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Lord Cobbold: My Lords, I add my congratulations to the noble Lord, Lord Vallance, on an excellent and authoritative maiden speech. I am sure that his experience will be of great value to the House in the years to come. I offer him a big welcome and many congratulations.
I speak as a member of the sub-committee but as one who has not been a member for long and for whom work on the report we are considering today was a new and fascinating experience. In that context, I echo the words of the noble Lords, Lord Radice and Lord Marlesford, by saying how impressed I have been by the seemingly effortless professionalism of our support team. I both thank and congratulate them.
As has been said, our report has, to some extent, been overtaken by events. We started our work a year or so ago in an atmosphere of gloom following the failure of the Cancun meeting. It seemed doubtful that the Doha agenda could be saved. Our report, published in June, stated that,
"the EU must put the failure of Cancun behind it and work for agreement by the end of July 2004 on a framework for negotiations in order to secure a successful outcome to the Doha Round by early 2006".
Happily, it turned out that the WTO General Council meeting on 31 July reached agreement:
"To complete the Doha Work Programme fully and to conclude successfully the negotiations launched at Doha".
The derailed train was thus put back on the track. That this happened at all must not be attributed to any great extent to our report but very largely to the efforts of Pascal Lamy, the EU Trade Commissioner, and his opposite number in the US, Bob Zoellick. Both those gentlemen were due to be moved from their present positions by the end of this year, following the presidential election in the United States and the new Commission in Brussels. They were therefore keen to leave their mark positively, which they did.
Pascal Lamy was one of the most interesting witnesses we interviewed. Among other things, he stressed the importance of the new G20 group of emerging economies, which includes China, India and Brazil. This group has growing and powerful economic interests in common, which increasingly differ from those of the G90 group of less developed countries. This process will make it easier for the problems of the G90, the less developed countries, to be assessed. We heard from the right reverend Prelate and from the noble Earl, Lord Sandwich, about the difficulties that individual developing countries have in working in the area of trade liberalisation. Certainly, the WTO has a huge resonsibility to treat those problems very carefully and with careful discrimination between individual participants. This separation of the G20 and the G90 will be a beneficial factor.
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We questioned M. Lamy on the adequacy of organisation of the WTO itself. He felt that there was considerable room for improvement. For example, he felt that the director-general who is:
should have more authority and greater status. It seems to me that Pascal Lamy would be an excellent candidate to be the next director-general. The future structure of the WTO is being considered by a WTO consultative committee under the leadership of Peter Sutherland, who was also one of our witnesses, but it has yet to report. We await the report with interest.
Our report and its recommendations have been well covered by the noble Lord, Lord Radice. As I said, the post-Cancun clouds that surrounded our deliberations were blown away at the council meeting in July and the Doha round is now back on track. Pascal Lamy has passed the torch to Peter Mandelson and we will watch with great interest how Peter Mandelson takes negotiations through to the next stage.
Lord Lea of Crondall: My Lords, I was a member of Sub-Committee A when it made its first report on the collapse of the Seattle meeting of the WTO in November 1999. We produced a report on it in June 2000. It may be said that some of the analysis is rather similar but the plates, tectonic or otherwise, have been moving and it is useful to make that five-year comparison.
Before doing so, I would also like to congratulate the noble Lord, Lord Vallance, on his excellent maiden speech and take the opportunity of saying that I am a member of the Parliament Choir, which BP supports. Putting the Parliament Choir on the permanent London choir scene has been very much appreciated. In this House, he will find that all-party groups—including that for ski-ing, which masquerades as the United Kingdom All-Party Group on Switzerland, and other similar groups—are worth investigating.
The noble Lord made another point that I wish to pick up. Everyone says that parking the Singapore issues is a good idea. I am not so sure. I think that trade is now a subset of investment in a way that has not been recognised in this debate or in the report. The proportion of world trade in and out of Africa has fallen from 5 per cent to 2 per cent. Foreign direct investment into Africa has fallen to 1 per cent of the world's FDI, and Africa has 10 per cent of the world's population.
The great engine of growth and the biggest changes in India, China and Brazil are to do with domestic generated savings becoming profitable investments but also because multinational corporations want to be there. In the case of BT, the great debate in which some of my trade union colleagues have been involved about offshoring and globalisation are relevant. As a former trade union official who still has close links with the trade unions, I believe that one has to have more joint information and consultation bodies in the global corporations. That will remove at least some of the cultural misunderstandings that can arise when
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people in totally different situations say that they are not accepting something without figuring out where the possible benefits may go. The benefits have to be shared.
