Fair Trade

– in the House of Commons at 4:02 pm on 25th June 2003.

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Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means 4:02 pm, 25th June 2003

We now come to the debate on fair terms for international trade. I must advise the House that Mr. Speaker has selected the amendment in the name of the Prime Minister. There will be an eight-minute limit on Back-Bench contributions to the debate.

Photo of Caroline Spelman Caroline Spelman Shadow Minister (Women), Shadow Secretary of State for International Development 4:16 pm, 25th June 2003

I beg to move,

That this House
shares the concern of the Trade Justice Movement about the plight of the poorest people in the world, and congratulates the Movement on bringing their conditions to the attention of the public;
notes with concern the fact that a billion people live on less than a dollar a day, that life expectancy in many African countries is declining, and that 30 million people in Africa have HIV/AIDS;
believes that rising levels of international trade and trade liberalisation offer the best hope of alleviating poverty in the developing world;
calls for high quality legal and economic advice for developing countries on trade issues;
further believes that the Government has failed to do enough to promote trade liberalisation, to reform agricultural subsidies and to phase out European trade barriers;
and further calls on the Government to use the World Trade Organisation meeting at Cancun to do more to reform the international trade rules to give poor countries a fair deal on international trade.

There is a terrible sense of déjà vu in holding this debate on our Opposition day exactly one year after our last such debate. If we look back over the past year, what have the Government really achieved in respect of securing fair terms for international trade? We share the frustration of the Trade Justice Movement that so little progress has been made.

Unlike the Secretary of State for Trade and Industry, who wrote in The Guardian this week that she "fundamentally agrees" with the Trade Justice Movement, I can honestly say that although we share many of the movement's demands, we do not share them all. However, we congratulate it on bringing these issues into the public arena and giving us the chance to debate them openly. I shall be holding a trade justice surgery in my constituency on Friday, and I urge Members to take the opportunity, as I know that many are doing, to meet campaigners.

The case for fair rules of international trade is overwhelming. The United Nations estimates that if trade rules worked for poor countries, they could reap benefits of up to $700 billion a year—14 times the amount that developing countries receive each year in aid, and 30 times the amount that they pay in debt repayments.

One of the best parting shots of the outgoing Secretary of State for International Development was made in her withering analysis of the failure of successive trade talks to make any meaningful progress. In her speech on the dangers to Doha at Chatham house on 25 March, she said that

"failure in the Doha Round of the World Trade talks mean a tragic missed opportunity to tackle the distortions and unfairness in trade rules that disadvantage the poorest producers and the poorest countries."

She also said that

"we missed 2 key development milestones":

on trade-related aspects of intellectual property rights and public health, and on special and differential treatment for developing countries. She described how the discussions in Geneva are stalling, destroying trust between World Trade Organisation members and dissipating their willingness to negotiate.

Yet we are only three months away from the next round of the trade talks, in Cancun this September, with very little progress to show for all the efforts made. The post-11 September spirit of contrite concern for the world's poor, which led to Doha being called a "development round", seems to have given way to vested interest, the old complacencies and the status quo.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

Does my hon. Friend agree that it is doubly disappointing, because since the last Doha round and within Europe, a step has been taken in the wrong direction? The reality is that there are now fewer prospects than ever for the European Union properly to open up its markets to the producers of the third world.

Photo of Caroline Spelman Caroline Spelman Shadow Minister (Women), Shadow Secretary of State for International Development

My hon. Friend is absolutely right, and I shall mention in a few moments the disappointing results of the most recent common agricultural policy negotiations.

Where is the will to change? We hear plenty of rhetoric about "healing the scars of Africa", but we see little improvement. The poorest countries' share of world trade has dropped by almost half since 1981 and is now just 0.4 per cent. There is an air of business as usual about the place. Last Friday's conclusion to the discussion on reforming the CAP was utterly depressing. Despite all the rhetoric about Britain playing a lead role in Europe, the Prime Minister appears to have capitulated before France and Germany to a deal that leaves the CAP substantially unreformed and the level of subsidies uncut until 2013—only two years before the deadline for meeting the millennium development goals. They were targets that we set ourselves to lift people out of poverty, ill health and missed opportunity, and to ensure that no one is left behind. At the European summit last weekend, the Prime Minister returned without, apparently, having raised the issue of the CAP with the French President and with no mention of the importance of CAP reform in the Council's conclusions.

Agriculture is of key importance because three quarters of the world's poor live in rural areas. Agricultural produce is virtually their only source of cash, and developing countries are particularly vulnerable because production tends to be focused on a small number of cash crops. Yet the rich nations of the world regularly destroy opportunities in growth markets by dumping surplus agricultural production with subsidies from taxpayers' money. One of the starkest examples is in India, which, as the world's largest producer of milk, is unable to compete in the growth market of the middle east because of the subsidised exports from, among other places, Europe. It is a shameful comparison that every cow in the European Union is subsidised by $2 a day, while 3 billion of the world's poor live on less than that amount.

Export subsidies are the most iniquitous feature of the CAP and even France is willing to acknowledge their damaging effects, but where is the will to remove them? The CAP does not now even serve our own farmers well. They suffer from exactly the same problem as developing farmers—seeing the middlemen take more and more of the profit on what they produce for diminishing returns at the farm gate.

Photo of Nick Palmer Nick Palmer Labour, Broxtowe

Would the hon. Lady be willing to overcome the roadblock by removing the right of nations to declare it an absolute strategic interest to keep the common agricultural policy? She will be aware that there is a qualified majority in favour of going much further than France is willing to go, but France is declaring the CAP to be a vital national interest. Would the hon. Lady be willing to give that up?

Photo of Caroline Spelman Caroline Spelman Shadow Minister (Women), Shadow Secretary of State for International Development

The hon. Gentleman's intervention reminds me of a similar one last year. The point about using the veto in favour of national interest is that it is so frequently abused, and it is the abuse of national interest that presents the real problem.

Farmers in this country suffer from exactly the same problem as developing farmers in seeing middlemen taking more of their profit. I would go so far as to urge British farmers to join the fair trade campaign and demonstrate real solidarity with the world's poor farmers. Like the Columbian coffee farmer, the East Anglian sugar beet producer would then make common cause to balance the power of the big food retailers and supermarkets. Consumers could buy products marked with the fair trade symbol knowing that, at home or abroad, more of the profit will go to the farmer.

Photo of Andy Reed Andy Reed Labour/Co-operative, Loughborough

Does the hon. Lady agree that not just fair trade but co-operative fair trade makes an enormous difference for farmers? On my recent visit to Ethiopia, I visited a coffee co-operative where the vast majority of the profit made along the entire chain went back to the individual farmers, who received probably four times more than they would get if they just sold their produce to the market. Is that an acceptable approach?

Photo of Caroline Spelman Caroline Spelman Shadow Minister (Women), Shadow Secretary of State for International Development

The hon. Gentleman makes a good point. The co-operative principle, whether abroad or in this country, has been very successful in helping farmers to secure more of the value added to their product and ensuring that their farm gate returns rise. It is certainly a principle that we support.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

My hon. Friend referred to milk and India earlier. Is not it a great shame that this country—for whatever reason, but mainly due to pressure from the European Union—abolished one of the most successful co-operatives of all time, the milk marketing board? Can my hon. Friend assure me that those matters, which have stood British farmers in good stead, will be considered by the Opposition, if not by the Government?

Photo of Caroline Spelman Caroline Spelman Shadow Minister (Women), Shadow Secretary of State for International Development

My hon. Friend makes an important point about a complex and highly competitive international market for dairy produce. It is important to reiterate that we have called for a review of the way in which the present rules governing the dairy industry in this country operate, in view of the intense competition from other large producers, such as New Zealand—the lowest cost producer—and Denmark, to ensure that our farmers are able to compete on fair terms with them.

The European Union is not the only offender. The US Farm Bill, which recently granted an extra $100 billion in farm subsidies, distorts world trade in the same way. On a recent visit to Malawi, I learned that 300,000 Malawian farmers had been persuaded by American companies to grow premium grade tobacco. Once the crop was established, the price was driven down to $1.6 a kilo, compared with the subsidised price received by US domestic farmers of more than $6 a kilo. US farmers produced more, the world price fell, and now the Malawians are out of business.

Cotton subsidies are another example. The price of cotton is at an all-time low and cotton farmers in developing countries are suffering most from the plummeting prices. In the US last year, for example, some 25,000 cotton producers received almost $4 billion in subsidies. That is three times more than the US gave in aid to Africa. Oxfam estimates that Africa is losing $300 million a year as a result of cotton subsidies, and that prices would rise by a quarter if the unfair subsidies were eliminated.

Members of the Trade Justice Movement are not against a rules-based system of international trade, but they want it to be fair—and so do I. They are sceptical about the way in which the World Trade Organisation works, because it appears to favour the rich and powerful nations. Rich countries, especially the US, Japan and Canada, and the European Union, have well-funded teams of specialist negotiators, while half of the poorest countries cannot afford them. For that reason, my right hon. Friend the shadow Chancellor has announced that we would help to create an advocacy fund for developing countries to use to provide themselves with high quality legal and economic advice on trade issues. Let us face it, we are not short of lawyers.

Photo of Tom Watson Tom Watson Labour, West Bromwich East

Can the hon. Lady enlighten us on how big the budget for that fund would be? Would it be greater than the £60 million that was cut from the aid budget in 1995, which was five times more than the annual income of Oxfam for that year?

Photo of Caroline Spelman Caroline Spelman Shadow Minister (Women), Shadow Secretary of State for International Development

I construe from that intervention that the hon. Gentleman does not think that it is a good idea to provide developing countries with equal representation and that he does not believe that rich nations have a shared responsibility to create a level playing field.

Photo of Stephen O'Brien Stephen O'Brien Conservative, Eddisbury

I applaud my hon. Friend's speech and the policy announcement of the advocacy fund, which has been hugely welcomed—not least because it would give developing countries the choice when it came to accessing the appropriate advice to be on terms at the WTO. The Chancellor and other Ministers seek to ensure that they have continued all-party support for many of their international initiatives, so does she agree that it is disappointing that when we seek such support for our policy, the Government remain significantly silent? That shows that they do not care about equal-terms advocacy.

Photo of Caroline Spelman Caroline Spelman Shadow Minister (Women), Shadow Secretary of State for International Development

I thank my hon. Friend for that intervention. As he will know, there is usually a remarkably high level of consensus on the subject of international development. My right hon. and learned Friend the shadow Chancellor has welcomed the increased spending on international development that the Government have announced. Therefore, I too find it disappointing that the practical suggestion set out by my hon. Friend has not been taken up so far. Perhaps the Minister will have an opportunity this afternoon to correct that—or perhaps the Government have something else in mind.

Although the WTO is a relatively new organisation, it must be seen to operate fairly if it is win the trust and confidence of those countries that feel poorly served by it at present. I was rather intrigued by something that the Secretary of State for Trade and Industry said in her article in the The Guardian this week. She said that the Government would create new institutions to deal with unfair trade. Perhaps the Minister will tell the House what she has in mind.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

I thank the hon. Lady for giving way. I welcome the motion before the House, and the spirit in which she is speaking to it. She mentioned trade liberalisation, and the failure to increase the amount of trade in which developing countries can take part. Although supporters of the Trade Justice Movement would accept much of what she has said so far, they also believe that developing countries should have the ability to grow their own economies to the point where they are strong enough to take part in the WTO. What ideas does she have for allowing that to happen and ensuring that trade liberalisation does not mean simply that large multinational companies exploit developing countries?

Photo of Caroline Spelman Caroline Spelman Shadow Minister (Women), Shadow Secretary of State for International Development

I thank the hon. Gentleman for that intervention, but he may not understand the important fact that trade liberalisation has brought benefits to developing countries. I shall be discussing later whether or not, on balance, trade liberalisation has been good for developing countries.

That is an important question. In last week's edition of The Big Issue, an overwhelming case was made for the benefits of trade liberalisation. The magazine set out what globalisation can do to improve the prospects of a developing country by reducing poverty and boosting its economy.

As the UN's development programme has observed, global poverty has declined more in the past 50 years than in the previous 500. In those five decades, there has been substantial trade liberalisation. Indeed, the number of absolute poor—people who live on less than $1 a day—has fallen by 200 million in the past two decades, even though the world's population has grown by 1.5 billion.

Globalisation is a buzz word that anti-capitalist protestors have seized on. They have attacked it as the source of the world's ills, but globalisation—which is capitalism, if Labour Members can screw up their courage to use the word—is what the Government now believe in. Clare Short has said that

"multilateral trade liberalisation is an indispensable part of development."

It is a key driver of economic growth, but—and this may be of interest to Mr. Thomas—it needs to go hand in hand with good governance and effective institutions that channel its power for good.

The world is an unequal place. Resources are not distributed evenly, but it is what Governments do with what they have that makes all the difference. With certain exceptions such as Burma and North Korea, the open-market policies of the Asian continent have brought huge progress. Several African countries with a pro-market approach, such as Botswana, Uganda and Mauritius, have achieved economic growth, but others remain mired in the deepest misery. They suffer from conflict, corruption, sickness and—all too often—from hugely burdensome bureaucracies that hold them back.

Photo of Gary Streeter Gary Streeter Shadow Minister (Foreign and Commonwealth Affairs)

I am grateful to my hon. Friend for giving way, and I am certainly enjoying her excellent speech. Does she agree that in the past 20 years it has been shown that good governance, the rule of law and a market-based economy are the key ingredients to a developing nation becoming prosperous and providing for its people? Does she consider that that ought to be more of a focus for Government policy than is currently the case?

