Examination of Witnesses (Questions 20-32)
Mr Gareth Thomas, Ms Rosalind McCarthy-Ward and Mr
Fergus Harradence
16 OCTOBER 2007
Q20 Chairman: Can I turn the questioning
on to Trade Defence Instruments—it is the other half of
the coin, is it not?
Mr Thomas: Indeed.
Q21 Chairman: What is the government's
position on the possible reform of the European Union policy on
Trade Defence Instruments? What changes, if any, would we want
made?
Mr Thomas: We are seeking agreement in three
broad areas. The first is that we want to see much more transparency,
predictability about the Trade Defence regime, so just to give
one small example we want to see the agendas for the Anti-Dumping
Committee published so that businesses can know when they are
being considered in terms of dumping or not. Secondly, we think
we need to see more balance in how the Community interest is described.
Of course thinking about the needs of producers is very strongly
in the mix in terms of Community interest at the moment; but we
should think about the needs of consumers in the European Union
too; the needs of retailers as well. Then the third broad area
where we want to see progress is a recognition that many EU businesses
have embraced globalisation and have much more complex supply
chains than was the norm 10 years ago, and as a result the Trade
Defence Instruments available to the European Union need to be
changed, nuanced to reflect that new reality.
Chairman: Thank you. Lord Cobbold.
Q22 Lord Cobbold: On the question
of China and given the size and huge potential growth of the Chinese
market, is the government confident that they will be able to
negotiate appropriate agreements between the EU and China in terms
of anti-dumping? Is that going to be a growing problem?
Mr Thomas: I do not know about the idea that
it is going to be a growing problem. I think we are going to see
increasing trade from China and that is going to pose problems
for some business interests, there is absolutely no doubt about
that, as they have to deal with the extra competition. It also
potentially means that domestic manufacturers will be able to
source component parts more cheaply and the consumers will benefit
from the increased investment and the increased trade too. So
I do not see increasing trade from China as necessarily a negative
thing, quite the opposite.
Q23 Lord Cobbold: It is very important
that it should be positive then?
Mr Thomas: It is very important it should be
positive. Obviously, as with trade from any country and indeed
trade within countries you want to make sure those standards are
held—phytosanitary standards, etcetera—and we expect
companies that trade into the UK to meet those standards. We have
an enforcement regime to deal with the cases where that does not
happen and we see that continuing. The problems around toy safety,
for example, have been well publicised, but it was actually the
company concerned that admitted responsibility for it and not
an issue of the particular country where those toys were coming
from.
Q24 Chairman: I was wondering more
about the issue of I think it is Siemens who are importing parts,
which have been manufactured below cost, there is no question,
and it is a German company. Are people not supposed to do that?
Mr Thomas: As I say, in terms of trade defence
review we have said that we need to see a more nuanced understanding
now of how companies source the goods that they produce. We are
waiting now to see the results of that trade defence review. The
College of Commissioners are expected to have their first debate
in the next week and we expect the document to be published around
about 20 November. So we will have a sense then, I think, of just
how much the principles that we want to see incorporated into
the new trade defence regime have been secured.
Chairman: Most interesting. Lord Jordan.
Q25 Lord Jordan: Further on this,
is the EU negotiating with China individually or are they under
the ASEAN umbrella, and is Britain free to trade a separate bilateral
agreement?
Mr Thomas: Just in terms of the negotiations,
we have had a series of conversations with China ourselves, but
they are not in the ASEAN negotiations so we would expect the
European Commissioner to lead in the discussions with China. So
Peter Mandelson, for example, on the so-called "bra wars",
the concerns about large imports of textiles, for example, has
been leading the discussions with his counterpart in China and
reporting back to the European Council in terms of the trade ministers,
and we then hope to influence the negotiating stance that he takes.
But we would see him taking the lead on this. We have agreed that
the Commission should have competence for trade and we therefore
look to him to show leadership. However, we will obviously seek
to influence his negotiating position.
Q26 Lord Cobbold: And the Chinese
are being cooperative and wanting a solution?
Mr Thomas: The Chinese are being cooperative
and do want a solution. We agreed with the Chinese back in 2005
on the imposition of quotas. We do not want to see those quotas
continue but we have agreed that there should be monitoring for
12 months so that we can see what happens. But, yes, the Chinese
are being cooperative; they do want to find a solution.
Q27 Chairman: This most useful session
has left me with a couple of more general questions just before
I invite my colleagues to ask any questions that they have left
over. Of course, professionally, you are taking an optimistic
view of the possible outcome of the Doha Round, as we all must,
and I commend us for it. But there is always the question of what
is the difference between what we all think should happen and
what we all think is actually going to happen. Do you think it
is possible that we would end up concluding a Doha round which
did not do an enormous amount of good to the poorest countries;
that it would indeed be a Multilateral Agreement but it would
not do an enormous amount of good to the poorer countries. Or
do you think it more likely that the Multilateral Agreement will
just collapse?
