Trade Liberalisation

Oral Answers to Questions — Trade and Industry – in the House of Commons at 11:30 am on 1st May 2003.

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Photo of Nick Gibb Nick Gibb Conservative, Bognor Regis and Littlehampton 11:30 am, 1st May 2003

If she will make a statement on the latest developments in the Doha round of talks on trade liberalisation.

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry

Since we launched the Doha development round in November 2001, progress has not been as fast as it should have been. In particular, we still have to conclude an agreement on trade-related aspects of intellectual property rights and access to medicines, and far more progress needs to be made on agriculture.

In other areas, however, progress has been more encouraging. The European Union submitted its general agreement on trade in services offer to liberalise trade in services earlier this week, and detailed negotiations are continuing on non-agricultural market access in the hope of reaching an agreement on the scope of negotiations by the end of May.

Photo of Nick Gibb Nick Gibb Conservative, Bognor Regis and Littlehampton

I am grateful to the Secretary of State for that honest answer. Does she agree that the Stuart Harbison Doha round proposals to phase out export subsidies would bring worldwide gains of about $100 billion a year, which would be especially helpful for third world countries? Was she therefore surprised and concerned that the French Minister, Hervé Gaymard, said in a speech last month that he is

"profoundly opposed to such a course of action and . . . channelling all . . . efforts into . . . making this fail"?

Will she assure us that she will resist any attempt by the French to scupper such an important humanitarian proposal for trade liberalisation?

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry

I entirely agree with the hon. Gentleman. The gains to the developing world and to the world as whole—including the developed world—from a successful trade round will be enormous at this time of economic downturn. It is important to succeed in the round and to demonstrate that we have made progress by the time of the mid-term ministerial in Cancun in September. The hon. Gentleman will also be interested by President Chirac's recent proposals on preferential treatment for countries in sub-Saharan Africa. We welcome the fact that his statement recognised the enormous damage caused to farmers in developing countries by export subsidies on agricultural products.

I hope that the French Government will support the process of reforming the common agricultural policy because that will be essential if we are to make a better proposal in the Doha round.

Photo of John Cryer John Cryer Labour, Hornchurch

Where is the evidence that liberalisation and privatisation benefits third world countries? Surely the examples of Rwanda and Tanzania a few years ago and the recent failed attempt to privatise water in the third world tell us something about the sins of over-enthusiastic neo-liberalism.

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry

Nothing in World Trade Organisation rules or the general agreement on trade in services requires either developing or developed countries to privatise any of their public services, including water. Indeed, the GATS offer that the EU has just published explicitly excludes our public services and public utilities. Attempts to privatise water in developing countries had nothing whatsoever to do with GATS or the WTO.

Although I agree with my hon. Friend that it is extremely important to get the phasing of market opening in developing countries right and to accompany that with appropriate measures for governance and effective regulation, we only have to compare the experience of African countries with that of many countries in south-east Asia over the past 30 years to appreciate how trade in a more liberal world economy that can be made fair as well as free benefits poor people in poor countries.

Photo of Vincent Cable Vincent Cable Shadow Spokesperson (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry)

Does the Secretary of State agree that what would have been difficult negotiations will be made more difficult by the rifts between the United States and some countries in western Europe? Does she agree that the best position for a free-trading country such as the United Kingdom to adopt is to be even-handed in criticising and condemning both the totally unacceptable protectionist interests in Europe that have prevented the EU from making a meaningful offer on agriculture and, equally, the aggressive unilateralism of the US that is manifested in its illegal action on steel and its continued refusal to put the developing world's wider interests in medical technology before the interests of its pharmaceutical companies?

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry

The hon. Gentleman may remember that when the United States imposed tariffs last year on steel imports, including those from the United Kingdom, I condemned them roundly in the House and outside it. The steel tariffs are clearly unlawful under World Trade Organisation rules and I hope very much that the American Administration—I have said this to them privately—will not appeal against the ruling that found the tariffs contrary to WTO rules but will instead remove them at the earliest opportunity.

If I may, I shall send the hon. Gentleman a copy of my recent speech in Brussels setting out precisely the Government's views on the need to create a framework of rules for trade that is fair as well as free and tackling the highly damaging protectionism in Europe, especially in relation to agriculture, and in the United States, where it has arisen in relation to steel.

Photo of Ms Linda Perham Ms Linda Perham Labour, Ilford North

Does my right hon. Friend agree that progress on the Doha round depends on the trade rules, in particular the special and differential treatment rule and the multilateral rules framework, and that that will assist investment and competition? We cannot leave it all up to negotiations at Cancun. We must assist developing countries or we will lose the opportunity that we now have.

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry

I agree with my hon. Friend. One of the things that we have discussed in great detail with the developing countries is the issue of special and differential treatment to ensure that the new round reflects the different stages of development that different countries have reached. The House will recognise that if we can make the necessary progress in the Doha negotiations, we will not only give a much needed boost to the world economy, but hold out hope to developing countries, which more than anything else want to earn and trade their way out of poverty rather than being trapped in dependence on aid.