Photo of Caroline Spelman Caroline Spelman Shadow Minister (Women), Shadow Secretary of State for International Development

I thank my hon. Friend for that intervention. He knows the subject well, having preceded me effectively in this post. He is right. India, because it is so populous, is probably the largest of many examples of a nation that realised that it was losing its competitive position and that trade liberalisation would unleash real opportunity. That is one of the best examples with which to encourage other developing nations to take the same steps.

The International Development Act 2002 focused on poverty reduction, which we support. During the scrutiny of that measure, my hon. Friend Mr. Streeter, who spoke for the Opposition, pointed out that we must not lose sight of the importance of fostering good governance—something that was reflected in the words of the right hon. Member for Birmingham, Ladywood. Good governance and effective institutions are essential to help to ensure trade liberalisation. Together, they bring real development and progress in those countries.

Photo of Andrew Robathan Andrew Robathan Shadow Minister (International Development)

The point that my hon. Friend made, backing up our hon. Friend Mr. Streeter, is right and I agree with everything that she has been saying. In essence, the aims of the Trade Justice Movement are pretty good and, in some ways, we can support them. However, when one visits a country such as Angola, as I did last month, and discovers that the president is pocketing $1 billion of oil revenue every year, while our aid programme is but £12 million a year, it puts everything into perspective. Does my hon. Friend agree?

Photo of Caroline Spelman Caroline Spelman Shadow Minister (Women), Shadow Secretary of State for International Development

My hon. Friend touches on an important point. Politicians, whatever our persuasion, represent our electorate and make choices on their behalf. We try to provide leadership on policy, but the bad news stories, such as the one that my hon. Friend highlighted, create much public scepticism about the effective use of taxpayers' money. That is why it is so important to encourage and foster good governance and to stamp out corruption. We can then be confident that our taxpayers' money is being used to maximum effect to help the poorest countries in the world.

I do not want to stand in this place next year bemoaning the lack of progress on international trade reform. As the Prime Minister said, the biggest thing happening in the next six months is world trade: Cancun represents a milepost, yet nothing prevents progress on CAP reform but the selfishness of those who do not want change. Meanwhile, coffee farmers in Ethiopia are dying in their huts and throughout the world people's livelihoods are being ruined.

In his 2001 conference speech, the Prime Minister said that we must practise the free trade that we are so fond of preaching. In this country, we are so tired of his rhetoric that no one believes him any more. People in other countries see little benefit from that rhetoric in their livelihoods. I urge the Government and all hon. Members to seize the opportunity to bring about a fair deal in world trade for our fellow citizens throughout the world.

Photo of Hilary Benn Hilary Benn The Minister of State, Department for International Development 4:38 pm, 25th June 2003

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

"congratulates the Trade Justice Movement on bringing the plight of the poorest people in the world to the attention of the public;
notes with concern the fact that a billion people live on less than a dollar a day, that life expectancy in many African countries is declining, and that 30 million people in Africa have HIV/AIDS;
reaffirms the commitment made in the 2000 White Paper "Eliminating World Poverty: A Challenge for the 21st Century" to improving international trade rules so that they work for all countries, and especially the poorest, in helping to reduce poverty;
notes that the successful pursuit of trade reform through the Doha round of multilateral negotiations could contribute substantially to the Millennium Development Goals;
welcomes the substantial efforts the Government is making to promote trade liberalisation, reform agricultural subsidies and phase out European trade barriers;
believes that significant progress must be made to improve access for developing countries to developed country markets;
further believes that a solution to the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) and public health negotiations is urgently needed;
and welcomes the commitment to ensuring that the Doha round produces real benefits for the poor."

First, I welcome the debate and the Opposition's choice of subject, not least because it gives the House the chance to discuss development and trade in the week of the Trade Justice Movement's lobby of Members of Parliament. Secondly, I offer a warm welcome to the Treasury Bench and to the Department for International Development to the Under-Secretary of State for International Development, my hon. Friend Mr. Thomas, who will reply to the debate. I am sure that I speak for the whole House in wishing him well in his post. My right hon. Friend the Secretary of State for International Development and I already enjoy working with him.

Photo of Caroline Spelman Caroline Spelman Shadow Minister (Women), Shadow Secretary of State for International Development

I was remiss in not welcoming the Under-Secretary to his new post. I am grateful to the Minister for giving me this opportunity to make it clear that I should have done so.

Photo of Hilary Benn Hilary Benn The Minister of State, Department for International Development

While we are in this mood of generosity, may I say that I also welcome a great deal of what the hon. Lady said in her speech? She put with clarity and force the case for fairer trade as a means of helping to encourage development. I say "a great deal" not because I am churlish, but because her argument was at its least convincing when she tried to suggest that the Government are not trying hard enough similarly to make the case that she has put to the House this afternoon. That is not true, and I suspect that she knows that it is not true, not least because my right hon. Friend the Secretary of State for Trade and Industry, who is leading the WTO negotiations, is passionate about the issue and committed to making this a round for development. However, the hon. Lady is absolutely right to ask—this is the question for the House to consider this afternoon—whether, overall, the world is doing enough to deliver a fairer trading system. We are all concerned about whether we will make progress.

The background to the debate—the reason why it matters—is the daily reality of life for the 1.2 billion of our fellow human beings who live in abject poverty and lack the basic necessities that all hon. Members take for granted: clean water to drink, the chance to go to school and someone to heal them when they fall ill. Those people only wish for themselves and their families the things that hon. Members wish for the people whom we represent: the chance to live to a reasonable age, to be part of a community, to raise a family and to earn a living.

Photo of Mr John Taylor Mr John Taylor Conservative, Solihull

I wonder whether the Minister would care to tell the House just how unhelpful he thinks the common agricultural policy is?

Photo of Hilary Benn Hilary Benn The Minister of State, Department for International Development

If the hon. Gentleman will bear with me a moment, I intend to come to that very point, because it is a very important part of the challenge that we face if we are to deliver progress for those 1.2 billion people.

As always in international development debates, it will be common cause across the House that global poverty amid so much plenty in the world is the single greatest challenge that we face. It is morally wrong. It is unjust. It feeds bitterness, division and conflict. All those are reasons why the world community, including the Government and the Opposition parties, are so committed to making poverty reduction one of the main millennium development goals. As the hon. Lady rightly said, they are the goals against which those 1.2 billion people will judge our commitment to making a difference to their lives. That is the issue.

International trade is one of the most important means that we have to try to eliminate global poverty because it is about providing countries with increased opportunities to trade, to provide employment for their citizens and to allow poor people to improve their lives. More exports produce higher economic growth, greater encouragement of domestic reform and, therefore, faster poverty reduction. It is estimated that the increased income for developing countries from a 50 per cent. cut in protection, by developed and developing countries, would be about $150 billion a year—in other words, three times the value of all the aid that rich countries give to the poorer countries of the world.

If the House is weighing in its mind the balance of benefit, making progress on world trade can do more than we in the rich world are seeking to do in the aid that we give. The hon. Lady referred to the World Bank's estimates of the impact that eliminating all barriers to trade in goods would generate. Indeed, the figures that she quoted would have the potential to lift 300 million people out of poverty by 2015.

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Shadow Minister of State (Home Office)

For the poorer countries to benefit from better trade conditions, it is important they all have an equal voice at the table. One of the great criticisms at the last Uruguay round was that 28 countries had no representation at all in Geneva. I wonder whether the Minister would tell us what progress the Government have made towards giving those countries a better voice.

Photo of Hilary Benn Hilary Benn The Minister of State, Department for International Development

The hon. Lady makes an extremely important point. I was going to address that issue later, but I shall do so directly, since she has raised it, and take the opportunity to refer to the importance of improving the capacity of developing countries to participate in the process and of supporting negotiators, as they engage in trade reform. That is why, in the White Paper, "Making Globalisation Work for the Poor", published in 2000, the Government made a pledge to spend £45 million on trade-related capacity building activities between 1998 to 2004. That work is continuing and the funding has supported, among other things, the integrated framework, the Agency for International Trade Information and Development Co-operation and the Advisory Centre on WTO Law in Geneva.

That directly addresses the point raised by Mrs. Spelman in referring to the shadow Chancellor's proposal, because the advisory centre already provides to developing, least-developed and transition countries free or low-cost legal support to those members pursuing cases in the dispute settlement mechanism. It provides seminars on WTO jurisprudence, general legal advice on WTO law and an internship programme for officials. It is working on precisely the issue to which the shadow Chancellor drew attention in his initiative. The only difference is that that work is already being done through the support that we are giving to that body.

Photo of Stephen O'Brien Stephen O'Brien Conservative, Eddisbury

Does the Minister recognise, however, that there is a difference between the advocacy fund proposed by my party and the advisory centre in so far as while the advisory centre makes certain advice available—not least in dispute resolution—the key is negotiating in the trade rounds on equal terms? Under the advocacy fund proposal, developing countries have the choice of the advice rather than being patronisingly offered advice that the west thinks is fit for them, which inevitably builds up resentment.

Photo of Hilary Benn Hilary Benn The Minister of State, Department for International Development

I accept entirely the point that the hon. Gentleman makes about the importance of supporting the development of that kind of independent capacity. That is why, if we look at the development programmes in which the Department for International Development is involved in many countries of the world, building domestic capacity within finance ministries and trade ministries to engage in these debates and to understand what the changes proposed in the WTO may mean for their country and their people is an important part of that work. My point is simply that while I understand the motivation behind the shadow Chancellor's proposals, we already fund support mechanisms internationally, and the issue to which the hon. Gentleman refers is already a central part of the work that we do increasingly with developing countries' Governments. He is right that they need the capacity; the question is what is the most effective way to do it. In truth, as I think that he would accept on reflection, the most effective place in which to build that capacity is in the institutions of government of those countries, allowing them to send their representatives and their Ministers well-armed with arguments to put in the negotiations that will take place.

In recognising the importance of trade in helping to reduce poverty, it is important that we do not overstate the case. Trade alone is not the answer, although it is one very important factor in stimulating economic growth. As the hon. Gentleman rightly pointed out in his intervention, effective states with effective institutions, which implement the right policies such as investment in infrastructure, health and education, are the states that are in the best position to try to benefit from the effects of trade liberalisation. Trade liberalisation and effective governance must go hand in hand, which was a point rightly made by the hon. Member for Meriden. That is why we are so heavily involved as a Government and as a Department in helping African and other developing countries to strengthen their institutions and therefore their capacity to develop economically.

If we accept the argument about the benefits of trade, of course, we should be concerned that the current global trading system does not deliver those promised benefits and does not work for the poor.

Photo of David Heath David Heath Shadow Spokesperson (Home Affairs)

Does the Minister share any of the concerns that some have expressed that by trying to widen the scope of the discussions at Cancun, the Government are effectively ignoring the fact that so many of the commitments from Doha have not yet been implemented?

Photo of Hilary Benn Hilary Benn The Minister of State, Department for International Development

I do not accept that argument, and if the hon. Gentleman will bear with me, I intend to address that point later in my remarks. It is an important point, not least because the Trade Justice Movement has chosen to make it a particular focus of its activities during this week.

The hon. Member for Meriden was right that rich countries' protectionist policies are stopping developing countries from benefiting, which means that the poorest countries in the world have few opportunities to grow and to trade their way out of poverty. That is why the agreement in Doha in November 2001 to try to make this a development round was so important. For the first time, in a significant way, which I think that we all recognise, it put development at the centre of the argument about world trade. That commitment is shared across different Departments—it is not just a commitment for the Department of Trade and Industry or the Department for International Development but for the Foreign and Commonwealth Office, the Treasury and the Department for Environment, Food and Rural Affairs—all of which are committed to making a difference. That is a sign of the importance that we give collectively to poverty reduction and, if I may say so, a reason why the Trade Justice Movement focused the energies of its lobbying campaign elsewhere, which relates to what Mr. Heath said. The movement would acknowledge the force of the Government's argument, which shows why the Opposition's criticism that we are not trying hard enough is wide of the mark.

However, that is not to say that success is assured—it is not. Despite everything at stake, progress during the negotiations has been painfully slow. Critical deadlines have been missed. The issues that matter most to developing countries, which are agriculture, special and differential treatment—I add that to the list that the hon. Member for Meriden gave us—health and trade-related aspects of intellectual property rights, are the key issues on which we as the world community, not as the UK Government, will be judged.

Photo of Gary Streeter Gary Streeter Shadow Minister (Foreign and Commonwealth Affairs)

I think that the Government are doing their best in a difficult situation. It is, of course, outside their power to deliver, and they must do their best, as I am sure that they do. Will the Minister comment on accountability regarding the World Trade Organisation? Does he think that WTO talks are sufficiently well reported back to the House and that Ministers focus sufficiently on the specifics of the talks as they unfold?

Photo of Hilary Benn Hilary Benn The Minister of State, Department for International Development

I recall that my right hon. Friend the Secretary of State for Trade and Industry made a statement to the House before she went to Doha to lay out the objectives that she and other Ministers would pursue. The hon. Gentleman makes a fair point—I think that it was the broader point behind his question—about the need to ensure that the issues are discussed widely so that people from all countries may express their views to their Governments before they go to Doha. He recognises that decisions must be taken by consensus in the end.

I promised that I would turn to agriculture. Agriculture is the most important aspect of the negotiations for most developing countries because it offers the potential of the biggest gains for the world's poor. Liberalisation of agricultural trade could boost developing countries' exports by at least $30 billion a year, and perhaps by as much as $100 billion by 2015. That could lead to an annual increase of gross domestic product of almost 1 per cent. throughout the continent of Africa. Of course, Africa is the continent on which our success or failure to meet the millennium development goals rests because it is the only continent that has gone economically backwards during the past generation. Its share of world trade has halved and half the savings generated leave it each year. It cannot hold on to half the wealth that it manages to create.

