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The Earl of Sandwich: My Lords, it is a great privilege to congratulate the noble Lord on his authoritative speech. The famous name of Tummel almost tempts me into song, because the noble Lord is evidently at his best when he is walking high up in the Perthshire hills and taking the high road.
However, in a distinguished career, the noble Lord has not escaped the controversies of public and private ownership—as the chairman of BT, at the CBI, Mobil and, as he mentioned, the European Services Forum, and in many other frontline positions. As we have heard today, he has to tread a difficult path between liberalisation and corporate responsibility. On these subjects we all look forward sincerely to hearing him again, and many times, in the future.
This report contains a rich repository of evidence from most of the protagonists at Cancun and it keeps up the momentum, not to say the morale, which is needed to relaunch the Doha round in 2005. Some of it is now getting out of date and it is unfortunate that,
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owing to the timetable, it is nearly a year since the first witnesses were called. But that is not the committee's fault. The committee, the Clerks and advisers deserve every congratulation.
From the outset, the report reaffirms the importance of trade liberalisation. I recognise that as a general principle, although my emphasis may be different from that of the committee. I should declare an interest as a trustee of Christian Aid, which is part of the Fairtrade Foundation and the Trade Justice Movement, which has been one of the active NGOs involved in lobbying for the poorest developing countries.
I was pleased to see that the NGOs have been consulted on that subject in some detail, partly because of their expertise but also because they informally represent some of the least developed countries, which are never at the table. They do not have enough people to go round. I fully accept the point about NGO transparency in paragraph 185, but I was surprised that none of the individual embassies from those countries was asked to comment.
I am not sure whether they feel "twice blessed", in the words of the noble Lord, Lord Vallance. The history so far of liberalisation in Africa, the Caribbean and the Pacific is not a happy one. Even countries now quoted as successful economies—and the noble Lord gave some interesting examples—such as Ghana, Uganda and Mozambique, have been hit hard by successive waves of structural adjustment and other IMF-enforced programmes. As the right reverend Prelate said, with falling commodity prices they are finding it impossible to trade successfully under the terms and conditions expected of them.
In spite of the comments in the report, the NGOs which belong to the trade justice campaign are only too well aware of the need for trade liberalisation in its broadest sense. They are concerned about the betrayal of principles already worked out on the multilateral stage by European Union negotiators who seem bent on representing their own agenda for the sake of results. There is no doubt that world trade negotiations have been agonisingly slow, and may well get slower.
At this point I should like to ask the Minister: what attitude will the UK now adopt towards the next round in relation to the EU, remembering that one lesson from Cancun was that certain members states—against the UK's advice—distanced themselves too far from a common position which eventually had to be withdrawn? Will the Government take an even closer interest this time and remind member states of their common obligations to developing countries under various agreements at Copenhagen, Laeken, Lomé and more recently Cotonou?
Last week in the debate on the gracious Speech, I tried to re-emphasise the section of the Cotonou agreement of 2000 which sets out the objectives of poverty eradication and sustainable development. Under Article 1 it states:
"The partnership shall be centred on the objective of reducing and eventually eradicating poverty consistent with the objectives of sustainable development and the gradual integration of the ACP countries into the world economy".
The following year, the Laeken declaration of 2001 described the EU as:
"A power seeking to set globalisation within a moral framework, in other words to anchor it in solidarity and sustainable development".
It was a disappointment to me that the report did not refer to those objectives. They explain why globalised and liberalised trade may not, in itself, be in the interests of the more vulnerable developing countries. Obviously, the agenda of the G20 and the G90 cannot be the same. The committee recognises that, but its instinct was to see the NGOs as culprits, rather than to recognise the real difficulties of those countries.
Cotonou states that there should be a,
That means that sovereignty is a hallmark of any trade agreement. As the right reverend Prelate said, every country has, in theory, the right to accept or not to accept a new agreement. The important concept of special and differential treatment under Article 24, although formally proposed by the ACP countries, seems to have slipped down the EU agenda.
