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Baroness Amos: My Lords, the noble Lord will know that we were at the forefront of the discussions with the European Union which led to the CAP reform

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deal. The big element of that deal was the breaking of the link between production and subsidies. I am happy to write to the noble Lord giving some of the more technical details of the agreement.

Noble Lords will know that, in discussions on CAP reform, we wanted to go much further. But, obviously, there are very different interests within the context of the European Union. We thought that, given those differences, the CAP reform deal was historic. Despite the disappointment expressed by some developing countries that the CAP reform deal had not gone further, I do not think that that led to the breakdown of the talks. In fact, we were closer to some form of agreement on agriculture than on any other issue. It was on the new issues—the Singapore issues—that the talks fell down. There was a general feeling that—there not being agreement on the Singapore issues, despite the movement by Pascal Lamy—moving on to talk about agriculture would not take us much further. That was not necessarily our reading of the situation. Unfortunately the talks failed.

Lord Barnett: My Lords, I have not had the opportunity to congratulate my noble friend on her elevation to the Cabinet. I do so now. I am delighted with that promotion. I am less than delighted, not just about what came out of Cancun but with the policies of the European Union and, indeed, the United States—where we have no responsibilities of course. However, like the noble Lord, Lord Waddington, I am extremely concerned about European Union policies on agriculture.

I do not know whether my noble friend—she has been rather busy of late—has had an opportunity to read the unanimous all-party report on globalisation of the Economic Affairs Committee, which made it clear that globalisation has not been the cause of trouble in the poorest parts of sub-Saharan Africa; much of it is due to the corruption and civil wars that have taken place in those areas. On the other hand, while I appreciate the increase in aid that the Government have provided, it is a drop in the ocean in comparison with the damage that the common agricultural policy does to those poorest developing countries. Does my noble friend agree with that?

Does my noble friend agree that if there is to be any hope whatever of real help for countries such as those in sub-Saharan Africa, which suffer so much from the effects of the common agricultural policy, the UK Government will need to take measures to try to convince the European Union to change those policies?

Baroness Amos: My Lords, it is really important that we recognise what the CAP reform deal delivered earlier this year. We also need to recognise that it is part of a process of continuing reform. EU export subsidies have fallen by some 70 per cent in the past 10 years. The Government recognise that there is still some way to go. However, let us not rubbish where we have got to, because the split between production and subsidy is a very important step on agriculture. More CAP regimes are up for reform this autumn, including

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cotton, which was a big issue in our discussions at Cancun. Next year, we shall consider sugar, which continues to be an extraordinarily difficult matter.

I agree with my noble friend: we need to work to convince our EU partners to move further. I also agree that the volume of aid to developing countries will not deliver the kind of change in sustainable development that we want. That must come from economic growth. To meet the millennium development goals, developing countries will have to average growth rates of about 7 per cent. In sub-Saharan Africa, they are averaging only 3 per cent, so there is a huge gap to be met. We are attempting to increase aid resources through the international financing facility on which my right honourable friend the Chancellor is working, but giving developing countries access to trade and growth is the key to development.

The Earl of Sandwich: My Lords—

Lord Biffen: My Lords—

Baroness Crawley: My Lords, there is plenty of time for everyone to speak.

The Earl of Sandwich: My Lords, I thank the noble Baroness for repeating the Statement, despite its dismal contents. I listened carefully when she answered the noble Baroness, Lady Northover, who pressed her on the EU position. It is abundantly clear to all of us that there was a strong difference between our position and that of the European Union. The Secretary of State's answer confirmed that.

Does she agree that, as so many non-governmental organisations are saying, the developing countries viewed the Singapore issues as a form of Trojan horse to bring back the much-hated multilateral agreement on investment, which, as she said, we rejected so many years ago? Did they not fear that that would return all over again? Can she also elaborate on why the European Union had not discarded that negotiating position? Is she absolutely certain that it has now discarded it, or will it return in another form?

Baroness Amos: My Lords, first, it is important for noble Lords to recognise that European Union countries agree a negotiating position and a mandate. We stand absolutely behind that mandate. Having said that, my right honourable friend Patricia Hewitt and I have made clear that we did not view the new issues—the Singapore issues—as a development priority.

The concerns of developing countries crossed the spectrum. Some were concerned not to negotiate on new issues because they simply felt that they did not have the capacity to do so. Others were concerned about the impact on their economies. I have a personal view on investment. From talking to businesses about the need for greater foreign direct investment in Africa, it is absolutely clear that one thing that would help would be such an investment agreement.

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That is a personal view that I have expressed to Ministers of developing countries, but I have also made it clear to them that their view of the subjects on which they feel able to negotiate at any particular time should prevail in the WTO. Given that the WTO is a "one member, one vote" organisation and that we cannot discuss issues unless all are agreed, we reached the situation that we did in Cancun.

However, there was by no means unanimous agreement across all developing countries. Some of the middle-income developing countries, as it were, argued that all those issues should be on the table. African countries were saying that all of them should be off the table. The European Union said that we were quite happy to withdraw on competition and investment, and that our starting point for the next round of negotiations assumed that.

Baroness Miller of Chilthorne Domer: My Lords, when Mrs Beckett returned from the CAP negotiations, she said that the results would put us in a good position for the forthcoming WTO round. In retrospect, does the noble Baroness feel that she was over-optimistic, badly advised or simply misjudged the situation?

Baroness Amos: My Lords, none of those. The CAP reform proposals put us in a much better position to move forward on agriculture. As I said in response to the noble Baroness, Lady Northover, we felt close to a deal on agriculture at Cancun, if we had had a bit more time. That would have made a substantial difference, especially to the poorest countries in the world. So I do not believe that my right honourable friend was being over-optimistic. When I left Cancun on Friday—the talks broke down on Sunday—the discussions were robust but there was then no feeling that the talks would collapse. There was still a feeling that, although there were differences, we could reach a deal.

Lord Biffen: My Lords—

Lord Tomlinson: My Lords—

Baroness Crawley: My Lords, we have not heard from the Labour Benches.

Noble Lords: Yes, we have.

Baroness Crawley: My Lords, I apologise.

Lord Biffen: My Lords, with characteristic courtesy, the noble Baroness has put the whole agony of Cancun before the House and, understandably, said that she regretted its failure. But was she surprised? The World Trade Organisation seems to be the most ill-constructed body for decision-taking. The very size of it is a challenge. The dubious principle of "one nation, one vote" and the proliferation of non-governmental organisations make it an enormous gathering that cannot come to decisions.

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We are now told that it was touch and go whether it did a deal on agriculture. If it had, would that deal in any sense be rooted in the real world? How can a whole group of itinerant politicians and their advisers sitting there really get down to carve up the global market in supply of and demand for agricultural products? That is unfeasible even in the context of the European Union trying to make its own painful arrangements in agriculture, which are modest in ambition compared with those of the WTO.

I ask one specific question to bring the issue of agriculture into greater reality. What decisions have been taken in the assessments of agriculture about the use of genetically modified crops? Is it accepted that they may have an enormous impact on the balance of supply and demand not only of agriculture but of many social problems related to it? Are decisions taken at Cancun or in the WTO automatically transferred to each national situation? Is it suggested that decisions in that forum will authorise what may or may not be done about genetically modified products in this country? Or is it accepted that that is a matter of such sensitivity that it properly belongs to this Parliament?

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