Agricultural markets are the most heavily protected, so we urgently need to tackle distortions in global agricultural trade that are created by our high tariff barriers, the current structure of our domestic support regimes and our subsidised exports. That is especially important because it is the aspect on which many of the poorest countries have the greatest natural trading advantage. It explains why the statement made by African Finance Ministers after their meeting in Addis Ababa this month said that they note with concern that Organisation for Economic Co-operation and Development agricultural subsidies have a major and negative impact on the agriculture sector in the majority of their countries. That is the voice of developing countries making the case for change.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

On agriculture and the WTO, the Minister will know that only this week the United States Government decided to pursue a case against the European Union on genetically modified organisms. What is the Government's view of the use of GMOs in developing countries and, especially, of the way in which the US Government subsidise their companies to import and introduce GMOs into those countries, thus giving farmers little choice of whether to grow GM crops or not?

Photo of Hilary Benn Hilary Benn The Minister of State, Department for International Development

The hon. Gentleman raises an important point. The answer to his central question about the policy of Governments is that they should weigh up the same considerations for their countries as we are trying to do in the United Kingdom. Developing countries' Governments should take their own decisions based on their assessment and knowledge of what they think is safe and in the best interest of their countries' future. It is important that they have the power and ability to make those decisions. Others should not make those decisions for them.

Photo of Stephen O'Brien Stephen O'Brien Conservative, Eddisbury

The Minister is generous in giving way a second time. Does he recognise that the removal of the tariff barriers would encourage a greater number of cash crops to be grown, which tend to be commoditised and fall prey to the cyclical nature of commodity prices in global markets? For a number of countries, that has hindered the completion of the heavily indebted poor countries initiative. Does he agree that equal emphasis should be given to value-added manufacturing and distribution instead of having to cede that value chain to the rich western world?

Photo of Hilary Benn Hilary Benn The Minister of State, Department for International Development

I accept the hon. Gentleman's argument completely. Giving developing countries the opportunity, as he put it, to add value from goods that they produce would be a good way of enabling them to participate more effectively, and with greater benefit to their people, in the world trading process.

On reform of the CAP, the negotiations in Brussels resumed today. The deal that was put on the table last Friday is good, but there is a considerable way to go. The Government have always said that they want a good deal, not any deal, and we are determined to get one. That is why we are working hard with our EU partners to secure that change. However, if hon. Members are honest with themselves, they will recognise that the debate on CAP reform has been going on for a quarter of a century or longer. It is a long-term project and we should be aware of the difficulty of making such a change.

Photo of Parmjit Dhanda Parmjit Dhanda Labour, Gloucester

I do not wish to break up the cross-party consensus on many of the issues raised, but does my hon. Friend have a message for Conservative MEPs, who consistently vote with the right in the European Parliament to protect the CAP rather than to reform it?

Photo of Hilary Benn Hilary Benn The Minister of State, Department for International Development

My hon. Friend makes a strong and pertinent point. The basis on which we will be judged as elected representatives—whether as Members of this House or as Members of the European Parliament—is whether by our votes, as well as by our words, we support the objectives raised in the debate, which I think hon. Members on both sides of the House share.

The second key issue is access to medicines. At Doha, we promised to make the World Trade Organisation's rules on intellectual property flexible enough for developing countries that cannot produce the medicines they need to tackle grave health emergencies. We were on the verge of a workable compromise in December last year, but the United States of America, responding to its industry's concerns, has to date blocked the deal. It fears that the proposed solution would be used by developing countries to override patents on what it regards as non-essential medicines.

Those fears have to be addressed. They are not insurmountable. We believe that the December 2002 proposals address those concerns, but it is vital that at Cancun, if not before, we are able to make progress. For many developing countries, progress on trade-related aspects of intellectual property rights—TRIPS—and access to medicines is a litmus test of whether we are serious, as a developed world, about giving them the support and help that they need.

Photo of Hilary Benn Hilary Benn The Minister of State, Department for International Development

If the hon. Gentleman bears with me, I have been generous in giving way and am anxious to conclude my remarks because many hon. Members wish to speak.

The hon. Member for Somerton and Frome mentioned the new issues, which feature prominently in the Trade Justice Movement's lobbying campaign. The Government believe that an appropriate framework agreement on the new issues—investment, competition and the way in which trade is conducted—could help. Competition could be aided by tackling the anti-competitive practices used by big international and domestic cartels. The basic rules on transparent procedure in Government procurement could help to promote good governance and reduce corruption.

As for investment, no one would disagree that it is what developing countries want and need more than anything else if they are to make progress, but let us be clear: the existence of a multilateral agreement of itself would not guarantee that developing countries attract more investment, but it could provide clarity and security for investors on the right terms, thereby playing a part in helping those countries to lift their people out of poverty. Let me make the Government's position clear: we would not sign up to something that we did not believe to be in the interests of developing countries overall.

Photo of Sandra Osborne Sandra Osborne Labour, Ayr

Does my hon. Friend agree that it not just a question of having the capacity to have a place at the table, but is also about having a voice that is listened to so that considered opinions can be heard? Does he acknowledge that many of the developing countries have expressed grave concern about extending the agenda to include new issues if that voice is listened to?

Photo of Hilary Benn Hilary Benn The Minister of State, Department for International Development

I agree entirely about the importance of voices being listened to. If that is to be the case, voices have to be heard, opinions articulated, positions adopted and arguments advanced. As for the World Trade Organisation, the debate has moved on, and we should acknowledge that we hear fewer people saying that the WTO is the cause of all the problems and is an instrument that we should get rid of. Indeed, I noted with great interest the conversion of George Monbiot in his article in The Guardian on 24 June. He said:

"The only thing worse than a world with the wrong international trade rules is a world with no trade rules at all."

That is why his article was headed "I was wrong about trade", and I agree with his argument. Because the WTO is a consensus-based organisation we need to talk up developing countries' capacity to use their power in negotiations, where people give and take but in the end have to reach agreement. We need to talk up their potential power in the WTO to get the agreements that they want. We should not, as sometimes happens in debates in some quarters, although it has not happened today, pat them on the head and say, "It is all rather difficult." I do not believe that that is the case. Developing countries have the capacity and knowledge to use their power. In the end, who is more committed to the future and interests of a country than its people and Government?

Finally, a generation ago, a debate about international development would probably not have included the speech made by the hon. Member for Meriden because it would have focused far more on aid than trade. That shows how all our views have changed in the intervening period. We have learned that while aid still matters enormously—that is why more is needed and why the Government are providing more—the chance to earn a living in the world matters more, as it can deliver more benefits. That is a huge difference between the international debate now and the debate a generation ago. However, we now have chance to make a much more important difference to the lives of the 1.2 billion people who live on less than a dollar a day. History will not judge us kindly if we fail, which is why we owe it to them to succeed.

Photo of Dr Jenny Tonge Dr Jenny Tonge Liberal Democrat, Richmond Park 5:02 pm, 25th June 2003

As I have not yet had an opportunity to do so, may I welcome the bevy of beauty and talent representing international development on the Government Front Bench? However, I am outraged by the fact that the Secretary of State is not in the House of Commons, and is not answerable to the elected representatives of the people of this country.

I congratulate Mrs. Spelman on convincing her party to use the Opposition day for this debate. I know how difficult it can be to convince colleagues that in the long term developing world issues are as important as national issues, if not more important. I congratulate her on her excellent speech, but it is a pity that the Tories' record in government did not match the rhetoric that we have heard this afternoon—[Interruption.] In answer to those sedentary interventions, I would say just give us the chance, and we will show you.

As the hon. Member for Meriden said, this is the second year running that we have had this debate. My constituents have organised a fun event on Saturday and have asked me to take part in a tug-of-war to represent the struggle of poor countries against the rich. While I appreciate how useful my ballast would be on the poor countries' side against the CAP and other evil things, Members will be relieved to hear that I am going to be the referee and will hold the white handkerchief in the middle.

The fact that the debate has become an annual event makes me very angry. The CAP is still unreformed and the world still dances to the tune of the United States of America. Have we no influence at all in the world? Mr. Byers stated in May this year—sadly, after he had stepped down from the Department of Trade and Industry:

"No one should doubt the hugely significant role that international trade could play in tackling poverty. In terms of income, trade has the potential to be far more important than aid or debt relief for developing countries. For example, an increase in Africa's share of world exports by just 1 per cent. could generate . . . five times the total amount of aid received by African countries."

It is a shame that the right hon. Gentleman did not think of that when he was at the DTI.

We have heard some good things from the current Secretary of State for Trade and Industry. In a speech to the European Parliament in January, she said all that had to be said—a beautifully crafted speech. I congratulate the civil servant who crafted it. It was wonderful stuff and said all the right things, but where is the action? Can she deliver?

It is infuriating that the millions of dollars spent on meetings of world leaders at the G8 or the negotiating rounds of the World Trade Organisation, plus all the security costs now involved, would go a huge way to helping the very countries under discussion—the poorest—to have adequate representation to make their voices heard, as several hon. Members have commented this afternoon. I have asked for the figures involved in such meetings of Heads of State and Ministers, and I understand that they will be published on 1 July. They are eagerly awaited by my office.

Photo of Nick Palmer Nick Palmer Labour, Broxtowe

I was unable to get a reply from the official Opposition on whether they would favour the abolition of the rule that European countries can claim absolute national interest to protect the CAP. Would the Liberal Democrats favour abolition of that?

Photo of Dr Jenny Tonge Dr Jenny Tonge Liberal Democrat, Richmond Park

The Liberal Democrats have long called for the reform of the CAP. I will come to that later in my speech, if the hon. Gentleman will be patient.

Once again, here we are rehearsing the arguments, while half the world's population, 3 billion people, live on less than $2 a day, and 1.2 billion—20 per cent. of the world's population—live on less than $1 a day. We must keep reminding ourselves that the global economy allows us to live in great luxury, with even the poorest in our society receiving at least enough to eat, while children all over the world die of starvation and disease. We must never forget them when we discuss debt relief and trade issues.

If we do, poverty and despair will lead to war and terrorism, as Ms King and I saw vividly a couple of weeks ago, and more despair—a vicious circle which, as we have seen in recent years, spills over into attacks on our comfortable way of life. The concrete blocks outside this place and the armed police everywhere in the building are an indirect result of our failure to address the needs of the poorest people in the world, and we must constantly remind ourselves of that.

The trade rules that apply in the world today have caused mayhem all over the third world. Many of us have seen the results. The fall in coffee prices in the early 1990s and our failure to address the problem triggered the Rwandan genocide. Banana farmers all over the Caribbean have to look for an alternative crop because of the USA's determination to protect big boys like Chiquita and Del Monte. That, combined with the US policy to spray Colombian coca fields with herbicides, is likely to encourage Caribbean farmers to turn to the cultivation of illegal crops instead. What sort of progress is that? In the north of Ghana, I saw farmers made destitute because, thanks to the subsidies given to American farmers by their Government, American rice is cheaper than the rice grown in Ghana.

There are many other examples. As the hon. Member for Meriden said, European dairy cows—this is one of the juiciest bits of all—receive a subsidy of $2 a day. That is the daily income of half the world's population. I am tempted to say that I wish I was a cow, but that may produce a response from hon. Members that is not complimentary. What madness this all is. What madness are we indulging in?

American industrial and farm subsidies and the CAP in Europe have to be reformed. They are worth £200 billion a year. It is immoral to expect poor countries to open up their markets to our goods when our exports are so heavily subsidised and when in many cases we erect barriers for their exports to us.

Will the Minister please tell us what concrete progress we can expect? I know that he hopes and believes, but what will he achieve? I am well aware of the anything but arms agreement between the EU and the least developed countries, but sugar, rice and bananas were taken out of that agreement. They are precisely the goods that they could have produced to their advantage. We have seen Mozambique, Zambia and Malawi suffer from that policy. They could produce sugar very cheaply, but they cannot compete with subsidised European crops.

I have said that Liberal Democrats want the CAP reformed, and it must be reformed. What will happen when the EU has 25 states? Will the new European members expect the same subsidies as current members receive for their farmers? I understand that the CAP budget will remain at its current level of £30 billion a year, so it will be spread much more thinly anyway and our farmers will have much less subsidy. Could we hear from some Minister or other just what preparations are being made for that and how we will build in a reduction in subsidies so that farmers in the poorest parts of the world can benefit too?

One issue that particularly concerns me is the ever-festering issue of trade related aspects of intellectual property rights, or in plain language that rule overseen by the World Trade Organisation which means in practice that developing countries cannot use cheaper versions of drugs that they need, such as retrovirals for AIDS, even when they can manufacture them, as in the case of Kenya. The developed countries hold 97 per cent. of world patents and any attempt to relax the rule is being blocked by the USA.

Photo of Mr Richard Allan Mr Richard Allan Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Trade and Industry)

I am glad that both my hon. Friend and the Minister have mentioned TRIPS, which is an important issue within the world trade negotiations. But is she concerned that the trend in intellectual property law in developed countries is towards broadening and deepening the scope of intellectual property protection, so that we may find that people in developing countries are excluded from an even greater range of products that they need if they cannot afford the licence fees to go back to companies in the developed world?

Photo of Dr Jenny Tonge Dr Jenny Tonge Liberal Democrat, Richmond Park

My hon. Friend is right. Despite all the developments in genetics and all the new medical and scientific developments, we are going backwards instead of forwards. Developing countries will be more and more shut out of the developed world if something is not done about this.

I have asked before and I ask again: what representations have we seriously made to the USA on that issue? Why are we not successful? The USA does not want to contribute to the global health fund in substantial amounts, lest any of the preventive health programmes of the global health fund contain measures to provide safe abortion. We all know how it has withdrawn funds from the United Nations Population Fund. On the other hand, it refuses to allow the cheaper generic drugs to be used in developing countries. That allows me to come to the conclusion that the much trumpeted $15 billion to fight AIDS from George Bush, about which we have all heard recently, is a straight contribution to the United States' pharmaceutical companies, because it cannot be spent on very much else. When will the Government challenge the USA about that?

