Recommendations
1. We
welcome the increase in the number of DFID ministers, which reflects
the new roles and responsibilities that the Department has taken
on. However, we are concerned that the Trade Policy Minister's
brief may be too wide, including as it does areas as varied as
consumer affairs and climate change. We recommend that the Secretary
of State review the alignment of ministerial resources and departmental
priorities within one year of the new arrangements having taken
effect. (Paragraph 6)
2. We are concerned
that there is inconsistent use of ministerial titles in official
materials. While some variation may be unavoidable, we believe
that it is important that Ministers' titles should correctly reflect
their roles and responsibilities, and that these should be used
consistently across Government. This is particularly true during
a period of change and transition when stakeholders and the public
need to be given clarity and certainty. We therefore recommend
that the Ministers review the use of their titles by their departments
and resolve any confusion quickly. (Paragraph 10)
3. We welcome the
Minister's assurances regarding the coordination of trade policy
formulation and trade promotion activities. We recommend that
the Trade Promotion Minister be invited to attend all meetings
of the Cabinet sub-Committee on trade to ensure that overall trade
and development coherence is not undermined by divergent approaches.
(Paragraph 14)
4. We are concerned
that ad hoc decisions made by committee on which Minister
is leading on which issues could result in a less responsive system,
undermining any coherence benefits of the new arrangements. We
recommend that the Government publish a comprehensive list of
which Minister has lead responsibility for each individual issue
or negotiation to increase transparency and minimise confusion.
(Paragraph 16)
5. We support the
concept of a joint Trade Policy Unit as a component of improved
trade and development policy coherence, and we hope that the Government
can make the Unit work in practice. We recommend that the Minister
for Trade Policy monitor closely the impact on coherence and effective
team-work of the Head of the Trade Policy Unit spending the large
majority of his working week at BERR and only one day a week at
DFID. (Paragraph 20)
6. We regret that
interested parties have had to wait until mid-October, more than
100 days since the changes took effect, to gain a better understanding
of how the changes and new structures are likely to work in practice.
We are concerned that there continues to be a lack of clarity
and transparency over the mechanics of trade policy decisionmaking.
We believe the Government should have been—and should in
future be—more transparent and pro-active in setting out
clearly the implications of such changes. (Paragraph 21)
7. We are pleased
to note that the Minister has quickly ensured that the BERR and
DFID websites both now feature new pages and sections on the Trade
Policy Unit and its work, in response to our call for the out-dated
material previously available to the public to be replaced. This
matter is of particular importance given the role of departmental
websites in informing the public of how Government works. (Paragraph
22)
8. We broadly welcome
the machinery of Government changes, though we have some reservations
about the way in which these have been carried out. We believe
that the development emphasis, the new lines of responsibility,
and new Cabinet and official-level structures have the potential
to improve trade and development policy coherence to the benefit
of developing countries. We are concerned, however, that excessive
complexity and new layers of bureaucracy may have the effect of
undermining any improved coherence resulting from the changes.
We remain unclear as to how the changes will be evaluated for
their ability to deliver a more coherent trade policy and more
effective 'joined up Government'. We support suggestions for a
clear work plan for DFID under the new arrangements and for a
publicly elaborated cross-departmental strategy for the future
of UK trade policy. We hope to see far greater visibility of the
new structures than has been hitherto the case. We recommend that
the Government ensure that both DFID and BERR include trade in
their annual departmental reporting. (Paragraph 26)
9. We were concerned
to hear that developing countries may have lost confidence in
the response of developed countries to their views. Now that DFID
has been granted greater influence over the UK's trade policy,
we hope that, in the UK's case at least, lost confidence can be
restored. (Paragraph 28)
10. The critical issues
for the Doha Round remain the same as at the time of our last
Report. As we noted in March 2007, World Trade Organisation members
need to show the requisite political will to reach a deal. Developed
countries should reinvigorate the process with unilateral moves
or draw the process to a close if it is irretrievably moribund.
The Government should continue to make the case for unilateral
moves with other EU Member States. Again, we encourage the UK,
EU and all negotiators to approach Doha with sufficient flexibility
to succeed. (Paragraph 31)
11. We welcome the
European Commission's belated recognition of the need for a 'Plan
B' in the form of agreement on the goods-only element of Economic
Partnership Agreements, given the imminent threat of disruption
to exports facing developing countries at the end of the year.
(Paragraph 34)
12. Time is rapidly
running out for the Economic Partnership Agreement talks, with
the approach of the end-of-year deadline. In our previous Report,
we called on the EU to undertake planning to request a waiver
extension should EPAs not be concluded in time. We note that views
vary on whether a waiver extension is realistic, but we also note
that there has been little sign of any preparations by the European
Commission for this wholly predictable situation until very recently.