I recently chaired a conference for the IPU with the UK's oil and gas companies operating in Bolivia, the second biggest field in Latin America and worth 500 billion dollars. The difficulty that the multinationals have in going to the Altiplano and laying gas pipes anywhere near where people live in conditions of very great poverty is a challenge. We have to follow the audit trail and follow the flow of funds. In that regard, there is also a connection between the dismal performance of some parts of the world in getting FDI and their performance on governance, rule of law, and so on.
As vice-chairman of the Africa All-Party Parliamentary Group, I may have got this a bit out of perspective, but one tends to get bees in one's bonnet. I think that this is central to the next 10 years. Clearly, it would now be correct to say that we have to put Doha to bed, without Singapore, which is short for the wider rules governing direct investment.
I was a member of the United Nations Commission on Transnational Corporations from 1975 to 1979. As the trade union member, I went to New York four times a year. We nearly drew up a world code of practice—a world set of rules—on the operation of multinational corporations. The code was eventually blocked by Moscow and Washington together. Moscow could not swallow the idea that a global corporation was a viable concept. Washington's position would now be called unilateralism versus multilateralism: why should they, as the most powerful country in the world, the imperial leader, agree? Unilateralism was good enough for everyone else, surely. That approach is now more explicit in the Bush doctrine, but I think it has always been lurking around in Washington.
On the five-year comparison, I have noticed a trend over the past five years regarding how we have viewed the debate about regionalism. Regionalism can take the form of the European Union, Mercosur or the African Union, and I should like to mention the different sort of animals there. But it is all very mixed up in people's thinking and it can also take the form of sub-optimal deals between particular advanced blocs and other LDC blocs. That is a slightly different question.
We must increase the negotiating competence of LDCs, the best examples of which are in Latin America and Africa. There must be an enormous connection between the negotiating competence of African Union countries and their competence in other matters such as security, and standards of accountancy, prisons and governance. It sounds ambitious, perhaps ludicrously so, but a bigger, holistic agenda is needed. At the same time, we must narrow the agenda in the immediate future. However, those questions can be properly addressed only on a broad canvas.
I wish to speak about China and the sort of animal that it is. A couple of years ago I gave a lecture at a trade union conference in Bangalore. People there were beginning to realise that it was in their interests to
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have investment policies that were open to the rest of the world. Trade unions wanted to have more links. They were beginning to ask, if they did not consider how those changes related to their own freedom of association and the role of workers' organisations, what would be their solution when China started to become the big world leader.
That is the question that we are looking at today. I do not know the answer, but there are interesting cases. Let us take, for example, the explosion in textile export rates from China. Many poorer countries, such as Mauritius, have built up a textile industry on the basis of quotas from the USA and Europe; therefore they cannot withstand the competitive onslaught from China. China's share of the 350 billion dollar global trade in textiles could more than double, from 25 per cent to 50 per cent, once quotas are eliminated. But many smaller producers in Asia, the Caribbean and Africa fear extinction, with the loss of 28 million jobs.
The question of how to think through the negotiating leverage of groups of less developed countries is urgent; otherwise, there will be further polarisation of investment. There will be investment in Africa only once there is confidence that sustainability is possible. That is why perhaps we should help to build sustainability. If it comes from the European Union, it will not be perceived as neo-colonialism as easily as it would if it came only from Britain and France or from the multinational companies.
The key word must be "transparency". It is an overworked word; however, in the past 10 years, 500 billion dollars have disappeared in Nigeria without an audit trail. Is it not partly the responsibility of corporations, as well as the result of corruption in Nigeria? I am sure that such questions will become more central to the agenda for transparency of TNCs as we proceed.
I agree with the remarks of the noble Lord, Lord Cobbold, about Pascal Lamy. Lamy's comments on the management structure and negotiating procedures of the WTO were spot on. I have been an admirer—a friend, in some ways—of Pascal Lamy since the 1970s, when we worked with Jacques Delors on a report on economic and social concepts in the European Union. He is very French, yet very different from the stereotypical Frenchman when it comes to world trade. The commitment to a significant reduction in the agricultural share of the EU budget is clearly there. I agree with the noble Lord, Lord Cobbold, that he would make an excellent successor as the director-general.
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