Photo of Mr Brian Cotter Mr Brian Cotter Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson

My hon. Friend mentioned Rwanda and made clear points about the need for cheaper drugs. The case is made in Rwanda, where hundreds of thousands of women and others are dying because of HIV/AIDS. Fortunately, the few Rwandans who have come to this country and received treatment can now live out their lives.

Photo of Dr Jenny Tonge Dr Jenny Tonge Liberal Democrat, Richmond Park

My hon. Friend is right, but we must not think that drugs are the only answer to the AIDS epidemic. Sadly, however much we fight even for generic versions, many developing countries will not have the money to afford those drugs and their economies will suffer as a result. Everyone knows that AIDS attacks the economically active members of the community.

I desperately want to make the point that, before we start to engage in the traditional multinational company bashing and to refer to the wicked, evil drug companies about which we hear so much from NGOs and campaigners, we should ask: is it not time that they were recognised as being able to make a huge contribution to development?

I recently learned of a public-private partnership in Botswana between Merck Sharp Dohme, the Bill and Melinda Gates Foundation and the Botswana Government themselves. I see the hon. Member for Meriden nodding, as she has also heard of the project. Such a partnership is delivering all the prevention measures, education, health care and retroviral drugs that are needed to treat the AIDS epidemic in that country. It is a brilliant public-private partnership between a multinational company and a developing country.

Surely, we can investigate the potential for such initiatives in all sorts of aspects of development. Multinational companies have huge budgets that are bigger than those of many countries. They have expertise in management that can counteract the lack of capacity in developing countries about which we are always hearing. They are also now accepting the need for far more transparency, which would counteract the corruption that Mr. Robathan mentioned, which so often destroys developing countries. Will the Minister tell us what steps are being taken to encourage those very welcome initiatives?

Photo of Nick Palmer Nick Palmer Labour, Broxtowe

The hon. Lady appears to be nearing the end of her speech. Will she be returning to the question whether her party would abolish the national veto on CAP reform?

Photo of Dr Jenny Tonge Dr Jenny Tonge Liberal Democrat, Richmond Park

I repeat that we have called for the reform of the common agricultural policy. I enlarged a little on that issue and I think that the hon. Gentleman should wait until we have debates specifically about the policy, not least so that we can learn what his party and the Opposition will do about it. We do not deny that it is a difficult problem, but it has to be resolved.

One of the best initiatives in recent years, which we must not forget, is the fair trade movement, which started out in the form of fair trade goods in the Oxfam shops and a few bags of coffee here and there, but is now mushrooming into a very interesting development. What do the Government think about the fair trade initiative? Why cannot they take it up and support it much more nationally?

My party acknowledges the progress that the Government have made on debt relief and on increasing the percentage of gross national product that is used for development aid, although the inclusion of debt relief in that figure means that the increase is not as large as it may seem. We acknowledge the Cotonou and anything-but-arms agreements and the recognition that public services, including health, education and water services, should be excluded from the general agreement on trade in services. I use the phrase "should be", as we are told that countries are not being forced to open those markets to external competition unless they wish to do so. We welcome that, but I have some reservations, as I am told that things are not as they seem. I hope that the Minister will address that issue.

Of the least-developed countries, 100 per cent. have had their telecommunications sector requested by the private sector, 24 per cent. have had their environmental sector requested, 69 per cent. have had their financial services sector requested, 59 per cent. have had their transport sector requested, and 3 per cent. have had their energy sector requested. Seventy-two of 109 countries were requested control over water for human use and waste water management. Those are all essential services. In some countries, the relevant sector was effectively controlled by public services and there had been substantial public opposition to privatisation.

We need to know from the Minister just what is the position on public services and the general agreement on trade in services. Liberal Democrat Members want faster progress on trade. By the time of the next conference in Cancun we must have liberalised our markets to allow access to exporters from developing countries. We must radically reform the CAP. We must lift TRIPS—trade-related aspects of intellectual property rights—restrictions on generic drugs.

I have made only three main points, but they are vital. The EU and the USA are running out of time before the Cancun summit to get moving on the issue of subsidies generally. That must be addressed beforehand. If the Doha development round collapses, it will be our fault for not putting more pressure on the USA and the EU. New issues must not be addressed until those main problems are solved, as my hon. Friend Mr. Heath said.

Please let us not have this debate again next year with no progress having been made. Let us get on with it.

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. May I remind the House that the eight-minute limit on Back-Bench speeches begins now. With a fair wind and co-operation, it should be possible for all those seeking to catch my eye to do so.

Photo of Tom Clarke Tom Clarke Labour, Coatbridge and Chryston 5:21 pm, 25th June 2003

The Prime Minister is on record as saying that the biggest thing happening in the next six months is world trade. Therefore, in my necessarily brief speech, in the presence of my distinguished colleagues on the Front Bench, I shall seek to influence a process that has the opportunity of addressing, in the most effective way, the plight of poverty, which afflicts millions of people around the world; to do otherwise would be an irrelevant indulgence.

We inhabit a world that has brought great benefits to the people of our nation and to those of other western European countries, as well as America. However, many of my constituents and local organisations are, I am pleased to say, acutely aware of the consequences of free trade and the impediments, barriers and hurdles to fair trade.

This is not an anti-trade debate, but one that asserts that our trading affairs can be organised so that the benefits go to the many, not to the few, and so that social justice and enlightened self-interest can go hand in hand. I refuse to believe that it is beyond the wit of modern society to protect, and even to improve, the environment that we inherited, underpinned by more equal trading. I am greatly encouraged by the work of the Trade Justice Movement, including aid agencies such as the Catholic Fund for Overseas Development, Oxfam, the Scottish Catholic International Aid Fund, Christian Aid and many others, all of which will campaign in every constituency in Britain over the next few days.

I welcome this opportunity to contribute because, like so many other hon. Members, I have visited many countries that suffer immense and absolute poverty. Recently, I was in Cameroon, where I met the Minister of Finance, who I think at one point was the ambassador to South Africa. He cited the tremendous problem of falling commodity prices, coupled with his country's attempt to try to compete with subsidised goods, which he regarded as completely impossible. I was also in Rwanda, and following the terrible genocide—and now, happily, the reconciliation—it was a privilege to see Tutsi and Hutu children playing together, but despite the merits of the country's agricultural potential it was extremely disappointing to know that they are not dealing internationally with fair trade.

Recently, I was in Angola, to which reference was made. The country is extremely rich in diamonds and in oil. It is not the fault of the British Government that those resources are not being made available to the people, or that, appallingly, one third of Angolan children die before the age of five.

I have visited some of the shantytowns in Peru, where the young people said the same as my young constituents: they were looking for job opportunities. [Interruption.] They did not find that amusing. Given the lecture we had from Mrs. Spelman, I am somewhat puzzled by her response to what has just been said.

The poverty that we are facing is identifiable. Half the world's people live on less than $2 a day; a billion people are hungry every night; 1.5 billion people never have any clean water; 130 million children never go to school; and 10 million children die every year of preventable childhood diseases, even though, overall, life expectancy is up and infant mortality down.

Last year, Professor Keith Popple of the Southampton institute said that

"the combined wealth of the worlds three richest men is more than the combined wealth of the world's 48 poorest nations".

No wonder CAFOD says:

"Without trade that works for the poor, without an end to the grotesque subsidies and trade barriers that protect producers in the richest countries of the world, all that we have worked for in Jubilee 2000 will be put at risk. Developing countries are not asking for a handout. They want and deserve justice."

Photo of Andy Reed Andy Reed Labour/Co-operative, Loughborough

Does my right hon. Friend agree that it is vital that we maintain the link between debt relief, our aid programme and trade, and that none should be taken in isolation? For example, the collapse in commodity prices, to which he has referred, has led to the HIPC initiative falling into some disarray. Is it not vital that we do not lose the focus on the combination of trade, aid and debt relief, with all being equal in importance?

Photo of Tom Clarke Tom Clarke Labour, Coatbridge and Chryston

I agree absolutely and I am delighted that the Trade Justice Movement also agrees, not least because, rightly, it has been campaigning—and the Government have responded—on issues such as debt, trade, HIPC and the other matters that my hon. Friend rightly raised.

Oxfam research showed that the falling price of coffee in Kenya forced parents to take their children out of school because they could no longer afford the fees. The price fall meant that parents' income more than halved in the space of two years.

Yesterday's The Guardian contained an extremely telling article, which I commend to my friends in the Trade Justice Movement, by George Monbiot[Interruption.] I see that it appeals also to the hon. Member for Meriden. George Monbiot said that he had changed his mind on some of the essential issues—for example, on the role of the World Trade Organisation. I welcome that change of mind. He made it clear that whereas he had argued that our aim should be to remove the influence of the WTO, he now realised that the initiative should be transformed. In telling words, he said:

"The only thing worse than a world with the wrong international trade rules is a world with no trade rules at all."

The challenge to this Parliament, the European Union, the World Bank, the International Monetary Fund and the World Trade Organisation is to put in place a set of rules banishing free trade and replacing it with a genuine level playing field and fair trade. The Cancun conference in September is the next road stop on this almost endless journey, and we are watching all the developments very closely indeed.

My last words are those that have been poignantly expressed by the Trade Justice Movement:

"Trade should be the means by which poor people can lift themselves out of poverty, not the prison that steals their future."

Photo of Tony Baldry Tony Baldry Chair, International Development Committee 5:30 pm, 25th June 2003

The prophet Micah said:

"He has showed you, O man, what is good; and what does the Lord require of you but to do justice, and to love kindness, and to walk humbly with your God?"

We all have an inherent concept of what justice is, and this debate is about trade justice. When the Prime Minister of Ethiopia gave evidence to the Select Committee on International Development, he said that there was a danger that Africa could become the continental ghetto of a globalised world. He said:

"Unless Africa develops, it will spawn all sorts of criminal groups en masse, including drug cartels and terrorists, which will haunt all of us. Unless Africa develops, people will flee not in their thousands but, perhaps, in their tens of thousands and hundreds of thousands, and that will haunt all of us. Unless Africa develops, there will be environmental devastation in the continent and the rest of the world. Unless Africa develops, a large part of humanity will be, in effect, excluded from the global cake and the global cake will be smaller for all of us. Developed countries have, therefore, a stake in Africa's development. It is in their enlightened self-interest to help Africa develop."

Of course, we could replace the word "Africa" with the names of many of the developing countries.

Our world community is interdependent, and we cannot simply have trade rules that are entirely give and take, whereby we ask the developing countries to gain concessions while they keep having to give more. Prime Minister Meles put it to the Committee that

"international trade negotiations are based on bargaining and give and take. We know that whatever the rhetoric might be, those with the bigger bargaining power get what affects their interest more. That is the reality. The poor countries, particularly those in Africa, because their share in global trade is insignificant, have no significant bargaining power. They cannot engage in meaningful give and take."

Many non-governmental organisations gave evidence to the Select Committee. Duncan Green of CAFOD spoke of

"extracting as much as you can get and giving as little as you can. That is not even the free market but a straightforward mercantilist approach to negotiation."

At Cancun, we shall all have to stand back and consider what is in the best interest not of each country but of the global community as a whole. Unless we in the developed world are prepared to make concessions on agricultural support and trade-related aspects of intellectual property rights—TRIPS—we can forget about getting the general agreement on trade in services or "new issues" on to the agenda, because there will be absolutely no interest in the developing world in making any concessions on GATS or new issues. Sadly, we have made almost no progress on agricultural support or TRIPS since the end of 2002.

The International Development Committee has been undertaking an inquiry into the matter, and we went to see Commissioner Fischler. It was a pretty depressing meeting, as I think Mr. Battle, who was also present, will confirm. We got there, sat down, asked the commissioner some questions, and he said, in terms, "Frankly, it is not our responsibility. It is not our fault. The EU is doing everything that we need to do." He said:

"We know that our US friends are asking for more market access, but this more market access is at the cost of developing countries . . . Our agricultural support, on export subsidies, compared with the value of the export, is more or less insignificant . . . We reduce the more trade-distorting elements and partly increase those elements which are not trade distorting. Unfortunately, our American friends have done the opposite, especially with their last Farm Bill. This is where we now have a rather difficult discussion."

In effect, Fischler was saying, "There is nothing for us to do." We then went to Washington to meet representatives of the United States Department of Agriculture. They said, "It is not us, it is you, the European Union, who have got to shift."

Some real political effort needs to be made if we are to achieve a breakthrough. Understandably, that will require genuine political commitment. The attention of many political leaders, including our Prime Minister and President Bush, has understandably been distracted by Iraq and other topics. If I have a criticism and concern, it is that, if any progress is to be made in Cancun, it will require more than an interdepartmental Cabinet sub-committee and the Secretaries of State for Trade and Industry, for International Development, and for Environment, Food and Rural Affairs getting their act together. In terms of agricultural subsidy, some serious political head-banging and sorting out will be required in the EU and the United States. It is appalling to note that, even if we have won any influence in the United States, we have yet to sort out TRIPS.

In his recent statement on the G8 summit, the Prime Minister said:

"We all agreed that a successful outcome to the World Trade Organisation ministerial meeting . . . in September and the successful completion of the development round by 2005 are of central importance. The wealthy nations of the world simply cannot any longer ask the developing world to stand on its own two feet but shut out the very access to our markets that is necessary for it to do so. Reform of the European common agricultural policy will be vital in that regard."—[Hansard, 4 June 2003; Vol. 405, c. 158.]