The "Everything But Arms" agreement has been helpful to some, but it has not been taken up because of its strict rules of origin criteria and because it is confined to the LDCs. However, I am glad to see the report, in paragraphs 89 to 110, reflecting some of the concerns that NGOs have about the EPAs and their reintroduction of the discredited Singapore issues, as I mentioned last week. At paragraph 109, the committee concludes that,
It was also a relief to see the committee's strong support at paragraph 157 for the removal of EU export subsidies, which have been mentioned. I hope that the Minister can give us some reassurance that the Government are pressing for that, given that the timetable may have slipped. Although it may appear to be a mantra for campaigners, slow progress in CAP reform has, at times, held up the entire process of WTO negotiations.
It was a pleasure to hear the DTI and DfID giving evidence together on Tuesday, but I wonder whether joined-up government will stretch to a new policy for the poorest countries. For example, what will happen if some countries prefer not to have EPAs and to fall back on the present GSP arrangements? Will the European Union recognise that universality cannot apply to all EPAs, when there is already provision for special treatment for LDCs? What alternatives will be offered to ACP countries unwilling or unable to find common ground? Can they return to the relative safety of the revised GSP? Will there be transitional assistance for some producers? Will that assistance have to come out of the aid budget?
There are many ways of getting round WTO compatibility, if the central principles enshrined in EU agreements are followed. Once again, I thank the committee for keeping these important matters alive.
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4.24 p.m.
Lord Judd: My Lords, the noble Lord, Lord Vallance of Tummel, is to be congratulated on a particularly effective maiden speech. It is clear that authority and power will be brought to future deliberations on this and other subjects in the House. At the outset, I should declare an interest, in the sense that I am a past director of Oxfam. As such, I am a member of what, I suppose, could be described as a club, the "Friends of Oxfam".
My noble friend Lord Radice and his colleagues have produced a very interesting and challenging report. I join with those who have expressed appreciation. In his introduction, my noble friend said that it was time to get a move on. I thoroughly applaud that sentiment.
The noble Lord, Lord Marlesford, for whom I always have a particular affection—we came into this House at the same time—has given us a historical survey with some charm and delight. He also brought home the point that the EU's purpose and foundation was about agriculture and the CAP: we should never underestimate the significance of that. As someone deeply committed to the European Union and to our membership of the European Union, I find myself among those who say that the future of the EU simply cannot be based on the significance of the CAP. If there is a certain route to disaster for the European Union, it is to remain committed in that direction.
The position of the Government on overseas aid and development matters is strong and enviable. As a former Minister with responsibility for overseas development, this is the first time in my experience that this country has a Chancellor who has made overseas development one of his personal priorities in public policy and one of the issues by which he wants to be judged. It is very much part of his political profile. I am glad therefore that we are now committed to meeting the target of 0.7 per cent of GNP, even though I feel that the date by which the target is to be fulfilled is not all that ambitious. If we take aid and development seriously, trade and, indeed, debt issues are obviously central to an effective strategy.
I, too, would like to start by saying a word or two about agriculture because it will be pivotal to any success of the next Doha round. I turn, first, therefore, to some challenging realities. The present rules of global trade, whatever is intended, in effect leave millions of farmers in poverty while greatly promoting the interests of the big agricultural enterprises and corporations. Most farmers around the world are among the poorest rural poor—some 1.2 billion people. They still struggle to exist on a dollar or less a day. Nearly 75 per cent of the workforce in the poorest countries depends on agriculture to eke out any kind of living.
While big agricultural corporations do well, very many poor farmers face ruin without access to land, water, credit, roads, transport, schools and healthcare. Of course, even in rich countries such as the UK, support for agriculture is heavily weighted in favour of the big farmers, while family farmers receive relatively little support and find it very difficult to compete.
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However, that is no accident. Rich and powerful countries have deliberately slanted the rules of agricultural trade in favour of the big farmers, inevitably at the expense of small farmers, all over the world. Global trade policies still allow the European Union and the United States to spend billions of dollars on subsidising their wealthiest farmers, encouraging over-production and the dumping of cheap surpluses.
Dumping pushes prices so low that it devastates the poorer farmers. In 2002, the US Government spent more than 3 billion dollars subsidising their cotton farmers. That amount is almost double the total US aid provided for the whole of sub-Saharan Africa.
The rich world lectures the nations of the poor world on the need to eliminate subsidies from their economic systems, but continues to spend 1 billion dollars a day subsidising its own agricultural enterprises. That is frankly immoral and undermines all commitment to development. The right reverend Prelate the Bishop of Manchester powerfully illustrated the issue.