Some countries will simply not be ready to reach even a goods-only
EPA deal by the end of the year. The Everything But Arms option
available to Least Developed Countries is, in our view, a viable
alternative. But there appears to be no viable, pro-development
alternative plan for those non-LDC countries that do not agree
'goods only' deals with the EU by the end of the year. The difficulties
facing these countries is a matter of great concern to us. We
agree with the Trade and Development Minister that the basic Generalised
System of Preferences in particular is not an acceptable alternative.
We expect the UK Government to make this case vocally in its discussions
with other Member States and the Commission, and to ensure that
a more acceptable alternative is offered. (Paragraph 37)
13. We are uncomfortable
with the implication that goodsonly EPAs are only 'stepping
stones' to full agreements, given the EU's previous commitments
to include other issues only where individual countries or regions
actively seek to do so. We are also concerned about the possibility
that these interim deals may lack development components. We recommend
that the Government push for inclusion of aid for trade provisions
within these deals. (Paragraph 38)
14. We welcome the
fact that new rules of origin, which we expect to enhance developing
countries' ability to benefit from improved market access, are
to be an integral part of Economic Partnership Agreements. However,
the loss of Cotonou rules of origin for any country not reaching
a goods-only or full EPA by the end of 2007 serves to compound
the potential disruption for these countries in moving to less
generous arrangements, such as GSP. We recommend that, in its
reply to this report, the Government gives its view as to whether
Cotonou rules of origin could be maintained for countries unable
to agree a goods-only deal. (Paragraph 40)
15. We welcome the
continuation of the role of Ministerial champion for combating
international corruption. We would be concerned, however, if the
transfer of responsibility from the Department for International
Development to the Department for Business, Enterprise and Regulatory
Reform meant that these matters were now seen largely from a trade
perspective and that development concerns were neglected. We do
not agree with the Government's view that the visibility of the
role is of secondary importance: championing an issue by definition
requires a high-profile. We recommend that the Government prepare
a plan for promoting the role and the associated action plan and
that it share this with the Committee within two months. (Paragraph
43)
16. We ask the Government
to inform us in response to this Report: how many cases and allegations
of trans-national bribery have been referred to the Serious Fraud
Office for investigation; how many have been investigated by the
SFO and closed without charges being brought; how many cases are
currently under investigation; and when the Government expects
the first case of trans-national bribery to be brought before
a UK court. (Paragraph 45)
17. There are questions
for the Government to answer about the UK's implementation of
the OECD Anti-bribery Convention and whether the decision to halt
the BAe Al Yamamah investigation is consistent with the Convention.
We are concerned that the UK has failed to act expediently on
recommendations from the OECD Working Group on Bribery. We recommend
that the Government make every effort to resolve all these issues
during the forthcoming review conducted by the Working Group and
that it make a clear commitment that time will be found in this
or the next parliamentary session to enact the new legislation
recommended by the Working Group. (Paragraph 49)
18. The National Contact
Point is a key instrument for national-level implementation of
the OECD Guidelines for Multinational Enterprises. It is therefore
of paramount importance that the UK Contact Point is a well-resourced,
credible body. We share the concerns that some key stakeholders
have raised about both the effectiveness and impartiality of the
NCP. We recommend that the Government undertake a review of the
impact of the 2006 restructuring of the NCP and of the resources
available to it. (Paragraph 53)
19. We will follow
with interest the progress of the Global Witness complaint against
Afrimex as a test case for the restructured UK National Contact
Point. We believe it is unacceptable that the Government has not
investigated the activities of Alfred Knight, nor even contacted
the company, despite the findings in our Conflict and Development
Report and the evidence taken in that inquiry. We call on the
Government to be pro-active in these matters generally and to
investigate the case of Alfred Knight's activities in the Democratic
Republic of Congo in particular. We expect the Government to provide
us with a full report of its past, current and planned action
in connection with the Alfred Knight case within six months. (Paragraph
55)
20. We recommend that
the Government assess the initiatives taken by Canada and the
USA to promote the OECD Risk Awareness Tool, with a view to drawing
up a UK plan for its promotion within six months. We also recommend
that the Government look at the case for contributing to a fund
for a web-portal for the Tool, which we believe could encourage
its active use. (Paragraph 58)
21. We welcome the
progress on encouraging resource-rich countries to adopt the Extractives
Industries Transparency Initiative. We recommend that the Government
continue to pursue this actively and to promote the Initiative
as a model for other sectors. We also recommend that Ministers
at the Foreign and Commonwealth Office and DFID make greater effort
to agree and coordinate an active lobbying strategy for a UN General
Assembly resolution which would establish the EITI as a global
standard. (Paragraph 61)
22. We reiterate our
view stated in our Conflict and Development Report that the Government
needs, as a matter of urgency, to push for an internationally
agreed definition of conflict resources. We encourage the Government
to work closely and actively with those of a like mind towards
agreement at the UN and to make more visible to stakeholders its
support for the initiative. (Paragraph 63)
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