We would all agree with that. Then, almost a week later, the Prime Minister reported back from the European Council in Thessalonika. Those of us who have been around long enough understood the form of words that were used at the Dispatch Box. In the light of the wordplay between the Prime Minister and my right hon. Friend the Leader of the Opposition, it was clear that, while in Thessalonika, the Prime Minister had not invested any political capital in pushing for reform of the common agricultural policy.

We on the Conservative Benches are far more consensual and kind to the Prime Minister than some of the political sketch writers. In the following day's edition of The Independent, Simon Carr said that the Prime Minister proved that

"he is truly bilingual by speaking with forked tongue . . .

The truth also gets lost in the technical forest. Was it good that common agricultural policy . . . reform was left with the Agricultural Council . . .?

Bearing in mind the proposals will have to go to the Council of Ministers in the end, will the cause of CAP reform be helped or hindered by its current forum of discussion?

Your answer will determine how many peasants starve to death in various country-wide death camps in the Third World. We don't know the answer, we can't know, and given that we have a generalised interest in Third World peasants not starving to death, we don't care. If we did care, Mr Blair would care. If Mr Blair cared, he'd have done something about it years ago."

The real concern is that Ministers have to convince this House and the country that between now and Cancun the Government and the Prime Minister will invest some real political time and effort in talking to President Bush, and in making progress on agricultural reform and TRIPS. If they do not, we will make no progress on the WTO agenda. We do not doubt the good will and commitment of Ministers—

Photo of Ann McKechin Ann McKechin Labour, Glasgow Maryhill 5:38 pm, 25th June 2003

I welcome today's debate on a subject that, sadly, receives very little time in this Chamber; indeed, it would largely be ignored without the tremendous effort of the many people throughout the United Kingdom who support the Trade Justice Movement. Sadly, despite the urgent and pressing need for widespread reform of our own trading policies and a truly development-led settlement, the prospects for a meaningful agreement are currently bleak.

In February, I had the pleasure of being part of the British Inter-Parliamentary Union delegation to the World Trade Organisation parliamentary conference in Geneva. For me, that event symbolised a number of the issues that are blocking real progress. Unfortunately, the United States has withdrawn its membership of the IPU and accordingly did not participate. The US Government have a political philosophy that is generally suspicious of multilateral agreements. They have placed increasing emphasis on securing bilateral agreements where it is clear that they will always hold the upper hand. If the current talks fail, the route back to bilateral negotiations is already being marked out.

Many EU member states appeared defensive about their own policies. In fact, some argued bare-faced that, because of their own economic problems, the developing world would have to wait before the EU could make further concessions on CAP. That is not very comforting for a country the majority of whose population is living on less than a dollar a day. The developing nations were exasperated and hostile about the lack of progress, and the WTO gave every impression of being completely uninterested in engaging in any form of parliamentary scrutiny or accepting criticism for the growing fault lines among member states.

How can we make real progress? As the Minister confirmed this afternoon, it is certainly not in the interest of developing countries to return to a system of bilateral trade agreements in which they will always be the junior player. Under that system, the hope of comprehensive reform of either the CAP or US subsidies will rapidly vanish. A multilateral system should offer the best opportunities for change and development, but, rather than every player hanging on to their vested interests, it needs to operate on a basis of trust and with political will to reach agreed goals.

The current round of negotiations has been termed a "development round", but there is no consensus on how development is defined, or on the process by which the details of that hugely complex group of negotiations is supposed to fit round it. Unlike the International Monetary Fund and the World Bank, the World Trade Organisation has not incorporated the UN millennium development goals as integral to its own doctrines. If development is truly the ultimate objective, rather than just an add-on benefit of reducing trade barriers, the WTO needs to consider a much more radical reform of its own agenda.

The test for a rule or proposal to be considered by the WTO should not be whether it is "trade-distorting", but whether it is "development-distorting". Many less developed countries quite rightly feel that they have been let down badly in previous trade deals. While they agreed to open their doors to our goods and suffered from our subsidised dumping, the richer nations were largely shielded and successfully clung on to their trade barriers. At the same time, the world prices of many basic trade commodities, such as coffee or bananas, have slumped, with disastrous effects on the economies of poor countries. The developing countries are understandably much more reluctant to make any further concessions unless they can achieve significant concessions from the west this time.

There is, frankly, an increasing difficulty in achieving trade-offs in all sectors, and we need to consider whether the present round of negotiations should be the last permanent round, followed by a period of review and consolidation. As yet, there is no formal requirement for the WTO to review its own policies to determine which ones contribute and which detract from the goal of development. Currently, once commitments are made, it is virtually impossible to withdraw from them, however injurious they are to a nation's economic development, without severe penalty.

Given the fractious atmosphere in which the current negotiations have been conducted, there is also a need to examine the scope and mandate of the WTO. There are key world trade issues—including, as I said earlier, primary commodity markets—that the WTO is not seriously concerned about. On the other hand, the WTO has become involved in domestic policy issues, such as intellectual property laws, domestic investment and subsidy policies.

The WTO has evolved trade principles such as non-discrimination, most favoured nation and national treatment, which were correctly derived in the context of trade in goods, but there is no clear evidence or political consensus that the application of those same principles to areas other than trade will lead to positive development outcomes. Just about every developed country, including our own, expanded initially on the basis of special treatment for its own industries and Government procurement. The benefits of investment and procurement liberalisation are not likely to outweigh the disadvantages unless there is sufficient strength within the domestic economy itself and sufficient capacity to regulate foreign investment and adequately to enforce that regulation.

Liberalisation, as the Government to some extent acknowledge, should not be pursued automatically as an end in itself. What is much more important is the quality, timing, sequencing and scope of liberalisation, and how the process is accompanied by other factors. Only last week, African Trade Ministers, meeting in Mauritius, issued a statement that referred to

"the complexity and importance of the Singapore issues".

It also said that the Ministers

"note that WTO members do not have a common understanding on how these issues should be dealt with procedurally or substantively. Taking into account the potential serious implications of these issues to our economies, we call for the process of clarification to continue".

Those are clearly very different views from those held by our own Government and other western countries, but I hope that, instead of forcing that part of the agenda forward now as part of a settlement this year, we will engage with the concerns of the developing world and consider a more appropriate mechanism to deal with those matters in a systematic manner.

I know that our Government, who have taken the lead in so many development matters, will fight hard for a successful outcome at Cancun later this year and I urge them to focus their negotiating priorities on agricultural and non-food tariffs and on reaching agreement on the supply of vital drugs for AIDS, TB and malaria so that we can achieve a better world for future generations.

Photo of Alistair Burt Alistair Burt Conservative, North East Bedfordshire 5:46 pm, 25th June 2003

I warmly welcome this debate, and in particular the introduction by my hon. Friend Mrs. Spelman. She has made a significant contribution to her brief and we appreciate the way in which she moved the motion today. I especially commend my hon. Friend and my right hon. Friend the shadow Chancellor on their work in establishing the advocacy fund. In an atmosphere that can become highly charged, those in developing countries need their own voice. They do not always speak with the same voice, and those organisations that purport to speak for them do not always necessarily say what those in developing countries would wish to say. Sometimes, developing countries have different needs and sometimes they say things that we would not expect them to say, but all their voices are authentic and they deserve to be heard. The advocacy fund will make a significant contribution to that.

I wish to acknowledge the influence of outside bodies on our debate today. Most of us in political parties have bemoaned the fact in recent years that as membership of political parties has fallen, membership of single-interest pressure groups has gone up. Today is a perfect example of why that may be the case. Those in the Trade Justice Movement and the Jubilee Debt Campaign have brought the matter into the public arena with a vigour and determination that make us all think. The debt and fair trade issues that they have raised are familiar to almost all of those who will take part in this debate, but the campaigners have prosecuted those issues with a fervour that has changed the political agenda. The culmination of that in the lobby this weekend will be important to all of us. Most of us will have a chance to speak to the campaigners and I commend my local groups in Sharnbrook and Sandy on the contribution that they have made. I have been in close contact with them during the International Development Committee's current inquiry into fair trade. I wish that same energy could be incorporated into political parties, because we would all benefit if some of those who spent their time on single-issue pressure groups joined us. They might then appreciate the difficult compromises that we have to make on these matters, because they are not all capable of simple solutions.

I also wish to acknowledge the contribution that the Churches have made to the issue. For a long time, those driven by the compassion of Jesus Christ have given their careers and development expertise to developing countries. They have joined those of all faiths and none in that work, and we pay tribute to them. On the back of that work, we have seen a growing disquiet in the Christian community at what has emerged. Our concept of neighbour has widened as the world has grown smaller, and it is in trade justice that the two come together. In the same way that environmentalists tell us that the flapping of a butterfly's wings in Africa can change the climate of a continent half a world away, so we know that there is a direct relationship between those who struggle to escape disease and poverty in one place and ourselves in another. One does not have to believe that there is an absolutely direct link between poverty and terrorism to recognise that those who seek to prey on the vulnerabilities of others find plenty of material in countries where the agony is greatest and the chance of escape most remote.

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

Does the hon. Gentleman agree that our recent visit to South Africa and the black township outside Capetown underlines how massive the problems are and how important today's debate is?

Photo of Alistair Burt Alistair Burt Conservative, North East Bedfordshire

The hon. Gentleman is right. We visited Khayeletsia, a community that did not exist in 1985, but in which 1.2 million people now live in shanty conditions. The South African Government are doing their best to cope with those conditions and to make changes, but the scale of the poverty—which we see only from time to time, when we visit—is very great. If it were suffered by our constituents, whose voices we hear every day, the patience and equanimity with which we debate these matters in this place would disappear. I have travelled to South Africa several times with the hon. Gentleman—I want to call him my hon. Friend—and he makes his point very well.

There is an imperative on us to translate compassion into something rather different. As Mr. Clarke said, we know that we are not responsible for everything. The causes of world poverty are complex and the ways to escape from it are even more complex, but there are things that we can do. What would the people who live in the remote parts of the world that we visit make of what we say in this debate and, more crucially, of what we are going to do?

If agriculture is the key to releasing the poverty-stricken world into better conditions, we must look aghast at the state of negotiations under the Doha agenda. The declared aim was that those negotiations would be a development round, and nations mouthed their support for development for the poorest nations, but at the same time big decisions were being made in capital cities that went directly against the spirit of the Doha agenda.

When the US passed its Farm Act 2002, it changed its financial support for agriculture. According to a document from the House of Commons Library, the Act

"is expected to increase spending on US farm support by an additional 70 per cent. or $73 billion over the next ten years."

What could $73 billion achieve if it were spread around the world, in some of the places that we have visited and situations that we have encountered?

Photo of John Gummer John Gummer Conservative, Suffolk Coastal

Does my hon. Friend accept also that the direct effect of support for the US cotton industry, for example, negates every penny of aid that the US gives to many African countries, because they are unable to sell their products to the rest of the world?

Photo of Alistair Burt Alistair Burt Conservative, North East Bedfordshire

It is a topsy-turvy world. We seem to be stuck with what people in the medical profession might term a psychotic condition. We can see what needs to be done, but we find that we are unable to do anything about it. That is true at Government level, and among people whom we know well and with whom we are in contact all the time. We can see the problem, but do we have the will to solve it?

At the same time as the 2002 Act was being passed in the US, something similar was happening in the EU. Oxfam reports that, at the Brussels summit of October 2002, Jacques Chirac and Chancellor Schröder

"brokered a deal to maintain a ceiling on agricultural spending until 2013. The deal in effect blocks the prospect of introducing any substantive change in the Common Agricultural Policy . . . until 2006, and will delay any meaningful concessions until at least 2012. Without radical reform of the CAP in the immediate term, the EU will not be able to go that . . . 'extra mile'. The poorest countries in the world cannot afford to wait until the next decade for the richest to reform their agricultural regimes."

And so say all of us.

This has been a brief but excellent debate in terms of the contributions made by colleagues on a vital subject that has risen up the agenda. However, it is hard to escape the sense that we have all been here before. If we faced poverty, hunger, disease, HIV and AIDS on an African scale and if we faced the barriers to trade that might make some difference to those conditions, would we—as I said to Mr. Pike—conduct our debate with such patience and equanimity? Would the capital cities of Washington, Brussels and London be as reasonable in dealing with each other and would they take so much time breaking through a myriad of negotiations before something was done?

In this Chamber, our compassion may be deep but our collective voices, mine included, will count for little unless we see some progress. The world is changing; the inequalities of history are, at last, at our own door. Let the consensus in the House and in the debate come through in the decisions to which we contribute, either directly, through the EU, or through our friends in the United States. In the developing countries that most of us will visit from time, people are listening and they deserve no less than that we translate our voices into action.

Photo of John Battle John Battle Labour, Leeds West 5:56 pm, 25th June 2003

I welcome the title of the debate; it is fresh and new. It is not often that a title of a debate in the House is "Fair Trade". For hundreds of years, we have constantly talked about free trade. The ultimate free traders were the Liberals, when they were in power—hundreds of years ago. For nearly 20 years, we heard nothing but free trade from the neo-Conservatives, the new right. I welcome the fact that we are all fair traders now and that we are campaigning for managed trade. We should be asking: how is trade to be managed and who manages it? If we can find consensus on that in this place, the debate will have moved on significantly and in a helpful way for the 21st century.

When I first worked on development in the 1970s, someone sent me a cartoon. It showed a man holding a teaspoon to a peasant's mouth. On the teaspoon was the word "Aid". The man's other arm was around the peasant's throat, in a stranglehold grip. Emblazoned on his arm was the word "Trade". Sadly, nearly 30 years later, we have hardly moved on enough to realise that the grip on the windpipe is the trade processes that undermine any increases in the aid budget. That Mexican cartoon rings just as true today.

