Examination of Witnesses (Questions 232-239)
RT HON
MARGARET BECKETT
MP, MR SEBASTIAN
WOOD AND
MR DENIS
KEEFE
13 JUNE 2006
Q232 Chairman: Secretary of State, can
I welcome you to your first appearance before the Foreign Affairs
Committee, the first of many, and you will be here again next
week.
Margaret Beckett: I hope that
is a promise, Chairman, not a threat!
Q233 Chairman: Yes, and we look forward
to having a constructive relationship with you in your new post.
Perhaps you could introduce your colleagues before we begin and
then we can move into these questions on this inquiry on East
Asia?
Margaret Beckett: Sebastian Wood
and Denis Keefe. I am afraid you will have to forgive me for not
at this moment being completely familiar with their titles.
Mr Wood: I am the Director for
Asia Pacific.
Mr Keefe: I am the Head of the
Far Eastern Group, which means China, Japan and Korea.
Q234 Chairman: Thank you very much.
Can I begin by just asking a general question about the impact
of the phenomenal economic growth in the People's Republic of
China and what that means for our own country, for the rest of
the European Union, and for the shift of global power towards
China and Asia as a whole?
Margaret Beckett: For our own
country, for the EU, and what was your third category?
Q235 Chairman: For the rest of the
world.
Margaret Beckett: Globally, generally.
It is a phenomenal growth rate, a phenomenal impact, you are right
about that, and it is being made visible in such a variety of
ways, the sheer impact, for example, on resource consumption,
and the recognition of the fact that however great that impact
may be today, it is going to be so much greater in the future.
I think that is the thing with which perhaps people are coming
to terms more gradually than with the recognition of China's initial
impact as people see it today. For us, in many ways of course
it has benefitted our economy and it has benefitted our consumers
insofar as China is a source of perhaps sometimes rather cheaper
goods and products. I would say, and my understanding is that
the Chinese would say, although no doubt you will tell me if they
said something different to you, that we have a very, very good
working relationship with China, possibly better than we have
ever had and that we are seen as people with whom China can work
to our mutual benefit—I stress to our mutual benefit, to
China's benefit and also to the benefit of the people of the United
Kingdom—and as people who have skills and ideas to offer
which can be of use to China. I think that is also seen to be
true of the EU more widely. I also believe that there is a recognition
within the EU that although as individual Member States we have
our own engagement with China, that the EU and China on the world
stage can also be quite major players. In fact, last year during
our EU Presidency one of the things we worked at was both to foster
an EU/China relationship and also to get across to all our colleagues
how beneficial that could be. In terms of their global impact,
of course, as I say, they are already massive players, they will
become more so, and possibly in ways that we cannot yet wholly
foresee.
Chairman: Thank you. Can I bring David
Heathcoat-Amory in on Europe.
Q236 Mr Heathcoat-Amory: Trade is
a huge issue now and you have a trade minister in your Department
of course, but trade is not without its disputes. We see a lack
of respect by China for intellectual property, for instance, and
also in manufacturing last year we had the issue of textile quotas,
the so-called "Bra Wars", and this year a dispute over
footwear anti-dumping cases. Members of the EU divide loosely
between protectionists and free traders. How do you see your Department
acting in future as between those two stances?
Margaret Beckett: My Department,
as with the rest of the British Government, is very much a department
that recognises the benefits and the advantages of free trade.
With all of the shorter term difficulties that that can sometimes
create, we still believe that it is in the long term beneficial.
You said that trade is huge now but actually it has been an enormous
issue for quite a considerable length of time, and you probably
will not recall, and there is no particular reason why you should,
but some years ago I was the Secretary of State for Trade and
Industry, and in fact I was the first minister to go to China
in the Labour Government in that capacity after the 1997 Election,
and then trade was a huge issue. One of the things that concerned
me then, and I am pleased to see is now improved, but I think
there is still further to go, was that we were a massive investor
in China but others who were not such large investors had a greater
share of the trade. That is something that we thought then and
I believe now is a balance we need to redress and I think we are
beginning to do so. However, as you say, there is also the issue
of trade disputes. I take your point entirely about intellectual
property. My perception and my understanding is that this is improving.
It is not perfect, no doubt there is further to go, but I understand
that China is showing every sign of recognising their WTO responsibilities,
recognising the advantages of the good governance/rule of law
perception and what that means for things like intellectual property.
Of course, as I think we all appreciate, not least because it
is such a vast place and there is so much local disparity, what
is accepted at central government level is not always so easy
to deliver at local level, which is why one gets all these arguments
about piracy and so on, but in general I think on IPR things are
going in the right direction. I think there is a responsibility
on us, particularly as we do, as I think we should continue, believe
in the advantages of free trade, to try to show China on issues
like the textile issue and shoe issue, and so on, that the multi-lateral
trade regime works, and it works fairly.
Q237 Mr Heathcoat-Amory: On those
two manufacturing trade disputes that I mentioned, on textiles
and shoes, the outcome was really a victory for the protectionists
in the European Union. Quotas were reimposed in the case of textiles,
which caused great resentment in China. Are you happy that British
trade policy should be decided by bargaining between broadly the
south Europeans, led by the French, and the Scandinavians and
north Europeans trying to keep trade open? It seems to me a very
capricious way of conducting British trade policy.
Margaret Beckett: There are nuances
of different approaches within the European Union but in a sense
the essence of the question you are asking me is do we try to
pursue our own policy or do we pursue it also within the European
Union. There are so many advantages—and I speak by the way,
for the record, as somebody who campaigned for a No vote in the
referendum in 1975, which is not true I know of everybody who
takes a different point of view now!
Q238 Mr Heathcoat-Amory: I campaigned
for a Yes vote!
Margaret Beckett: I was not aware
of that but I am not surprised. I remember having exactly that
conversation with Eric Forth on the floor of the House on many
occasions. However, I am a convert in that direction as you are
a convert in the other. I simply say to you that I do think it
is very much in our long-term interests to operate as an EU bloc.
Of course, there will always be different national interests and
different nuances of approach, but I think that there is a recognition
within the EU of the advantages of a proper multi-lateral regime
and of free trade. Insofar as there are growing protectionist
concerns in the EU, that is a global phenomenon. That is not specific
to the EU or to the EU's relationship with China, but there is
also perhaps a global phenomenon of some nervousness about the
impact of China, which goes back to the question the Chairman
asked me, and that is why again it is in everybody's interests
to see a proper rule of law, if I can put it like that, within
trade issues.
Q239 Mr Keetch: For the record I
was too young to campaign in the referendum but would have campaigned.
One specific point, Foreign Secretary, on exports, if I may. You
know as a former Trade and Industry Secretary how important Expo
is. Shanghai is hosting Expo in 2010. We saw the plans that have
been drawn up and the pavilion layout in that fantastic city is
going to be astonishing. Lot of cities have got their towels on
the beach; Britain has not. Can you give this afternoon a commitment
that Britain will take part in Expo 2010 in Shanghai? If you cannot
give that commitment, could you please ensure that commitment
will be given, frankly, one way or the other very soon because
a lot of British businesses are very disappointed that we are
not already signed up?
Margaret Beckett: This is an issue
that has to go to the Prime Minister but what I can certainly
tell the Committee is that I do intend to recommend to the Prime
Minister that we should in principle accept that we should be
participants in Expo. Like you, I recognise what a fantastic city
Shanghai is and what a record it has and I have little doubt that
it will be a tremendous event.
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