Mr Thomas: I think there is all to play for,
Baroness Cohen. As I said, I think there is momentum within Geneva.
I think the big players within the G4 are engaging very seriously
in the discussions. There is no question that the African group
and the Least Developed Countries group see the Doha Round negotiations
as very important for them and look to countries like the UK to
show leadership in support of their interests, and that is indeed
what we are seeking and what we have been seeking to do. We have
helped to fund some of the organisations that have carried out
for the LDCs and African groups. We have held a whole series of
conversations with key LDC negotiators and African negotiators
to make sure that we have properly understood their negotiating
needs and their position to feed into the European Union's negotiating
stance and generally to feed into the Geneva process. What was
agreed in Hong Kong is still on the table and would bring benefits
for developing countries, but we think we should be more ambitious
and that is why, for example, we push not just to accept the 97%
of duty and quota free access, but to try and get a timescale
for it to get to 100% of duty and quota free access.
Q28 Chairman: If all this is managed,
because it is for the EU negotiators, is our worst fear that the
US Congress will unpick it all? Rather, why do we believe that
they will not, given the known United States difficulties and
particularly with their agricultural producers?
Mr Thomas: I think what is interesting is that
the White House is very engaged in the discussions.
Q29 Chairman: This White House?
Mr Thomas: This White House is very engaged
in the discussions. We have held a series of conversations with
people on the Hill from both parties and obviously we are aware
of the political dynamic in the United States at the moment. But
despite that I still remain optimistic that we can conclude a
round and that the results of that round would get through Congress,
but there is a long way to go before we get to that point. The
key moment now is to try and get agreement between the key players
on the modalities, on the exchange rate between the key issues
in terms of agricultural market access, subsidies and the NAMA
negotiations, and that is the particular discussion underway at
the moment, that is where the energy is and that is where we are
focusing our attention, albeit we are conscious of that backdrop
that will eventually come into play.
Chairman: Thank you very much, Minister.
Colleagues, have I managed not to ask all the questions? Do colleagues
have another piece of illumination they would like?
Q30 Lord Steinberg: Minister, you
said you were optimistic that the process will be successful yet
you have also used phrases like "there is a very long way
to go", which you used particularly with the United States.
Is it not always the case that when these agreements are being
discussed that the weakest countries do always—not occasionally
but always—come off worst? And is it not the case that when
our government and other governments attempted to deal with the
African problems of financing that although superficially it appeared
that it was successful in their refund, the truth of the matter
is that those countries are no better off?
Mr Thomas: Lord Steinberg, I do not think that
will be the case in this round of negotiations. What has already
been negotiated, for example, as I have described in answers to
earlier questions, the agreement to offer 97% of access by way
of duty and quota free access into developed countries' markets
is significant. It does represent progress. It does not represent
as much progress yet as we would like; we want a timescale for
100% and we still think there is an opportunity to push for that
over the coming weeks. I say that there is a long way to go because
there is a long way to go before the round is concluded, the negotiations
are agreed and then ratification takes place. But I am optimistic
that we can secure a round. All the key players have confirmed
in conversations which the Prime Minister has had, which the Secretaries
of State for Development and for Business and Enterprise had,
and indeed that I have had, that they do want to see the Doha
Round concluded and the development dimension in particular respected
by way of results from the round. I am not going to downplay to
you, we are not there yet in terms of having that agreement; there
is still some way to go before we can be completely certain that
we are going to get the Round that we want.
Q31 Lord Steinberg: Part of my question
concerns that the weakest countries, particularly the African
countries, which we all agree are principally the weakest countries,
always come off worse. Do you agree that that has been the case
up until the present time?
Mr Thomas: I do not agree that that is the case.
I think there are many reasons why Africa's share of world trade
has declined. There are issues around government in those countries,
for example, being a particular factor. We are very clear that
we want to make sure that Africa's share of world trade does increase
and obviously making sure that increased market access is available
when African countries are in a position to exploit those opportunities
is a key objective for us from these negotiations, and that is
why we have been putting as much time and effort as we have been
into understanding what the least developed country group and
indeed the African group have wanted to focus on.
Q32 Lord Steinberg: My very last
point. You used the word "when"; how long is "when"?
Mr Thomas: I do not know is the really honest
answer to that question. I said right at the beginning in answer
to Baroness Cohen's first question that we are at a critical moment
in terms of the negotiations because of the approaching American
presidential elections, and we do need agreement on the key headline
parts of that deal soon if we are to get agreement before those
elections take place. I am still optimistic that we can do it.
Chairman: Thank you very much for a most clear exposition
of where we are. We shall be conducting an inquiry into this and
hopefully we will be able to ask you in a few months' time to
come and tell us again where we have got to because there will
have been progress. Thank you very much to you and your officials
for coming this morning.
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