The campaign for increased overseas aid has taken on a new dimension. It has shifted so that it includes a focus on the unfair workings of the trade system. The Trade Justice Movement is to be congratulated on achieving that nationally; it includes many bodies, non-governmental organisations and faith communities, such as CAFOD, Oxfam, the World Development Movement, Christian Aid or the Save the Children Fund. They are all to be congratulated on shifting the focus and on getting across the message that trade relations are as crucial to long-term sustainable development as any aid. There is no trade justice in a world where 800 million go hungry. The trade system is not delivering for the poor. The trade system is unfair; it is weighted in favour of the rich countries and its massive in-built global imbalance is likely to continue unless action is taken to give the poor a break into the system.

It is to the credit of the Government that they recognised the need to tackle unfair trade. In 2001, they published a helpful pamphlet, "Trade matters, eliminating world poverty", which acknowledges that trade can be a force for development, but only if it is fair and works for the whole world, not just for rich countries and—I would add—multinational companies. Central to the Government's development policy is a commitment to the internationally agreed target to halve the proportion of people living in extreme poverty by 2015.

Yes, the Government also have positive targets on basic health care provision and universal access to primary education. Yes, there has been some progress. Yes, there has been a welcome increase in the aid budget, ending a decade of cuts imposed by the Opposition when they were in Government. However, any current analysis of progress towards the millennium development goals shows that, on current trends, there is hardly a cat-in-hell's chance of halving poverty by 2050, never mind by 2015, unless there are radical changes in the trading system and in debt as well.

Tragically, many poor sub-Saharan countries are struggling their way up an overwhelmingly down-moving escalator. The situation is getting worse for most sub-Saharan countries. Take health—some 7 million people still die every year from preventable diseases. Take education—more than 115 million children do not go to school, and 88 countries are nowhere near achieving the targets in education, to give but two examples. So without radical changes in the unfair trade balance, real and welcome increases in the aid budget will make hardly any impact on development.

The preparations for the WTO round in Cancun in September—labelled the development round—have hardly got anywhere so far. They have not heralded much progress. Discussions on agricultural trade reform—a basic building block for any fair trade system—are well behind schedule. There are no signs of progress in dismantling the massive subsidies, which many other hon. Members have mentioned, that go to American and European agricultural production. The American Farm Bill and the European Union common agricultural policy subsidies are being reinforced and strengthened, rather than being dismantled.

Yes, to our credit, the Government are pressing for genuine CAP reform, dismantling those subsidies that keep developing countries' products out of Europe. In practice, those subsidies are generating a huge system of agricultural dumping. That dumping is occasionally dressed up under the heading of food aid or other aid, but it ensures that agriculture in poor countries has no real chance of getting off the ground. In effect, it is being killed off by dumping. EU Tomato paste is sold cheaply in Ghana and subsidised EU dried milk powder is destroying the Jamaican Dairy Farmers Federation, to give two practical examples.

While we press for CAP reform, let us not press on developing countries methods of change that we have not adopted in the past. Let us not say, "Do as we say, but not as we did." Let us not say, "You liberalise, while we continue to subsidise." I shall give a quotation from the US-based National Law Centre for Inter-American Free Trade:

"The historical record in the industrialised countries which began as developing countries demonstrates that intellectual property protection has been one of the most powerful instruments for economic development, export growth and the diffusion of new technologies."

That is classic, so let us not ask developing countries to move faster than they can. They need managed trade, but in the context of what they can achieve; otherwise, in the words of one great writer on these matters, we are simply "kicking away the ladder" and leaving developing countries with no chance at all.

Finally, I recommend the Chancellor's International Finance Facility. That is the way to get investment into the developing countries quickly, effectively and for the longer term, rather than by being jumped into a new framework. My hon. Friend the Minister referred to "an appropriate framework", but let us take up the Chancellor's proposal on the international finance facility as one means to put in more investment quickly. Perhaps the WTO could take a leaf out of this debate. I close with this remark: as well as adopting the millennium development goals—getting into line on development would cost the WTO nothing—why does it not change its name? Instead of being the World Trade Organisation, why does it not call itself the fair trade organisation? In the meantime, we have much work to do—

Photo of Andrew Rosindell Andrew Rosindell Conservative, Romford 6:04 pm, 25th June 2003

The issue of trade justice is of immense interest to the constituents of all Members, and this weekend I will participate in local events in my constituency of Romford. That is demonstrated by the fact that our mailbags have been full of letters and post cards in the last few weeks highlighting the issue. I congratulate my hon. Friend Mrs. Spelman on ensuring that this important topic is debated on the Floor of the House today.

The aims of the Trade Justice Movement of eradicating world poverty, protecting the environment and assisting developing economies in their development are noble ones, which have the support of most if not all Members of the House. It is how that can be achieved, however, which is most important, and that is something that the trade justice campaign must review. The path from third world economy to first world economy must not involve endless intervention, regulation and international rulings. Those may provide short-term fixes but could also lead to dependency and the creation of false, unsustainable markets in the long term.

The first of the main demands by the Trade Justice Movement, as found in its literature, reads:

"stop forcing poor countries to open their markets".

While I acknowledge the worth of its work, I must disagree with it on certain things, and that particular point is pure fantasy. All that it will achieve is the creation of mini fortress economies, and worse still, it presumes that developing economies do not want to trade internationally. I believe that they do, and that they need to do so. The real world does not work like that. Treating developing economies as if they are somehow exceptions to the rule will help no one.

Photo of Andrew Rosindell Andrew Rosindell Conservative, Romford

In a moment.

Surely the best way forward would be to implement strategies that leave poorer economies free to develop in the most appropriate manner, given their individual nature, resources and circumstances. Countries must be left free of interference and free from those who would rather spoon-feed developing economies than prepare them for true international competition.

The next trade justice aim is to "regulate big business", which is the kind of typically socialistic reaction that presumes that politicians and officials know best. Even this Government have ditched that outdated view. If we regulate, we stifle and, in turn, will stunt growth. That is simple economics. Big business will not respond to new regulation in the manner anticipated by the anti-globalisation movement.

Photo of Andrew Rosindell Andrew Rosindell Conservative, Romford

In a moment.

It will not suddenly be a case of multinationals giving the third world a big hug and paying double for the produce. Regulations and barriers in the market drag everyone down. In the long term, that will include third world producers.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

The hon. Gentleman is in danger of doing a gross injustice to the Trade Justice Movement in confusing it with the anti-globalisation campaigners. One of the things that he must recognise is that the Trade Justice Movement has accepted, and welcomes the fact, that there should be international laws and regulations on trade, and wants to work within the WTO, but requests simply that individual countries, as he has said, should be free of interference and should be able to join in world trade as they think is best for their economies. Surely, if we are to look after the poorest people in the world, that is only right and proper.

Photo of Andrew Rosindell Andrew Rosindell Conservative, Romford

I accept what the hon. Gentleman says, which is why I have not said that I oppose what the Trade Justice Movement is trying to do. I simply said that it should review some of the statements it has issued, which give out the wrong signals.

Photo of John Gummer John Gummer Conservative, Suffolk Coastal

When my hon. Friend comes to talk about multinational companies, however, is it not reasonable to insist that international organisations have the same attitude, for example, to health and safety in Ghana as they do in the United States? Is it not reasonable to insist that such companies should do that?

Photo of Andrew Rosindell Andrew Rosindell Conservative, Romford

It is all a question of balance. Of course, there are examples in which certain rules need to be introduced. No one is suggesting that we should live in a free-for-all world. Trade provides wealth and jobs and gives people opportunities, so we should focus on trade. We should not only impose rules and regulations, because that does not work.

Let me give a few examples of what happens in the real world. The International Monetary Fund and the World Bank estimate that because of restrictions on the trading of textiles and clothing, 20 million potential jobs have not been created. Regulation will not solve that. According to Oxfam, import tariffs cost developing countries about $43 billion a year, and the total cost of all forms of trade barriers rises to more than $100 billion, which is more than double the total amount of development assistance. Again, how will regulation solve that? The European Union common agricultural policy and the recent US Farm Bill force farmers in poor economies to compete against massively subsidised farmers in developed markets. No regulation can solve that, only the liberalisation of trade. I hope that hon. Members will accept that those facts represent the real injustices.

I want a system that rewards success and allows businesses to flourish wherever they are because that leads to the eradication of poverty. That would require the scrapping of subsidies, the abolition of barriers and, hopefully, the slashing of tariffs. The system would embrace free markets and ditch protectionism.

Proof of the success of that lies in countries such as China where the number of rural poor declined from 250 million in 1978 to 34 million in 1999, largely as a result of expanding trade. Similarly, the level of absolute poverty in Vietnam has been cut by half in 10 years. In India, trade policy reform brought about economic growth that led to a reduction of between 5 and 10 per cent. in national poverty rates.

Furthermore, the Centre for International Economic Studies says that if developed countries fully liberalised barriers to imports, such action would generate gains of more than $600 million for Indonesia, more than $2 billion for sub-Saharan Africa, more than $3 billion for India, China and Brazil and more than $14 billion for Latin America.

I urge the Government to use up and coming trade rounds to implement market liberalisation and to help developing economies to help themselves. People in developing countries should be treated as people, not charity cases. Above all, developing countries should be given a truly fair deal.

Photo of Sandra Osborne Sandra Osborne Labour, Ayr 6:12 pm, 25th June 2003

If it is not a contradiction in terms, we have had an enjoyable debate, despite its serious topic. We have heard interesting contributions and although it is slightly unfortunate that the consensus has been broken by Mr. Rosindell, the debate has been welcome.

I welcome the Minister of State's commitment that prioritisation will be given at Cancun to reduce agricultural support for rich countries and to ensure that the world's poorest countries have access to affordable medicines. The Opposition called the debate—I congratulate them on that—at least in part because the Trade Justice Movement's campaign will happen this weekend. I want to raise several of its fears and concerns, especially about decision-making processes in the World Trade Organisation, as I mentioned in my intervention.

I have often heard Ministers say that one of the advantages of the WTO is that decisions are made by consensus—the Minister of State repeated that earlier. We all know that there are official decision-making processes but that outside that pressure may be brought to bear that does not necessarily reflect a consensual approach—the word blackmail springs to mind, if that is not too strong a word. I appreciate that that is a cynical view but it is widely held, especially among my constituents who are involved in the Trade Justice Movement. I shall raise several issues that they highlighted.

The Minister needs to tackle the issues head on so that we can address our constituents' concerns when we meet them this weekend. The Secretary of State for Trade and Industry has acknowledged the deep mistrust felt by developing countries, which believe that the richer nations are once again trying to dictate the terms of economic engagement. However, we have also been told that we began to put all that behind us at Doha and we now have a more transparent process of negotiation. A trade round was launched which, for the first time, put development at the heart of the negotiations.

I applaud the Secretary of State's undertaking not to accept or agree to any trade proposal that would damage the prospects of developing countries trading themselves out of poverty, but, in many ways, it is those countries that she will have to convince. In spite of much talk of consensus, which I would support if it were genuine, severe misgivings have been expressed by many developing countries about expanding the WTO agenda to include what are known as the new issues, not least because, as the Minister of State admitted, little progress has been made on agricultural reform and health care. Most hon. Members have agreed that those should be the priority at Cancun.

I want to specify instances in which dissent has been voiced to the WTO. I know that the Minister will be aware of that dissent, which contradicts the seemingly consensual approach and is cause for concern. In May 2001, a report of the meeting of the G15 summit level group, which now consists of 19 countries, stated:

"The WTO should focus on accomplishing its current work programme rather than entertaining new issues which will create additional obligations on developing countries."

In August 2001, the least developed countries submitted a paper to the WTO asking for the study process to continue. They were not ready to move on to full-scale negotiations on investment, but pressure was brought to bear by the EU to do just that. In September 2001, the Africa group of WTO members released a communiqué stating:

"The Singapore issues" are

"not within WTO competence in developing multilateral rules", and that

"Members are not convinced that negotiation in these areas would deliver benefits to African countries . . . These issues would overload the WTO agenda."

To return to Doha, 29 developing countries explicitly mentioned the new issues in their statements. Some 19 of those opposed their inclusion in the Doha agenda. Only two—the Republic of Korea and Venezuela—spoke in favour. The rest did not express a clear view. That opposition was ignored as the EU pushed ahead with its agenda. So what happened to consensual decision making?

Developing countries continued to express concern as recently as April 2003 at the WTO trade negotiations committee in Geneva when the Africa group and the least developed countries reaffirmed their opposition. The Government know of those concerns, but I have highlighted them because I do not want to tell my constituents not to worry about the developing countries having their place at the negotiating table, where consensus prevails, if that is a cruel deception. I look forward to my hon. Friend's comments on that.

Like Dr. Tonge, I, too, should like the Minister to clarify the position on the general agreement on trade in services. Fears have been expressed that GATS poses a threat to UK public services. The Government's consultation document states that most WTO members are content and that none is challenging the "accepted interpretations" of article 1.3—that public services supplied in the exercise of governmental authority are excluded from GATS. But fears are still being expressed.

I have an active local branch of the World Development Movement. I congratulate it on its good work and look forward to meeting it this weekend. Only last week, however, I attended a local gala where the WDM had a stall. It was festooned with posters saying, "A threat to UK public services by GATS". So if an agreement has been made that poses no threat, someone, somewhere is telling lies. I seek clarification on that so that we can reassure our constituents at the weekend.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion 6:19 pm, 25th June 2003

It is a great pleasure to take part in this debate. I am grateful to the official Opposition for choosing fair trade as a subject for debate, and should like to welcome the new team at the Department. However, I, too, am disappointed that the Minister dealing with these issues is not a member of the Cabinet. There is a great deal of interest in these matters in my constituency, especially among the churches and chapels, which have been driving the agenda forward. It is great to have the opportunity to talk in the House about issues that, unusually, our constituents know more about and are better briefed on than us.

