening. That means, in our view, duty-free and quota-free access to EU markets for all ACP countries, not just the least developed countries that currently have such access.
There is no substitute for an ambitious and successful outcome to the Doha round. Considerable
progress has been made, but there is undoubtedly more to do. We will use every opportunity that we have as a Government. A range of Ministries are engaged in discussion with our partners, from my Department right up to my right hon. Friend the Prime Minister. We will continue to press for change and the deal that we want. I hope that the pessimism, understandable as it is at this point, will in the end turn out to have been misplaced.
Adjourned accordingly at two minutes to Five o’clock.
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