Against that background, the position of the United Kingdom Government in the European Union is certainly commendably progressive in their determination to reform the CAP. A comprehensive ban on agricultural subsidies is essential to end the cycle of overproduction and disastrous export dumping. However, currently the European Union negotiations indicate that export subsidies will not be eliminated for at least another 10 years. Our Government should be encouraged to toughen up still further their negotiating position and press for immediate reform, as advocated by the Treasury, and call for a unilateral commitment—if need be—to get rid of the pernicious subsidy system. The European Union has talked about the right of developing countries to protect their vulnerable farming sectors, but talk is not enough. Practical and effective proposals are urgently required.
More generally on trade issues, there has been much advocacy of the virtue of level playing fields, but too many players are simply not fit enough to play on those fields. I suggest that it is na-ve, cynical or both to believe that if our commitment to enduring development is genuine, we do not have to have special arrangements tailor-made to ensure that all players can reach a point at which any prospect of a fair game becomes possible.
I have no doubt that trade can potentially bring enormous benefits to third world countries. However, the economic partnerships presently envisaged between the European Union and ACP countries are not a convincing model. As the executive secretary of the UN Economic Commission for Africa put it in the Financial Times on 23 November:
"Another challenges lies in the Economic Partnerships Agreement negotiations between African countries and the EU. Studies on the proposed EPAs suggest that if African countries agree to equivalent reciprocity for commitments by the EU, it will be the EU that gains economically, with Africa suffering significant costs. If the EU were to abandon the idea of symmetry in the final agreements to accept 'non-reciprocity', it would demonstrate a commitment to a new, pro-development approach to trade".
That is a challenge indeed.
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As the right reverend Prelate has argued, it is essential that the European Union does not push for inappropriate liberalisation of public services. There should invariably be impact assessments of liberalisation proposals so that the likely real and specific net impact of what is proposed can be determined. While I carefully noted the argument of the noble Lord, Lord Vallance of Tummel, personally I remain convinced that caution is especially important about making an overly dogmatic commitment to the privatisation of public services and infrastructure and to untrammelled outside investment in the process. Subsequently, if that happens, the tenets of liberal economics can too easily be mobilised to inhibit sensible initiatives by the country concerned.
As we begin to take a second look at our own recent infatuation with such policies in the United Kingdom, it would be ridiculous to be associated with a pig-headed insistence that developing countries, with the danger of far more dire consequences, make all the same mistakes. The day of a recommitment to the rational virtues of a mixed economy is coming. We should encourage the European Union to recognise this in its approach to trade policy.
Meanwhile, the European Union should convincingly open up its own markets for exports of goods and services from developing countries. Non-agricultural market access quotas end, I understand, on the 31st of this month. It would be deplorable if these were to be replaced by additional tariffs or other barriers to trade for the developing world.
It is, on the other hand, encouraging that the United Kingdom Government favour technical assistance for poorer countries in their participation in making trade policy. This deserves all possible support and should be urged on the European Union as a whole. Maximum possible transparency in decision making is an imperative.
I conclude with two wider thoughts. First, in this age of liberal economics we tend to forget that Adam Smith brought forward his ideas in the context of a strong, ethical system, to which he was committed. Liberal economics without strong ethics can become a nightmare—we have seen that in parts of the former Soviet empire—and we need to be very cautious about what we are doing in the wider world.
Finally, we have spent a great deal of time agonising about the dangers of global insecurity and terrorism. After a lifetime of working in these areas and international affairs, I have come to one firm conclusion: that terrorism and the cynical manipulators who use it to advance their objectives operate most successfully when there is a climate of ambivalence in large sections of the population—an ambivalence as to whether or not they are living in a just world.
Therefore—while I take second place to no one in the argument about the importance of the redistribution of wealth and resources more fairly in the world and fairer access to the riches of the world—we fool ourselves if we do not realise that one of the issues is redistribution of power in the world. What matters therefore is not only how we provide technical assistance to the governments
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of the third world in preparing for the negotiations at Doha—which is important and I support it—but how far the agenda at Doha is the agenda of the majority of the world's population and not the agenda only of the rich club members, however sophisticatedly presented, to which the majority of humankind is asked to respond.
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