International trade is a bit like a game of Monopoly, except that the developing countries are joining the game halfway through. The developed countries have already bought Bond street, the dice are loaded, and we are asking the developing countries to make do with Old Kent road. Occasionally, they will get out of jail free and will get £200 from the community chest, but they want to play the game by the same rules as us and have the same opportunity to benefit. Some of the scepticism about what will be achieved by the WTO in Cancun derives from the fact that the development round that dates back to Doha and has not been successful. Developing countries wanted it to succeed so that their faith in the WTO would be restored. The Trade Justice Movement, to be fair, has been trying to drive the public agenda forward. When we look at TRIPS—trade-related aspects of intellectual property rights—and the debates on agriculture and special and differential treatment, we notice some sticking points that have held back progress at the WTO.

The Department wrote a joint letter with the Secretary of State for Trade and Industry to all MPs before our debate about the trade justice lobby and said that the delay in agreeing a solution on TRIPS was "regrettable". However, given the AIDS crisis in southern Africa, it is more than regrettable—it is disastrous. The key to helping those countries is in the hands of the developed countries at the WTO, and the problem must be sorted out before Cancun. Opposition, whether from the United States, the pharmaceutical companies or the multi-nationals must be swept aside, as lives are at stake, and nothing is more important than that. Everything else takes second place.

Something else that is holding things back is the question of negotiating capacity. I am grateful to the official Opposition for including in the motion the proposal that there should be more capacity-building within developing countries. I accept what the Minister said, and the Government are to be congratulated on what they have done in the countries themselves. However, especially given the aim of Geneva negotiations, there is a little bit of shutting the stable door after the horse has bolted. There is no point in helping developing countries with their claims and difficulties with agreements if they cannot be empowered to get the agreements right in the first place.

Special and differential treatment must be enhanced further, as it is an acknowledgement by the WTO that developing countries cannot be treated in the same ways as the rich countries. That difference is at the heart of the Trade Justice Movement. We may disagree about the methods needed to achieve fair trade, but the development movement believes that there is a material difference between developed countries and developing countries in their ability to deal with these matters and their starting point for a fair trade agreement. We should recognise that difference in international and multilateral agreements. That is what special and differential treatment means, and it should be strengthened. At Doha, it was agreed that special and differential treatment provisions should be strengthened to make them

"more precise, effective and operational".

In response, the developing countries themselves introduced 85 proposals to make those provisions more precise, effective and operational. The developed countries did not introduce a single proposal along those lines, and the result has been a logjam and no agreement. There must be a significant improvement in that situation.

That is the context in which we need to look at the new issues, particularly investment. I understand why the Government say that they are important and they need to be on the agenda at Cancun. However, as the proposals introduced by developing countries cannot be resolved in the current round, they will doubtless be sceptical when the developed countries propose to include more issues in a series of negotiations that does not seem to be reaching a conclusion.

I have a great deal of sympathy with the proposal from the Trade Justice Movement to sort out the remains of the Doha round and agricultural subsidies, restore faith in the WTO and show that it can work for developing countries and for fair trade. The additional issues must be part of the ongoing march of international trade, but at this stage I doubt whether many developing countries are capable of taking on board the new issues, or are satisfied that they are being treated fairly on other issues.

In an intervention on the Minister, I mentioned GM foods. His reply—that countries must decide for themselves—was helpful. The US Government, of course, do not agree and are using the WTO as a mechanism to drive through their corporate interests in GM foods. We in the EU have argued the

"need for a rigorous regulatory framework" based on environmental, health, animal welfare and ethical grounds. The EU has stated that it

"will always aim at responding to the legitimate interests of its citizens, not to narrow economic interests".

Developing countries should be able to do the same for their citizens. We should not ask for anything less.

My final comments are on liberalisation. I do not share the enthusiasm of some hon. Members for it, because of those loaded dice in the game of Monopoly that I described. Mrs. Spelman mentioned Uganda and Botswana as examples of countries where liberalisation was working. However, Uganda is crippled by a civil war and has diverted 23 per cent. of its expenditure to defence, and in Botswana it is predicted that 31 per cent. of the work force will be lost through AIDS by 2020. Those statistics show that although certain aspects of liberalisation may be working, TRIPS and the WTO need to be adjusted so that those countries can benefit in full.

Liberalisation brings huge challenges, changes and opportunities, but it can also be part of the problem. All I ask is that it should be applied where countries believe they have the capacity to deal with it. We should respect the sovereignty of those countries and their assessment of how their economies can best meet the needs of the poor. We must ask what such measures do for the poorest in those countries, not for us, the richest in the world.

Photo of Colin Challen Colin Challen Labour, Morley and Rothwell 6:27 pm, 25th June 2003

Everybody is in favour of fair trade, from the mightiest corporation such as Rio Tinto Zinc, which proclaims:

"We contribute to sustainable development by helping satisfy global and community needs and aspirations, whether economic, social or environmental", but which was described in The Guardian only this Monday as being ready to despoil a large tract of Madagascar's last remaining rainforest, a challenge to which the company's spokesperson responded with gusto, saying:

"We will keep going no matter what", to the Bush regime, which talks the talk of fair trade, if rather rarely, but walks with a protective ring of steel around its burgeoning economic belly, and the European Union, whose collective fair trade design is pure hypocrisy when one considers its GATS request in the light of its own inability to reform.

Who is against fair trade? Nobody, of course, but too often that means free trade biased in the developed world's favour. Nobody will own up to it, but there is such a mismatch between rhetoric and reality. Corporations, with their new post-Johannesburg role, are in the game with Government support to take control of resources from which they can turn a handy profit, largely because a fair price will not be paid for those resources. But the issue is not just more access to cheap resources or access to cheap labour.

The everyday reality of fair trade was put succinctly in the Harvard Business Review of September last year, in an article entitled "Serving the World's Poor, Profitably", from which we learned:

"It's . . . incorrect to assume that the poor are too concerned with fulfilling their basic needs to 'waste' money on non-essential goods. In fact, the poor often do buy 'luxury' items. In the Mumbai shantytown of Dharavi, for example, 85 per cent. of households own a television set, 75 per cent. own a pressure cooker and a mixer, 56 per cent. own a gas stove, and 21 per cent. have telephones.

That's because buying a house in Mumbai, for most people at the bottom of the pyramid, is not a realistic option. Neither is getting access to running water. They accept that reality, and rather than saving for a rainy day, they spend their income on things they can get now that improve the quality of their lives." The world's poor do not have much of an opportunity to save for a rainy day because they are still too busy paying off the enormous debts with which they were encumbered when the west had money to throw at them, and which it will now agree to write off only if those recipient countries submit to the conditionalities of western hegemony, as the Washington consensus is known.

The European Union, as the Secretary of State for Trade and Industry so rightly said in her article in The Guardian on Monday, is one of the worst offenders in making soothing noises about fair trade, because when it gives its cows a greater income than half the world's poor, its soothing noises come across a tad unconvincingly. But it is not just the subsidies and the dumping that should tweak our consciences, it is the lavish demands that the EU is making in this general agreement on trade in services round that should make us hold our heads in despair. Not only do we want to run the services of developing countries—do not forget that our motto is "Serving the world's poor profitably"—we also want to make sure that we can do whatever we like with the profits, which naturally means that the bulk of them will flow back to shareholders abroad rather than stay in the places where they were earned.

We do not like the idea that a country such as El Salvador should want to ensure that 50 per cent. of profits remain; we do not like the idea that locals in Cameroon should want to legislate for foreign investment creating local jobs; we do not like the idea that Malaysia should want to have the power to stop, if it so wished, a foreign takeover of a local company. It also seems that we do not like the idea that some countries want to run water services as a locally-owned mutual benefit society—my hon. Friend the Under-Secretary will be interested in this—just as we want to run our hospitals, so they must not, because if they did the fat cats would not be able to buy them. These measures are no doubt designed to make the flow of foreign investment more likely, but I would argue that such strictures will make developing countries subordinate to the whims of foreign investment, at the expense of local growth and self-government, and of course that will make those countries more rather than less vulnerable to the chill winds that the increasingly volatile climate of globalisation delivers.

There are three questions that must be considered before we go further down the free trade road. The first is, if the common agricultural policy was so successful in developing the post-war farming industry of the EU, why cannot a similar policy be good for the agriculture of developing countries? It is all very well arguing that developing countries want equal access to our markets, and they do, but what goes unsaid is that those countries are in no shape to compete equally—their infrastructure, distribution networks and indigenous markets are much weaker than ours, and they should be able to protect their development of these things until they are better able to compete. Investment should support that process, not suck these countries dry, leaving them in a worse state than before.

Secondly, organisations such as the WTO need root and branch reform to allow equal access and influence to all nations in its negotiations. This is still not the case, despite what we have heard about this afternoon. Extra help has given developing countries better representation, but, as Dr Toufiq Ali, the Bangladeshi ambassador to the WTO has said, the greater numbers enjoyed by developing countries in multilateral negotiations has given them some extra strength, but that is negated when these countries are put under pressure in bilateral agreements. We know that the United States, for example, is chasing bilateral agreements more vigorously than ever before.

Thirdly, the social and environmental dimension of free trade should be on the WTO's agenda. At the moment the WTO is prevented from discussing social issues—those fall within the domain of bodies such as the ILO. But who can remember the last ILO ministerial meeting or development round, and who can recall a single decision of the ILO that was enforceable in the same way that WTO decisions are?

China, a new WTO member, is represented on the ILO by a member of the Government sponsored, Government authorized and Government monopolised trade union federation. The repression of trade unionists in China is routine, but the ILO is toothless and the WTO washes its hands. It is time that the ILO's status was raised to that of the WTO, with enforceable rules and penalties.

Free trade dogma increasingly seeks to deny decision-making to democratically elected bodies. Whether it is the US plastic packaging manufacturers' association running to the US Department of Commerce bemoaning the anti-competitive Irish plastic carrier bag tax, or the European Court of Justice telling us that we should not have golden shares in any business, we can see that whatever is perceived as anti-competitive will be attacked, and the hands of Governments will be tied by competition policemen who are answerable only to remote and unelected bodies whose laws no country can overturn. We should pause and think long and hard about how such bodies can be democratised before we allow them to foist more illiberal policies on us.

Photo of Nick Palmer Nick Palmer Labour, Broxtowe 6:35 pm, 25th June 2003

I shall keep my remarks short, as I know that those on the Front Benches would like to get a word in edgeways.

We are all lobbied by a great many people on a great many subjects, and it is a pleasure to be lobbied on an issue from which the lobbyists do not stand to make any personal gains. Some hon. Members, such as Alistair Burt, who made a thoughtful speech, acknowledged that we lack new volunteers for political parties, which perhaps reflects the ebbing away of the idealism that we all seek to encourage and engender. The Trade Justice Movement is therefore a welcome phenomenon with which I believe we should engage. We should do so honestly and listen to what those in the movement are saying, rather than simply say in a general and patronising way, "Yes, it all sounds very nice." We should also tell them frankly when there are issues on which we do not agree.

The Select Committee on the Treasury recently had the privilege of meeting the director of the World Bank, Jim Wolfensohn. With regard to the bank's latest report, whatever its reputation in the past, I believe that it is now seriously addressing issues of world poverty. We have heard many statistics today, and I shall add one more: 1.1 billion people make do on less than 70p a day. We need to consider poverty in the developing world. In the World Bank's reports, we see that the skewed inequalities in many developing countries are much more severe even than in our country, where they are bad enough. In working with developing countries, we need to ensure that our policies help them to develop and help their poorest people.

An especially valuable initiative in that context is the international finance facility, which my hon. Friend Mr. Battle mentioned. The attractiveness of the project is that it effectively doubles the available cash for aid in the short term to enable us to try to reach the world development goals that were agreed by the countries of the world a few years ago, but which, in many cases, are a very long way from being achieved. I commend the Government for pushing that issue forward. In talks with the Treasury in the United States, there was an impression that, although it might not be prepared to take the proposal on board in precisely the same form, it has not rejected it as explicitly as is believed in some quarters.

The Trade Justice Movement is making a number of calls, although I shall not go into detail because of the time limit. Many of them have been mentioned. In particular, the movement is saying that there should be no forced liberalisation. Balance is important. There is an increasing recognition that siege economies and reckless liberalisation at all costs and as fast as possible are not the answer. This Government accept in their dealings with developing countries that they have the right to make informed decisions in consultation with us about the speed that is appropriate for them. I do not think that it is necessarily a bad thing for us to make a bid to offer services in a developing country, as long as it is not accompanied by inappropriate pressure.

I welcome the Trade Justice Movement and its efforts this week, and I welcome the Government's efforts. When we discuss the urgent issues of the day in Britain, such as whether we need a new national football stadium and whether we are in favour of nudity in gardens or approve of the standard of television programmes, we should recognise that they are piffling in comparison with those faced by people who live their entire lives in the shadow of hunger and disease. That is what we have debated today. I am glad that the Opposition chose to make it the topic of the day and that our Government are making such a commitment to addressing the issues.

Photo of Robert Key Robert Key Conservative, Salisbury 6:40 pm, 25th June 2003

Thank God that from time to time we can have a bit of passion—laced with good humour—in our debates. Today was one such occasion. I was first elected 20 years ago this month. When I mentioned international development during the election campaign of 1983, I can record that my constituents reacted with polite bemusement that I should mention such a thing, and no doubt they thought I was slightly dotty. They were probably right. It is interesting to note that during those 20 years the whole atmosphere has completely changed, as the Minister of State said. All sides of the debate have moved on, which is a very good thing.

I welcome the Under-Secretary of State for International Development, Mr. Thomas, to his new position. We can be sure that he will talk good sense. After all, he has a Master of Arts degree in imperial and commonwealth studies under his belt, and I note that his special interests include India and Sri Lanka, as well as Harrow, West. That is not a bad agenda for an International Development Minister.

When I meet trade justice campaigners in my constituency of Salisbury on Saturday, I will be able to report that we have had a robust, well-intentioned and good-spirited debate. The Minister talked about basic infrastructure. We should never forget that we are talking about basic economics—resource allocation of the most basic kind, whether it be water and drainage or transport and the ability to get goods to market—as well as the intellectual property challenges that face us and all the negotiating that we have to do in the world.

I was a little sad that the good humour was broken by Mr. Dhanda, who, when he was generous enough to look in on our debate—I note that he is not here now—accused the Conservatives of scuppering attempts to reform the common agricultural policy. He was quite wrong about that. Conservative MEPs voted against the European Parliament report—the Cunha report—that opposed Fischler's proposals to reform the CAP. The Minister, who was then at the Department for Environment, Food and Rural Affairs, thanked those Conservative MEPs for their support in trying to push forward the proposals for CAP reform. Indeed, when the Cunha report was voted on in the last plenary session of the European Parliament in Strasbourg, Labour and Conservative MEPs voted against it and tabled joint amendments. Let me get the record straight: we are on the same side on this issue. It is astonishing to find that Conservatives are reading The Big Issue and George Monbiot is eating his hat. As the Minister said, all our views have changed. I want to make it clear that Conservative Members support more aid, and we support more trade, too. That is an extremely important point to get across. We have all moved on since the 1970s, 1980s and 1990s, and are now, I hope, firmly faced in the same direction.

I salute the deep knowledge and compassion of Mr. Clarke. I was a pleasure to hear him speak. He talked about free trade and fair trade. When I was a teacher of economics for 16 years, I always taught my pupils that free trade implied a willing buyer and a willing seller. We should underline that in this debate.

My hon. Friend Tony Baldry—who has done a distinguished job as Chairman of the Select Committee—talked about the need for real political commitment, and he is absolutely right. My hon. Friend Alistair Burt also spoke with passion, saying that we have all been here before and that we must see some progress. He said that we have changed the political agenda because of the pressure put on by non-governmental organisations and pressure groups such as the Trade Justice Movement. I welcome that very much.

I wish that all political parties could put as much pressure on the political agenda as a lot of these new and vigorous groups, which perform an important role. However, they should not be surprised when sometimes the Government and the Opposition disagree with them. That is not to say that we disparage them; we are simply saying that perhaps matters are not as simple as the groups think. At least we are engaging with our constituents, all of whom now think it important that we address these issues and that we are not dotty if we do.

My hon. Friend Mr. Rosindell made an important contribution; he put very strongly a passionate point of view, for which I commend him. It is important that we have robust arguments in this House. If ever there were a man with his finger on the pulse of his constituents, it is my hon. Friend. He said that this was an important issue to all our constituents; he is, of course, right.

Sandra Osborne was passionate about decision-making processes, which we should not neglect. The processes are obscure and esoteric in the extreme to the people we are seeking to help. It is no good us bashing ourselves around the head in Cancun—or putting wet towels around our heads in Brussels—if, as we heard from my hon. Friend Mrs. Spelman, every cow in the European Union is subsidised at $2 a day, which is twice as much as the living wage of half the world's population.

I have some questions that the Government need to address. There is not time for the Minister to do so now, but it would be nice if he wrote to me about them. What will the Government do to ensure that other deadlines are not missed as badly as the deadlines for other reforms—for example, the CAP where it is all slipping horribly? Ministers are up against a real problem with the original Doha deadline. We were supposed to finish the round by January 2005; it is now suggested openly that it will not be finished until 2007. We must address that.

What will the Government do about the increasing trade disputes that were put on hold under the peace clause negotiated during the Uruguay round, which expires on 31 December this year? What happens if we do not have something else in place? Several simmering disputes between the EU and the United States could boil up again, such as the foreign sales corporation tax and the fact that Brussels has won the right to impose up to $4 billion of tariffs in retaliation for America's failure to get rid of the tax provision.

We must face these issues, and one more in particular: genetic modification. None of us has the answer to this or can be certain. The only certainty I have is that we must keep our minds open. There is no doubt that there are possible benefits and we must not close off opportunities. The director of the Nuffield Council on Bioethics, Sandy Thomas, said in an important report this week:

"We do not claim that GM crops will eliminate the need for economic, political or social change, or that they will feed the world. However, we do believe that GM technology could make a useful contribution, in appropriate circumstances, to improving agriculture and the livelihood of poor farmers in developing countries."

The Minister of State said that we must ensure that each country has the right to make its own decision on GM. Yes, we must, but if we are not careful we will make that decision for them by excluding their products from our markets, which would be a backward step. We must embrace every opportunity for science and technology to improve the lot of the poorest people on the planet. That is what we should all do, and I hope that we shall be able to move forward in the next year to ensure that we address properly, sufficiently and effectively the needs of the poorest people on the planet.

Photo of Gareth Thomas Gareth Thomas The Parliamentary Under-Secretary of State for International Development, Party Chair, Co-operative Party 6:49 pm, 25th June 2003

It is a pleasure and a privilege to reply to this debate, and I congratulate Mrs. Spelman on her choice of subject. I am grateful to the House for its warm welcome. I particularly liked the description used by Dr. Tonge of the bevy of beauty and talent on the Front Bench. I am sure that I fit the first description, and I hope to convince the House that I fit the second.

As the many excellent speeches on both sides of the House have demonstrated, the challenge that we face on this issue is considerable. Almost one in four of the world's population—two thirds of them women—live in abject poverty. They do not have access to adequate food, clean water, essential health care or basic education services. Such poverty and inequality in a world of great wealth should be a powerful imperative for action by Governments, and in particular, by the leadership of the world's most developed countries. That is why a focus to achieve ever-greater progress towards the millennium development goals has been at the heart of this Government's international agenda.

Many other steps need to be taken. In particular, we need to make further progress towards debt relief, as my right hon. Friend Mr. Clarke and my hon. Friend Mr. Reed pointed out. Removing barriers and creating fairer trade rules is a vital route towards meeting the millennium goals. As my hon. Friend Ann McKechin pointed out, we cannot talk about free or fair trade unless more developed countries take the often hard political decision to dismantle trade-distorting subsidies. Indeed, it is vital that European Union Agriculture Ministers take the bold decisions that many Members on both sides of the House have long sought on common agricultural policy reform in the negotiations that have resumed today.

The evidence of the benefits of fairer trade is clear, and reducing global protectionism will increase global incomes. A number of hon. Members mentioned the US Farm Bill, and I share the sense of regret articulated by Alistair Burt and my hon. Friend Mr. Battle that the US Administration seem likely to increase market subsidies at a time when we are working within the European Union and the WTO significantly to reduce them. It is important, however, that that issue should not be allowed to distract us from achieving the target of concluding the Doha development agreement by the end of 2004. If we are to deliver that ambitious agenda for development, we have to make trade rules work for the poorest. Ministers across Whitehall have been working closely together to tackle the major obstacles, so that we can secure the progress at Cancun that the whole House has today indicated that it wants to see.

I welcome the spotlight that the Trade Justice Movement has brought to the issues of trade and development, to secure a fair deal for the world's poor, but I hope that the movement will now join us in prioritising the real issues that matter most to developing countries. At the top of the list, as Tony Baldry highlighted—and as the trade Ministers of the 49 least-developed countries made clear in their Dakar declaration at the end of May—is the urgent need to give real priority to remedying the negative consequences of agricultural subsidies that affect millions of farmers in those least-developed countries.

The hon. Member for Banbury was a little unfair about our commitment to CAP reform. Indeed, my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs is, as we speak, working extremely hard with our European Union partners to secure a good deal that will allow the flexibility needed for real and serious engagement in the WTO negotiations, and that will genuinely benefit developing countries.

I accept, too, that resolving the TRIPS and public health negotiations is essential to making this a true development round, as was eloquently pointed out by the hon. Member for Richmond Park. We are continuing to try to secure US agreement to the accord that we almost had on 16 December last year, to which all other WTO members could agree.

As Mr. Thomas said, we are working on revisions to the WTO's special and different treatment provisions, in order to secure the progress that developing and—importantly—developed countries want to see. It is certainly true that deadlines have been missed, and the Government remain keen to re-establish the momentum as we approach Cancun.

The hon. Member for Richmond Park touched on the everything-but-arms agreement, which she was right to highlight as an example of successful European Union action in providing a good deal for the world's poorest countries. However, she was wrong to say that sugar, bananas and rice are not excluded from the agreement; transitional periods are in place for those three most sensitive of products. Full duty-free arrangements for them will be phased in between 2006 and 2008.

On the liberalisation of services under the general agreement on trade in services, which Sandra Osborne mentioned, it is worth pointing out that research undertaken by a variety of organisations has highlighted the benefit that services liberalisation can have for developing countries. It is also worth mentioning that GATS is a bottom-up agreement: in other words, the countries themselves decide whether, and indeed when, to open up services, if they consider it beneficial to do so.

The Government do not share the view that the so-called new issues should be left off the Cancun agenda. For example, getting more investment into developing countries must be fundamental to achieving the millennium development goals and genuine poverty reduction. Of course, promoting domestic investment is the priority, but foreign direct investment also has a key role to play. It not only provides additional capital, it helps to transfer new technology and skills and to generate new jobs. It is important to remember that developing countries will not be forced to open up all sectors; nor will they lose their right to regulate under any new investment agreement. Indeed, I can offer some assurance to the Trade Justice Movement campaign: we are interested only in developing an investment agreement that will help developing countries; we will not sign up to anything else.

Business, which was mentioned by several Members, clearly has an important role to play in helping us to meet the millennium development goals. It is of course important in creating jobs, providing investment and fuelling the economic growth that we all want to see. May I suggest gently to Mr. Rosindell that we want responsible business activity? Indeed, Mr. Gummer made that point particularly tellingly in his intervention. We are pursuing a mixture of voluntary and mandatory approaches to promoting a true sense of corporate social responsibility.

The one new idea in the motion moved by the hon. Member for Meriden—a fund to offer short-term legal aid to developing countries—is of course a good one. That is why this Government are already doing exactly that by providing direct support to the Advisory Centre on WTO Law, as my hon. Friend the Minister of State pointed out in an intervention. But as my hon. Friend the Member for Ayr said, what is essential is long-term assistance—which the Conservative motion does not mention—to build the capacity of developing countries, so that they can engage with the WTO on equal terms.

Photo of Caroline Spelman Caroline Spelman Shadow Minister (Women), Shadow Secretary of State for International Development

On a point of clarification, the motion does not call for a short-term advocacy fund.

Photo of Gareth Thomas Gareth Thomas The Parliamentary Under-Secretary of State for International Development, Party Chair, Co-operative Party

With respect to the hon. Lady, I think that she needs to look at the press release on this issue. We are determined to be in there for the long term. We have allocated some £45 million to build developing countries' capacity to engage properly with the WTO. I hope that that gives some reassurance to my hon. Friend the Member for Ayr.

As my hon. Friend the Member for Leeds, West and the hon. Member for Richmond Park pointed out, the Conservatives' motion would be a little more credible if their record on these issues was not so poor. An aid budget that was 0.5 per cent. of gross national product in 1979 had been cut by half by the end of their Administration.

Photo of David Maclean David Maclean Shadow Chief Whip (Commons), Opposition Chief Whip (Commons)

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 177, Noes 295.

Division number 257

See full list of votes (From The Public Whip)

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.

Mr. Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.

Resolved,

That this House congratulates the Trade Justice Movement on bringing the plight of the poorest people in the world to the attention of the public; notes with concern the fact that a billion people live on less than a dollar a day, that life expectancy in many African countries is declining, and that 30 million people in Africa have HIV/AIDS; reaffirms the commitment made in the 2000 White Paper "Eliminating World Poverty: A Challenge for the 21st Century" to improving international trade rules so that they work for all countries, and especially the poorest, in helping to reduce poverty; notes that the successful pursuit of trade reform through the Doha round of multilateral negotiations could contribute substantially to the Millennium Development Goals; welcomes the substantial efforts the Government is making to promote trade liberalisation, reform agricultural subsidies and phase out European trade barriers; believes that significant progress must be made to improve access for developing countries to developed country markets; further believes that a solution to the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) and public health negotiations is urgently needed; and welcomes the commitment to ensuring that the Doha round produces real benefits for the poor.

Photo of Caroline Spelman Caroline Spelman Shadow Minister (Women), Shadow Secretary of State for International Development 7:14 pm, 25th June 2003

On a point of order, Mr. Deputy Speaker. In the winding-up speech that we have just heard, the Under-Secretary of State for International Development, Mr. Thomas, said that the press release on the advocacy fund, issued by my party, mentioned that the fund was short term. I have conferred with my right hon. and learned Friend Mr. Howard, the shadow Chancellor and nowhere in the press release on the advocacy fund do the words "short term" appear. I appeal to you, Mr. Speaker, that that should be put straight. The commitment is long term and sustainable, to provide expert advice through proper funds to help developing nations negotiate with rich nations—[Interruption.]

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. Let me deal with the point of order. It is not a matter for the Chair; it is more a matter for debate—[Interruption.] Order. I am sure that these matters can be looked at in the fulness of time, when the truth will come out.

We now turn to—[Interruption.] Order. I have dealt with that point of order. We are now moving on. DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Legislation">Standing Order No. 118(6)(Standing Committees on Delegated Legislation),